A Guide to Student Loan Forgiveness Programs
Student loan debt is a significant financial burden for millions. Fortunately, several federal programs offer a path to forgiveness, but the rules can be complex and strict. This guide breaks down the main options.
Major Forgiveness Programs
- Public Service Loan Forgiveness (PSLF): This is one of the most well-known programs. If you work full-time for a qualifying employer (government or non-profit) and make 120 qualifying payments, the remaining balance on your Direct Loans may be forgiven, tax-free.
- Income-Driven Repayment (IDR) Forgiveness: Plans like SAVE, PAYE, and IBR adjust your monthly payment based on your income and family size. After 20-25 years of payments, any remaining loan balance is forgiven. Note that the forgiven amount may be considered taxable income.
- Teacher Loan Forgiveness: Eligible teachers who work in low-income schools for five consecutive years can have up to $17,500 of their student loans forgiven.
It is crucial to keep meticulous records and certify your employment annually if you are pursuing PSLF. Always consult the official Federal Student Aid website for the most current information and requirements.
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