Which loans don t qualify for student loan forgiveness?
You're not eligible for federal student loan forgiveness programs if you have private loans, but there are other strategies for managing private loan debt.
Eligible | Ineligible |
---|---|
Direct Subsidized Loans Direct Unsubsidized Loans Direct PLUS Loans Direct Consolidation Loans | Federal Family Education Loan (FFEL) Federal Perkins Loan (Perkins Loan) Student loans from private lenders |
Final answer: Being in an entry-level position for 2-3 years may not make you eligible for loan forgiveness, whereas having a qualifying public service job, being on an income-driven repayment plan, and teaching in a low-income public school may make you eligible for loan forgiveness.
Only loans you received under the Direct Loan Program are eligible for PSLF. Loans you received under the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins Loan) Program, or any other student loan program are not eligible for PSLF.
Incomplete Loan Data Could Result In Some Periods Not Counting Toward Student Debt Forgiveness. Another possible issue for some borrowers could be defective loan data. The Education Department relies on data submitted by loan servicers to a system called the National Student Loan Data System.
You may be eligible for income-driven repayment (IDR) loan forgiveness if you've have been in repayment for 20 or 25 years. An IDR plan bases your monthly payment on your income and family size.
The reality is that, much like that red wine stain on the rug, Sallie Mae student loans aren't likely to evaporate into thin air. That's because Sallie Mae is a private lender now. And despite what you may have heard, there is currently no such thing as private student loan forgiveness.
An eligible payment becomes a qualifying payment when you certify your employment and all or part of your employment period is approved. Eligible payment periods that correspond to approved employment periods are also tracked as qualifying. These payments count toward the 120 required for loan forgiveness.
Under Public Service Loan Forgiveness, borrowers in public service for 10 years who have made 120 months of qualifying payments can get their remaining student debt canceled.
Income-Based Repayment (IBR)—Depending on when you first took out loans (before or on or after July 1, 2014), payments are generally 10% or 15% of the borrower's discretionary income, but never more than the 10-year Standard repayment plan amount. The remaining unpaid balance of loans is forgiven after 20 or 25 years.
Do Ffelp loans qualify for student loan forgiveness?
If you have FFELP Loans, there are several ways to become eligible for loan forgiveness. Most FFEL borrowers are eligible for the Income-Based Repayment (IBR) Plan, where you pay 10 or 15 percent of your discretionary income for 20 or 25 years before the remaining loan balance is forgiven.
If you have student loans from a private institution like Sallie Mae, they're likely not eligible for student loan forgiveness.
The loans were made under the now-defunct Federal Family Education Loan Program. There are two types of Stafford Loans: Subsidized and Unsubsidized Loans. Both types of Stafford Loans qualify for PSLF, but you'll need to consolidate them into a Direct Consolidation Loan before they can be forgiven.
Borrowers with undergraduate debt would qualify for forgiveness if they entered repayment 20 years ago or more, and borrowers with graduate school debt would qualify for forgiveness if they entered repayment 25 years ago or more. Cancel student debt for borrowers previously enrolled in low-financial-value programs.
If you work in certain public service jobs and have made 120 payments on your Direct Loans, you may be eligible to have your loans forgiven. If some or all of your payments were not made on a qualifying repayment plan for PSLF, you may be able to receive loan forgiveness under a temporary opportunity.
If you're not working full-time, you may get denied for student loan forgiveness.
What is an Eligible Loan for PSLF Purposes? Only Federal Direct Loans are eligible for PSLF. These can be Direct Stafford, Direct Graduate Plus, Direct Parent Plus and Direct Consolidation loans.
Stafford loans are a type of federal student loan that are either subsidized, meaning the government pays the interest while you're in school, or unsubsidized, meaning you pay all the interest. Stafford loans are a type of loan issued under the Federal Family Education Loan Program (FFELP).
Nelnet provides customer service for your Federal Direct Loan Program and Federal Family Education Loan (FFEL) Program loans that are owned by the U.S. Department of Education. Looking for your federal student loans from an account number that begins with E? Select the Nelnet Federal Student Loans button.
Key takeaways. Sallie Mae services private student loans for a variety of degrees, including undergrad, MBA, medical school, dental school and law school.
What is the new name for Sallie Mae?
Thus, if you ever had a Sallie Mae loan or had Sallie Mae conduct loan servicing, that loan and servicing, likely, was transferred to Navient. Further, Navient then changed its name in 2021 to Aidvantage.
But those accusations have overshadowed broader claims, detailed in two state lawsuits filed by the attorneys general in Illinois and Washington, that Sallie Mae engaged in predatory lending, extending billions of dollars in private loans to students like Ms. Hardin that never should have been made in the first place.
What loans can be forgiven? Only Direct Loan Program loans that are not in default are eligible for PSLF and TEPSLF. Loans you received under the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins Loan) Program, or any other student loan program are not eligible for PSLF.
Payments made under the Standard Repayment Plan for Direct Consolidation Loans would qualify for PSLF purposes only if the maximum repayment period was set at 10 years, and that would be the case only if the total amount of the consolidation loan and your other education loan debt was less than $7,500.
Any month when your scheduled minimum payment on an income-driven plan is $0 will count toward Public Service Loan Forgiveness (PSLF) as long as are employed full-time by a qualifying employer during that month.
References
- https://studentaid.gov/articles/student-loan-forgiveness/
- https://www.mohela.com/DL/faqs/FAQPage.aspx/pslf
- https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2021-2022/vol6/ch4-perkins-repayment-plans-forbearance-deferment-discharge-and-cancellation
- https://upsolve.org/learn/subsidized-and-unsubsidized-student-loans/
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