Are you eligible for a $ 4.5 billion student loan forgiveness?
Here’s what you need to know – and what it means for your student loans.
The U.S. Department of Education today announced major changes to student loan cancellation that will make it easier for student loan borrowers to obtain student loan relief under the Loan Cancellation Program. public service. (That said, there are 3 major things missing from the student loan cancellation). The Public Service Loan Forgiveness Program helps student loan borrowers who work for a qualified utility or non-profit employer earn federal student loan forgiveness after making 120 monthly payments and other requirements. What are these new changes and what do they mean for your student loans? Here are the details:
Does the student loan exemption only apply to federal student loans?
Yes, the student loan forgiveness only applies to federal student loans for the public service loan forgiveness program. There is no change with the new announcement, and private student loans remain ineligible.
Are FFELP loans eligible for student loan exemption?
Yes, all previous student loan payments for FFELP student loans will now count towards student loan cancellation. Federal Family Education Loans Program (FFELP) student loans were issued before 2010 by private lenders such as banks, but were backed by the federal government. Some of these federal student loans are owned by the Department of Education, but many are owned by private investors and financial institutions. The biggest change with the new student loan cancellation announcement is the tally of past student loan payments for FFELP loans. Previously, any student loan payments made for FFELP student loans were not eligible to count towards the 120 monthly student loan payments. The only solution available required student loan borrowers to consolidate their FFELP loans into a new direct consolidation loan with the US Department of Education. However, student loan borrowers could not count student loan payments for FFELP loans made prior to consolidation. With this new change, student loan borrowers have until October 31, 2022 to ensure that their previous student loan payments for FFELP loans count.
How much student loan discount is available?
With the civil service loan forgiveness, you can get all your federal student loans forgiven if you meet the conditions. Education Department says these policy changes will allow 22,000 student loan borrowers who have consolidated student loans – including previously ineligible student loans – to immediately become eligible for $ 1.74 billion in cancellation student loan without any other measure. Another 27,000 student loan borrowers could benefit from a student loan forgiveness of $ 2.82 billion if they prove additional employment periods. This represents a total of $ 4.5 billion in student loan cancellations. (That said, the total amount of student loan forgiveness is not capped at $ 4.5 billion. There is no total limit on the amount of student loan forgiveness available to all borrowers from. eligible student loan). Overall, the Department of Education estimates that over 550,000 student loan borrowers who have already consolidated student loans will get more student loan payments from the 120 monthly student loan payments. On average, student loan borrowers could get two more years of student loan payments (24 monthly payments) toward a student loan forgiveness.
How do I request a student loan forgiveness?
You can apply for the limited waiver of your student loan waiver until October 31, 2022.
Do you have to consolidate student loans to get student loan forgiveness?
No, you don’t need to consolidate your student loans to get your student loan forgiveness. If you have direct loans such as Stafford loans, for example, these student loans are automatically eligible for the civil service loan exemption. With the new changes, all previous payments made on FFELP loans will now be eligible and count towards student loan cancellation. You must consolidate the FFELP loans into a direct consolidation loan with the US Department of Education by October 31, 2022, and then count the previous student loan payments in your 120 monthly payments. Contact your student loan manager for more details.
Do Perkins loans count towards student loan cancellation?
Under the new changes, any student loan payments made on Perkins loans will also count toward student loan cancellation.
Do all student loan payments have to be made in full each month?
No, not all student loan payments need to be made in full each month. Previously, a qualifying student loan payment required a student loan borrower to make a full student loan payment each month. The Department of Education has now waived this requirement, which provides more flexibility for student loan borrowers.
Do all student loan repayments have to be made on time each month?
No, not all student loan payments have to be made on time every month. Previously, a qualifying student loan payment required a student loan borrower to make an on-time student loan payment each month. The Ministry of Education has also waived this requirement.
Does Covid-19 Student Loan Relief Still Count towards Student Loan Cancellation?
Yes, student loan forgiveness still counts towards student forgiveness. In March 2020, in response to the Covid-19 pandemic, Congress passed historic student loan relief through the Cares Act, which granted temporary forbearance on federal student loans to millions of student loan borrowers. . With President Donald Trump and President Joe Biden’s four total extensions to this legislation, student loan borrowers will get ‘credit’ for non-payments since March 2020, bringing them almost two years to cancellation. of their student loan.
Does Student Loan Forbearance and Student Loan Deferral Count towards Student Loan Cancellation?
Under these new changes, child care workers can now count student loan deferrals and student loan forbearances in the civil service loan forgiveness. Previously, active duty members did not get monthly credit while their student loan payments were suspended.
If I’m rejected for a student loan forgiveness, can I appeal the decision?
If you’re turned down for a student loan forgiveness, you’re not alone. To date, the civil service loan forgiveness program has rejected 98% of student loan borrowers. Going forward, with today’s major changes, approval rates will increase dramatically. If your student loan forgiveness request is rejected, you will be given the opportunity to have your request reviewed for any errors to ensure that eligible student loan borrowers receive a student loan forgiveness.
If you are not working for a public service or non-profit employer, the Public Service Loan Rebate Program is still available for you to apply and meet requirements. While this is a long-term professional commitment, it could be a path to federal student loan cancellation. With student loan relief ending in a few months, make sure you understand all of your student loan repayment options. Here are some popular ways to save money: