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It can be extremely stressful to manage large student loan debt, particularly if you’re having trouble making your payments.
Fortunately, there are programs like Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) that may help reduce the amount of money you have to repay on your federal student loans.
Understanding that a student loan refinance may allow you to lower your monthly payment is crucial when attempting to figure out how to get rid of student loans. Or you may be able to temporarily postpone your federal loan payments through deferment or forbearance.
Student loan debt weighs heavily on millions of Americans often hindering their ability to achieve financial goals like buying a home or starting a family. While there’s no magic wand to make student loans vanish there are ways to get rid of them without directly paying the full amount.
Federal Student Loan Forgiveness Programs:
- Public Service Loan Forgiveness (PSLF): If you work full-time for a qualifying government or non-profit organization and make 120 qualifying payments (10 years) under an income-driven repayment plan, the remaining balance of your Direct Loans may be forgiven.
- Teacher Loan Forgiveness: Teachers who teach for five consecutive years in a low-income school or educational service agency may be eligible for forgiveness of up to $17,500 on their Direct or FFEL loans.
- Income-Driven Repayment (IDR) Forgiveness: After 20 or 25 years of qualifying payments under an IDR plan, the remaining balance of your Direct Loans may be forgiven. The recently introduced “Saving on a Valuable Education” (SAVE) plan offers significant benefits, including lower monthly payments and potential forgiveness after 10 years.
- Total and Permanent Disability (TPD) Discharge: If you become totally and permanently disabled, your federal student loans may be discharged.
- Closed School Discharge: If your school closes while you’re enrolled or within 120 days of withdrawing, your federal student loans may be discharged.
- Borrower Defense to Repayment: If you were misled by your school about its educational quality, job placement, or other factors, you may be eligible for loan forgiveness.
Important Note: These programs have specific eligibility requirements and application processes. Carefully research and understand the details before pursuing any option.
Private Student Loan Forgiveness:
- Bankruptcy Discharge: Discharging private student loans through bankruptcy is a complex and expensive process. It requires filing for Chapter 7 or Chapter 13 bankruptcy and then initiating an adversary proceeding. Bankruptcy should be a last resort and should only be considered after consulting with a qualified attorney.
Additional Forgiveness Scenarios:
- Death Discharge: Federal and private student loans borrowed since November 20, 2018 may be discharged in the event of the borrower’s death.
- Loan Settlement: In rare cases, borrowers may be able to settle their private student loans for less than the full amount owed. However, this option should be approached with caution and with the guidance of a financial professional.
Remember:
- Beware of scams: Any program that promises student loan forgiveness without making payments is likely a scam. Only your loan servicer or lender can forgive your loans.
- Contact your lender: If you’re struggling to make payments, contact your lender or loan servicer to discuss options like income-driven repayment plans or temporary payment pauses.
Getting rid of student loans without paying is possible, but it requires careful planning and understanding of the available options By exploring federal forgiveness programs, researching private loan options, and seeking guidance from financial professionals, you can develop a strategy to manage your student loan debt and achieve your financial goals.
Temporary Relief: Deferment or Forbearance
Federal student loan repayment was put on pause over three years ago due to the Covid-19 shutdown. The Department of Education’s student loan forbearance program expires in 2023, with interest resuming on September 1, 2023, and payments due starting in October 2023, as per the agreement reached in the Debt Ceiling bill.
However, in late June, President Biden announced the creation of the On-Ramp Program . The Department of Education is instituting a 12-month “on-ramp” to repayment of federal student loans, running from October 1, 2023 to September 30, 2024, so that “financially vulnerable borrowers” who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.
If eligible, forbearance and deferment offer borrowers the chance to suspend their federal student loan payments in addition to the On-Ramp Program.
Whether interest accrues during a loan’s deferment or forbearance depends on the type of loan you have. Nonetheless, borrowers can prevent missing payments and possibly going into default on their student loans by submitting an application for one of these options.
Although some may have their own benefits, private student loans do not always come with the same advantages as federal student loans.
Take control of your student loans. Ditch student loan debt for good.
Federal student loan income-driven repayment plans link a borrower’s monthly loan payments to their family size and income.
The repayment period for income-driven repayment plans varies from 20 to 25 years. Although these plans assist borrowers in making loan payments more manageable, extending the loan terms may result in higher interest rates over the course of the loan.
President Biden has announced the creation of the Saving on a Valuable Education (SAVE) Plan , which replaces the existing Revised Pay As You Earn (REPAYE) Plan. Borrowers on the REPAYE Plan will automatically get the benefits of the new SAVE Plan.
The SAVE Plan determines your monthly payment amount based on your income and family size, just like other income-driven repayment (IDR) plans. The White House claims that the SAVE Plan, which is accessible to almost all student borrowers, offers the lowest monthly payments of any IDR plan.
Beginning next summer, borrowers under the SAVE Plan will have their federal undergraduate loan payments halved (from 2010 to 25% of income above 225% of the poverty line).
Early in August 2023, a beta version of the revised IDR application became available, with the ability to sign up for the new SAVE Plan included. According to the DOE, if you submit an application for an IDR plan (like the SAVE Plan) in the summer of 2023, it will be completed in time for the first due date of your federal student loans.
When figuring out how to pay off student loans, keep in mind that if you have a permanent disability, you might be able to have your federal student loans discharged. You must prove to the Department of Education that your disability prevents you from working now or in the future in order to be eligible for the disability discharge.
In order to accomplish this, you must obtain a medical evaluation, present documentation from Veterans Affairs, or demonstrate that you are eligible for Social Security Disability Insurance. Unless a doctor certifies in writing that your disability and incapacity to work will last at least 60 months, you cannot apply for disability discharge until you have been disabled for 60 months.
What Everyone’s Getting Wrong About Student Loans
FAQ
Is there any way to get out of student loans?
How can I get my entire student loan forgiven?
What happens if you just never pay your student loans?
What qualifies for student loan forgiveness?
What can I do if my student loan is defaulted?
You can look into federal programs like Public Service Loan Forgiveness or Income-Driven Repayment plan forgiveness, or if you have private student loans, student loan bankruptcy. Keep in mind that forgiveness isn’t an option for defaulted loans.
Can you get rid of student loans without paying them back?
There is no easy way to get rid of student loans without paying them back. But there are forgiveness and discharge options if you can qualify for them. Staring at mounting education debt from college can be overwhelming. Thankfully, there are a few options to get out of paying it — at least for federal loans.
How can I get Out of student loan debt?
If you’re struggling with student loan debt, there are options available to help you get out of it. You can look into federal programs like Public Service Loan Forgiveness or Income-Driven Repayment plan forgiveness, or if you have private student loans, student loan bankruptcy.
How do I get rid of private student debt?
One of the few ways to get rid of private student debt is through discharge bankruptcy. It’s an arduous — and expensive — process. You’ll have to file Chapter 7 or Chapter 13 bankruptcy, then file an additional lawsuit known as an adversary proceeding. You’ll likely need a bankruptcy attorney throughout the process, which can cost thousands.