“student Loan Forgiveness Programs: Eligibility And Benefits” – Do you want to have your federal student loans forgiven? Have you worked for a government or non-profit organization? If your answer to both is yes, here is some good news for you.
In October 2021, the US Department of Education announced an overhaul of the Public Service Loan Forgiveness program. Now, for a limited time, borrowers can get credit for past payments made on loans that wouldn’t otherwise qualify for PSLF.
“student Loan Forgiveness Programs: Eligibility And Benefits”
Michael Mitchell, a professional musician and social worker, was able to have about $170,000 in student loans wiped out by the federal government, tax-free. This could be you. The overhauled loan forgiveness plan will hopefully restore the PSLF promise and help ease the debt burden for many in the public service sector.
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The Public Service Loan Forgiveness Program, or PSLF, provides student loan relief to those who serve in the public sector. The promise of PSLF is this: If you work in the government or nonprofit sector for a total of 10 years, then your federal student loan debt balance will be forgiven. In addition, the program allows eligible borrowers to lower their monthly payments, depending on their income
However, since Public Service Loan Forgiveness was introduced in 2007, very few people have qualified. This is because the program installed several hoops. For example, not all types of student loans were qualified. In addition, you had to enroll in a special repayment plan to qualify. This latest overhaul will make it easier for more than 500,000 borrowers to qualify for the Public Service Loan Forgiveness program. Tweet it
What are the changes to PSLF requirements? 1. F.F.E.L & Perkins loan payments will now count towards PSLF.
Previously, if you had a Federal Family Education Loan (F.F.E.L) or Perkins Loan or Indirect Loans, and you paid those loans, they would not count toward PSLF. You should have consolidated your loans into a direct consolidation loan first. Once consolidated, only then will your payment be considered Public Service Loan Forgiveness.
How To Get Your Student Loans Forgiven
Under the PSLF overhaul program, if you have a F.F.E.L or Perkins loan and you’ve been making, say, 8 years of payments on those loans, those past 8 years of payments will now count toward PSLF! Two more years until the loan is forgiven! (You just need to move it to a direct consolidation loan and apply for PSLF.)
Previously, once you consolidated into a direct loan, there were multiple hoops for you to jump through. You had to enroll in an income-based plan (such as Pay As You Earn or REPAY) for your student loan payments to count toward PSLF. Under the new waiver, past payments under any plan will count! So if you were making payments on your Direct Loan but were in the wrong repayment plan, those payments will now count towards PSLF!
Below, we answer some frequently asked questions about Public Service Loan Forgiveness Overhaul. How do I apply for a PSLF waiver?
To apply for this waiver, you will need to submit a PSLF certification form by October 31, 2022.
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First, check if your employer is eligible by going to the PSLF Help Tool. Second, file a consolidation application. This is an application to convert your old loan into a new one of the right type. Previously, payments towards F.F.E.L loans were not considered PSLF. With the new cancellation you can. This must be done before October 31, 2022.
No. These temporary changes only apply to people who have borrowed for their own education. It does not apply if you borrowed money for a child or grandchild.
You should receive a refund automatically as long as you have not already received full forgiveness. If you have already received full forgiveness, then it will not be given back to you.
A close friend of mine just shared with me that he just realized that he never followed the proper steps towards getting his public service loan forgiven. Had a loan from F.F.E.L. He didn’t know he needed to switch to a direct consolidation loan to qualify for PSLF. Had he flipped it, tens of thousands in student loans would have been forgiven by now.
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At District Capital Management, we work with our clients to implement three strategies on how to maximize the value of their Public Service Loan Forgiveness. If you’re looking for an unbiased expert to help you maximize your PSLF or help you navigate the new PSLF overhaul rules, schedule a free discovery call with one of our financial planners today.
Alvin Carlos, CFP®, CFA is a fee-only investment advisor and financial planner in Washington, D.C. who works with clients across the country. He received his master’s degree in international relations from SAIS-Johns Hopkins. Alvin is a partner at District Capital, a financial planning firm designed to help professionals in their 30s and 40s achieve their financial goals through smart investing, tax reduction, retirement planning and maximizing their money. Schedule a free discovery call to find out how we can help you grow your finances.
District Capital is an independent fee-only financial planning firm. We help professionals and entrepreneurs in their 30s and 40s raise their finances and maximize their money. We are based in Washington DC and work with people almost nationwide. There are many programs designed specifically for healthcare professionals to receive student loan forgiveness. Most serve certain types of healthcare professionals and have other requirements around the length of time you work in healthcare and where you work. Consider each of these factors as you consider your options. If you’re struggling to pay your loans, you can also consider applying for a loan deferment or forbearance or switching to an income-based repayment plan to help make your monthly payments more manageable.
Healthcare professionals are essential, but getting a degree for a healthcare job is expensive. That’s why there are many programs that offer loan forgiveness to healthcare professionals.
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If you are employed by a U.S. federal, state, local, or tribal government or nonprofit organization, you are likely eligible for the Public Service Loan Forgiveness Program.
Healthcare workers in public healthcare facilities (public hospitals or non-profit hospitals) may be able to take advantage of Public Service Loan Forgiveness. You can check with your loan servicer to see if your loans are eligible for this program. You can also use this PSLF Help Tool, which guides you through the process of getting Public Service Loan Forgiveness.
If you do not qualify for the Public Service Loan Forgiveness program, you may be eligible for Temporary Extended Public Service Loan Forgiveness. For example, if you defaulted on your loans through a PSLF payment plan, you may qualify for TEPSLF.
Only direct loans are eligible for the TEPSLF program. Loans from the Federal Family Education Loan Program and the Federal Perkins Loan Program are not eligible for Temporary Extended Public Service Loan Forgiveness.
Michigan Student Loan Forgiveness Programs
Eligible primary care providers can get help with student loan payments through the National Health Service Corps LRP. To receive this specific student loan repayment, you must provide at least two years of service at an NHSC-approved location in a health care worker shortage area.
The National Health Service Substance Use Disorder LRP workforce is aimed at licensed health care providers working in behavioral/mental health or primary care. Just like the general NHSC student loan repayment program, you must provide service at an NHSC-approved location in a health care worker shortage area.
The NHSC Rural Community LRP is like the SUD Workforce program, but specifically serves providers working in NHSC-approved locations in rural areas. While working at your approved location, NHSC will help you with your student loan payments.
The HRSA Nurse Corps LRP is designed to help pay off student loan debt for professional registered nurses working full-time in critical shortage facilities (CFS) or an eligible nursing school.
The Limited Time Public Service Loan Forgiveness Program Waiver
The Indian Health Services Loan Repayment Program is for health care professionals who commit to serve two years in health care facilities that specifically serve American Indian and Alaska Native communities.
This program has a wide range of eligibility. Not only are doctors, registered nurses and dentists eligible, but so are other health professions such as optometrists, pharmacists, registered dietitians and many others.
The NIH Loan Repayment Program is for healthcare professionals in biomedical and biobehavioral research careers. NIH provides loan repayment assistance as long as you are committed to NIH-relevant research.
There are two different programs within the National Institutes of Health student loan repayment program: the non-marital program and the intramural program.
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The intramural program is for those employed directly by NIH, while the extramural program is for those who are not employed by NIH but fall into one of six approved research categories.
It was pretty easy to submit and they have a lot of information to guide you through the process.
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