Understanding the Eligibility Requirements for Federal Loan Forgiveness
Did you know that the typical federal student loan debt is around $37,720? Perhaps you have a student loan debt and dream of a future where it magically disappears. Well, dream no more!
The solution you’ve been looking for might be federal loan forgiveness. But before your hopes skyrocket, it’s crucial to understand the eligibility requirements that come along with this financial lifeline.
To assist you on the road to student loan freedom, we’ll break down all the finer points in this post. Take a seat, and let’s explore the interesting world of federal loan forgiveness!
Must Have an Eligible Type of Loan
To qualify for federal loan forgiveness, you must have an eligible type of loan. Federal Family Education Loan (FFEL) Program Loans and Direct Loans are the two loan categories that are eligible for forgiveness.
If you have a Direct Loan, you’re in luck. All Direct Loans are eligible for the Public Service Loan Forgiveness Program. If you work in public service and make 120 qualifying payments on your Direct Loans, the remaining balance on your loan will be forgiven.
Federal student loans made before July 1, 2010, are eligible for forgiveness under the FFEL program. Do your research if you want to understand which federal loan statements you have.
Must Be a U.S. Citizen or Permanent Resident
You must be a permanent U.S. resident or a U.S. citizen to be eligible for federal loan forgiveness. If you are not, you may still be eligible for loan forgiveness if you have a DHS Employment Authorization Document (EAD). You may also be eligible if you have been granted withholding of removal, are a refugee, an asylee, or are a DACA (Deferred Action for Childhood Arrivals) beneficiary
Must Make Qualifying Payments
As a PSLF applicant, you must make qualifying payments to be eligible for federal loan forgiveness. Qualifying payments are defined as on-time, full, scheduled payments made while you are employed full-time by a qualifying employer.
You must make 120 qualifying payments to have the remainder of your loan forgiven. Payments made during periods of deferment or forbearance do not count toward the 120 required payments. If you have multiple loans, you must make separate 120 qualifying payments on each loan to have that particular loan forgiven.
Must Work for a Qualifying Employer
To qualify for federal loan forgiveness, you must work full-time for a qualifying employer. Qualifying employers may include:
- nonprofit organizations
- government organizations
- other public service organizations
You can be eligible if you work for a private company that offers public services such as healthcare or education.
Avail of Federal Loan Forgiveness Today
Understanding the eligibility requirements for federal loan forgiveness is essential to qualifying and receiving the maximum benefit. You must be a citizen of the United States to qualify, make 120 qualifying payments, must have an eligible type of loan, and must work for a qualifying employer.
Even if applying for loan forgiveness can be challenging, it might be worthwhile to lessen your debt load. Fill out the PSLF form and apply today!
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