How Can I Apply For Student Loan Forgiveness

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How Can I Apply For Student Loan Forgiveness

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Note that the situation with student loans has changed due to the impact of the coronavirus outbreak and relief efforts by the government, student loan lenders and others. This includes stopping repayment of federally held student loans through the end of 2022, with deferred payments continuing to count toward public service loan forgiveness.

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As you work towards Public Service Loan Forgiveness (PSLF), it helps to submit a Certification of Employment form every year (or at least whenever you change employers) to verify your employment. After 10 years and 120 eligible student loan payments, you will be ready to submit the PSLF Student Loan Forgiveness form.

Take a look at the three topics below to see how you can complete the Public Service Loan Forgiveness form to get your debts forgiven and tips to help you qualify.

The Public Service Loan Forgiveness (PSLF) program was launched in 2007. Its promise: if you pay off your loan every month while you work for a government or non-profit agency, the balance will be forgiven after 10 years.

Unfortunately, the execution was not smooth. In 2017, the Consumer Financial Protection Bureau (CFPB) reported that many loan service providers misadministered PSLF to their borrowers. Others have criticized the cost of the PSLF, and the Trump administration has repeatedly proposed ending the program in its annual budget proposals.

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Regardless of future program changes, individuals already following PSLF are expected to remain eligible and borrowers eligible to apply for PSLF in September 2017.

If you are one of the borrowers who have worked for 10 years in public service, then it is time to apply for PSLF.

The first step is to complete this student loan forgiveness form. You will need to fill out a Public Service Loan Forgiveness application for each employer you have while making your 120 eligible payments.

Unless you indicate otherwise, the Department of Education will place your loan in forbearance while it processes your application. During this period, you will not have to make any payments, however, your loan will accrue interest, which you will have to pay if your application is denied.

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After completing the PSLF form, you can send it by mail or upload it directly to the FedLoan website if FedLoan is your server. Addresses and instructions are on page 4 of the application, where you will also find numbers to call for further assistance.

Once the Education Department receives all your documents, they will notify you. According to its PSLF FAQ page, processing times can vary based on factors such as:

If your application is approved, the Department of Education will forgive all interest and outstanding principal on your eligible Direct Loans. If you have made more than 120 eligible payments, the excess amount will be refunded. Unlike other forgiveness programs, you don't have to pay taxes on the amount forgiven.

However, if your application is rejected, the Department of Education will inform you of the reason. At that point, you'll have to start paying your debts again, and you'll be responsible for any interest you earn during your forbearance. Plus, as the Department of Education warns, interest can "compound," meaning interest can add to your principal, forcing you to make more payments than you started with.

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If you believe the Department of Education erred in its denial, you can submit additional information to support your case and FedLoan Servicing will reevaluate its decision.

Putting your debts into forbearance is a costly mistake if your Public Service Loan Forgiveness application is denied. During the process, you will lose many months of eligible loan payments.

So, before completing the PSLF form, check each of the following requirements to see if you are eligible:

Although there are many types of federal student loans, only direct loans are eligible for PSLF. To check what types of loans you have, log into your federal student aid account.

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If you have multiple types of federal loans, you can consolidate them into a direct consolidation loan so they qualify, but your previous loan payments won't count. In other words, your 120 payments clock starts. So, think carefully before strengthening.

Beginning in October 2021, the government will allow those who applied (or applied) for the program before October 31, 2022 to count all federal loan repayments toward PSLF, regardless of payment plan.

It is retroactive to include previously ineligible payments. However, there are some fine prints, so you'll need to check with your server to make sure. Here are all the main details of these new, more lenient standards.

Below is the original text of this post, which describes the previous standards in effect before October 2021:

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When you graduate, you are automatically offered a standard 10-year repayment plan. But that doesn't work for PSLF; At the end of 10 years, there will be nothing left to forgive.

Instead, you should enroll in an income-based repayment (IDR) plan that adjusts your payments to a percentage of your income. If your payments drop to $0, that's great, but you must have one of these plans.

Are you enrolled in the IDR scheme? If yes, continue. If not, learn more about income-based repayment plans.

It is your work that qualifies you for PSLF. You must work for a government or nonprofit agency that meets your employer's definition of "full-time" or at least 30 hours per week.

Student Loan Forgiveness Website Taking Applications

To keep track of your employer, you must submit an employment certification whenever you change jobs. As proof of your employment, the Department of Education suggests keeping your W2s and pay stubs.

It is important to note that you must be working for an eligible employer at the time of application and at the time of the waiver, according to the Department of Education. So, don't join the private sector until your loans are waived off.

Did you work full-time for an eligible employer during your 120 payments and still work for one? If yes, continue. If not, learn more about qualifying public service careers.

Finally, you should have made 120 eligible monthly payments. These payments must be made in full within 15 days of the due date, after October 1, 2007, and while you are in the IDR plan and working for an eligible employer.

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However, the payments do not have to be consecutive. For example, if you were employed in the private sector between two nonprofit jobs, you can count the payments you made on both ends.

If you are not sure how many eligible payments you have made, you can log on to the Fedloan servicing site to check. If your loans still haven't been cleared, you can submit an employment certification form, after which the Department of Education will send you a letter disclosing how many payments you have left.

Have you made 120 eligible payments? And did you answer "yes" to all the above questions? Then you are ready to apply for PSLF!

Take your time while filling the PSLF form, keep copies of everything and make sure you stay in your skilled work until your loans are forgiven.

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