President Biden’s recent announcement proposes to forgive up to $20,000 for borrowers earning less than $125,000 a year.
For people who don’t qualify for Biden’s loan forgiveness program or may still have student loan balances left even after forgiveness, there are still options available to reduce student loan obligations. Please note that each of these programs have been available for some time and have stringent limitations. You should contact your servicer or https://studentaid.gov for more information.
Working for the Federal Government
People who work for the federal government could have a government agency repay their student loans. According to the United States Office of Personnel Management, a government agency may pay a maximum of $10,000 of an employee’s loan in a year or a total of $60,000 per employee during their time at the said agency. An employee who agrees to the terms must remain employed at the agency for at least three years.
Public Service Loan Forgiveness
The Public Service Loan Forgiveness program (PSLF) promises to eliminate a person’s entire student loan debt if they work for the federal, state or local governments, nonprofits and other qualifying public service jobs. The program forgives a borrower’s remaining loan balance after making 120 on-time monthly payments for 10 years. Individuals must have received the loan under a federal direct loan program, as other programs don’t qualify for PSLF.
People who thought they were making qualifying payments while receiving their loan from another federal program have until Oct. 31 to receive credits for payments that didn’t qualify under PSLF.
Income-driven repayment plans
Individuals who are paying back their federal loans through any of the four income-driven repayment plans are eligible to have the rest of their loans forgiven after 20 or 25 years of qualifying payments, depending on if the loans were given for undergraduate or graduate level studies.
Teacher Loan Forgiveness Program
Through the Teacher Loan Forgiveness Program, full-time educators who teach for five consecutive years in a low-income school or at an education service agency could have up to $17,500 of their federal loans canceled. Teachers may also qualify for the entirety of their debt to be eliminated through the Public Service Loan Forgiveness program.
Active military service members are eligible for loan forgiveness for up to $65,000 if they commit to at least three years of service. Service members also qualify for PSLF.