Currently, 45 million people are in student loan debt, totaling about $ 1.7 trillion.. Many borrowers may feel like they are drowning; some cannot imagine a future where all their debts will be paid off.
Fortunately, there are workable ways to get student loans canceled so you don’t have life threatening debt. Read on to find out if you meet the criteria to have your student loans canceled.
When standard payment plans are put in place for federal student loans, most of them are calculated over a 10-year period. However, if the monthly amount to pay off the 10-year student loan is too large, you can apply for an income-based repayment plan. These plans structure the repayment over 20-25 years, and your maximum monthly income would be 15%. If you have made all of your payments, the remainder of the loan is canceled after the predetermined pay period.
Suppose your plan is set for 10% of your monthly take home pay for 20 years starting in 2021. If you made every payment in 2041, no matter how much is left on your loan, you won’t have to pay it. You have to declare how much you earn at the start of each year, so if you start making more money your monthly payments will increase, but it will not affect other loan terms.
Public service loan remission
Depending on your industry, you may be able to have your direct loans canceled. If you are employed by the government, work for a nonprofit organization, or serve in the military and are already enrolled in an income-based repayment plan, you can apply for a public service loan remission. This requires that you have already made 120 qualifying payments and are working full time for your employer.
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Teacher loan waiver
Teaching is another profession that can potentially save you money on your loans. To qualify, you must have a bachelor’s degree and full state certification and teach full-time for five full, consecutive academic years at a low-income elementary school, high school, or educational services agency. If you meet all of the conditions, you can get up to $ 17,500 of your canceled Direct Loan or Federal Family Education Loan.. If you don’t meet all of these conditions, you may still be eligible for a $ 5,000 rebate, so it’s worth looking into.
School exit closed
If the school you attended closed while you were enrolled, on approved leave, or within 120 to 180 days of your withdrawal (depending on the year you got a loan), you will receive a request for cancellation of the loan. , according to the Federal Student Aid website. Some loans may also be subject to an automatic discharge depending on when the funds were disbursed and whether a student attended another institution offering federal loans within three years of the school closing.
If you have a Perkins loan, you may be eligible for a 100% discount, depending on your job. If you have worked full-time in a public or non-profit elementary or secondary school system as a teacher who primarily serves students from low-income families, a special education teacher, or a teacher in a field that is determined to run out of qualified teachers, you can apply for loan forgiveness.
Total and Permanent Disability Exit
Some loans are canceled if it turns out that you are definitely and totally disabled. Documents from the US Department of Veterans Affairs, Social Security Administration, or a physician are required to request release.
For more information on eligibility information and how to request a loan forgiveness, visit studentaid.gov.
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This article originally appeared on GOBankingRates.com: Do you have student loans? It is possible to make them forgive