“student Loans And Housing Choices: Renting, Homeownership, And Mobility”

“student Loans And Housing Choices: Renting, Homeownership, And Mobility” – How can people get rid of their student loan debt and when is loan forgiveness an option? Statistics show just how deep in student loan debt US college graduates are and the amounts can be daunting for individual borrowers. Fortunately, students may be able to take advantage of income-based repayment plans and public service employee forgiveness to ease their debt burdens.

Only direct loans made by the federal government and Stafford loans, which replaced direct loans in 2010, are eligible for a forgiveness program.

“student Loans And Housing Choices: Renting, Homeownership, And Mobility”

If you have other types of federal loans, you may be able to consolidate them into one direct consolidation loan, which may give you access to additional income-driven repayment plan options. Non-federal loans from private lenders and loan companies do not qualify for forgiveness.

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In 2020, borrowers with federal student loans who attended for-profit colleges and sought loan forgiveness were dealt with for committing fraud or breaking specific laws when then-President Donald Trump vetoed bipartisan resolution, which would repeal new regulations that would loan forgiveness is much more difficult to access. The new, more serious regulations came into force on 1 July 2020.

In August 2022, the Biden administration, along with the US Department of Education, approved $32 billion in student loan debt relief for more than 1.6 million borrowers with applications open in October. However, in November 2022, federal courts issued orders blocking the student loan forgiveness plan. On June 30, 2023, the Supreme Court ruled that the Biden administration did not have the authority to cancel up to $20,000 of federal student debt per borrower.

For federal student loans, the standard repayment period is 10 years. If a 10-year repayment period makes monthly payments unaffordable, you can enter an income-based repayment (IDR) program.

Income-driven programs extend payments over a term of 20 or 25 years. After that term, assuming you’ve made all your qualifying payments, whatever balance remains on the loan is forgiven. Historically, payments have been based on your family income and family size, and will usually be capped at 10%, 15%, or 20% of your discretionary income, depending on the plan. As part of the SAVE plan, undergraduate loan payments will be capped at 5% of discretionary income.

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Below are the four types of RAI plans offered by the US Department of Education, along with the repayment periods and monthly payments for each:

A RAI plan can be a good option for people in low-wage occupations with large amounts of student loan debt. Eligibility varies among plans, and certain types of federal loans are ineligible for repayment under more than one plan. In addition, you will need to re-certify your income and family size annually, even if neither has changed from year to year.

To apply for RAI you must submit an Income-Based Repayment Plan Application, which can be completed online or via a paper form, the latter of which you must request from your loan servicer. You can choose a specific RAI plan by name or ask your loan servicer to put you on the income-driven plan you qualify for with the lowest monthly payment amount.

If any of the loans you wish to include in the RAI plan have different loan servicers, you will need to submit a separate application to each of them.

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To determine your eligibility for specific plans and calculate your monthly payment, you’ll need to provide your adjusted gross income (AGI) or other income documentation. If you’ve filed a federal income tax return in the past two years, and your current income is about the same as what was reported on your most recent return, you’ll use your AGI. If you are unable to meet either of these criteria, other income documentation will be required.

Student loan forgiveness for teachers can allow forgiveness of up to $17,500 in federal direct student loans and Stafford (but not Parent Undergraduate Student Loans (PLUS) or Perkins loans). Teachers must have taught for five full and consecutive academic years and taught in a qualifying low-income school or educational service agency.

Even if you were unable to complete a full academic year of teaching, it may still count towards the required five academic years:

Qualified teachers have at least a bachelor’s degree, and full state certification, and certification or licensure requirements have not been waived on an emergency, temporary or temporary basis, and additional qualifications vary based on whether they are new to the profession or not.

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Only full-time science and math teachers at the second level, as well as special education teachers at the elementary or second level, are eligible for $17,500 in forgiveness. The forgiveness is capped at $5,000 for other full-time elementary or secondary school teachers.

If you had an outstanding balance on a direct loan or FFEL on October 1, 1998, or have had one since then, you will be ineligible for the program. In addition, only loans made before the end of five academic years of qualifying teaching service will be eligible for Teacher Loan Forgiveness.

You can qualify for both Teacher Loan Forgiveness and Public Service Loan Forgiveness (PSLF), but you cannot use the same years of teaching service to meet the eligibility requirements for both programs. So you would need 15 years of teaching service to qualify for both programs, as well as meeting all the specific requirements to earn each type of pardon.

Once you have completed your full five consecutive years of qualifying teaching, simply submit a completed Teacher Loan Forgiveness Application to your loan servicer to apply for the Teacher Loan Forgiveness Program.

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If any of the loans you wish to have forgiven under the Teacher Loan Forgiveness Program have different loan servicers, you will need to submit a separate form to each.

The chief administrative officer of the school or educational service agency where you undertook your qualifying teaching service must complete the certification section of the application, which means you will need to send the form to them before you can submit it.

If you have a full-time job with a U.S. federal, state, local, or tribal government or a nonprofit organization, you may qualify for student loan forgiveness. You will need to make 120 payments, which do not have to be consecutive, under a qualifying repayment plan to be eligible.

This option is not for recent graduates, as it takes at least 10 years to earn it. Additionally, you will need to have a federal direct loan or consolidate your federal loans into a direct loan.

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Unfortunately, this program is fraught with controversy. The US government created the PSLF program in 2007, and when the first borrowers became eligible for forgiveness in 2017, nearly all of their applications were denied, often on technicalities. In some cases, borrowers discovered that their loan servicers had misled them about their eligibility for the program.

Temporary Extended Public Service Forgiveness (TEPSLF) may help you if your application for Public Service Loan Financing (PSLF) was previously denied.

On October 6, 2021, the Department of Education announced temporary changes to the PSLF program that allowed borrowers to receive credit for past payments regardless of a payment plan or loan program and regardless of whether payments were made in time or in full.

Many of the previous requirements for the PSLF were waived as part of the change, with two main requirements remaining:

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The waiver also allowed active duty service members to count deferrals and concessions toward PSLF. The last major change with this update is that the US government has reviewed PSLF application denials for any errors and allowed borrowers to reconsider their PSLF decision.

Applying for PSLF involves a four-step process, each of which requires the use of the online PSLF Help Tool:

For the final step, send the completed form, along with your employer’s certification, to MOHELA, the US Department of Education’s federal loan servicer for the PSLF Program. If MOHELA is already your loan servicer, you can upload your PSLF form directly to their website. Additionally, you can fax or email the form based on the address provided on the US Department of Education website.

Closed School Discharge is a federal student loan forgiveness program for borrowers who close their schools while enrolled or within 120 days of withdrawal. It applies to different types of federal student loans.

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To be eligible, borrowers must meet certain criteria including closing the school while enrolled or within 120 days of withdrawal, not having completed their program of study at the closed school, not having the credits earned at the closed school transferring to another institution, and not having completed a similar program in another school through teach-out agreements or other means.

Automatic release may occur if the Department of Education is notified that a school is closed. If borrowers are eligible but have not received automatic discharge, they can apply for loan forgiveness by contacting their loan servicer for application forms and necessary instructions. In most cases, they will receive the application for discharge through the Department of Education.

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