How to Get Government Forgiveness on Your Student Loans

Government forgiveness on student loans is not an option for the vast majority of people. When people hear "forgiveness program," they think the federal government will erase their debt because the economy is bad or because they have a hardship. This is simply not the case, though forgiveness programs are available to a small percentage of federal borrowers.

Public Service Option

The main program that provides for forgiveness of loans is available to those people who choose to serve the public in a low income career. The word career is important, because you will have to serve for a very long time, upwards of 10 years, to have your loans forgiven. During that period of time, you must be making your loan payments. However, if you do serve in a public service job and make payments for 120 months on your loans, then you will be eligible to have your entire debt forgiven. This includes both the interest and the principal. While 120 months may seem like a long time, you should consider if you made payments while still attending school. If your loan was not subsidized, then you likely made 48 months of payments while attending school, reducing the service time required afterward.

Debt Consolidation

There are other options to relieve your debt burden without total forgiveness. If you have more than one federal student loan, you can seek a consolidation program through the federal government. This does not just apply to students. Parents who have taken out loans for more than one child are eligible to consolidate. In fact, the government generally encourages consolidation and refinancing of their loans so long as it is done according to the federal program. You should know these options are absolutely not available once your loan has gone into default. If you fear you may not be able to continue your loan payments, seek the consolidation option immediately to relieve the burden and keep your loan in good standing.

Loan Deferment, Forbearance and Other Options

If you cannot consolidate, likely because you have only one debt, you will still have other options to manage your loan payments. Ultimately, the government wants to help you avoid a default. You will typically have to prove you are unable to meet your loan obligations due to factors outside of your control. This means you will have to show an effort to pay the loan prior to the circumstance you are now facing, like a job loss or illness. You will also need to show you cannot make the loan payments as a direct result of that condition and the condition is not going away in the near future. If you can do this, the government will typically grant you a grace period on your debt, either through deferment or forbearance. Deferment is a pause in all of your debt obligations when interest does not accrue. A forbearance is a pause in collections, but your payments will still come due, and interest will still be charged on your loan.

 


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