There is an undeniable fact that student loan forgiveness programs are one of the actual topics nowadays. Almost every student undergo student loan to pursue an undergraduate degree and end up graduating with a vast amount of debt. The practical and easy solution for most of the graduate students to cancel their loans is through student loan forgiveness programs. However, students sometimes do not take into consideration that forgiveness programs are not automatic and because student works for a governmental or non-profit organization and completes 30 hours working hours does not mean that student will automatically be selected for the education loan forgiveness program.
Additionally, despite a vast number of applications only a few borrowers manage to qualify for education loan forgiveness programs. The result demonstrates that borrowers make some mistakes while applying or enrolling the repayment plan for the forgiveness program. Therefore, the following article is for describing common mistakes that most of the student make and ways to avoid from them:
1. Not Submitting Certification Form Regularly
One of the most crucial factors ensures that the borrower is on the right track is submitting Employment Certification Form regularly. However, there is always misunderstanding among borrowers about the submission time of the form. You should Complete the form:
- When you first start working for the public or non-profit organization
- When you change your working company
- Annually
One of the common mistakes that students make is not to submit the certification form annually, yet it is one of the essential requirements for the employer to make sure that you are on the right track.
2. Having Errors in the Employment Certification Form
This mistake is another one that is commonly made by borrowers yet has no vital importance as the first requirement. However, if you have errors in the Employment Certification Form you form will not be accepted and will be sent you back. Here are the most commonly made mistakes in the Employment Certification Form:
- Missing information in the form: If there is some missing information like employment identification number or employer’s address most probably your form will be rejected. Therefore, before submitting form make sure you have all the necessary information filled.
- Inconsistent data in the certification form: If the information in the submitted form does not match with the previously submitted form that could be sufficient reason for rejection of certification form.
- Errors while correcting the mistakes: You should consider that if you are fixing the errors, you should also include initials next to the corrected information.
3. Submitting Certification Form without having an Employer’s Signature
Having employer’s or any authorized individual’s signature is an essential part to show the reliability of the form. Therefore, make sure you have the confirmation of your employer on the form before submitting the certification form.
4. Not Enrolling in one of the Student Loan Repayment Plan
One of the essential factor to qualify for the student loan forgiveness is having an income-driven repayment plan. If you follow the selected repayment plan and stick to that plan, after completing 120 monthly payments your loan will be canceled within ten years.
However, challenging task here for most of the students is to choose the best repayment plan wisely. To select the most suitable option for your financial status, please refer to Student Loan Repayment Options.
5. Not Managing to Recertify Income-Driven Repayment Plan
If the borrower fails to recertify the repayment plan, it means he is no longer eligible for the forgiveness program. As indicated in its name repayment plan is based on the borrower’s income, and it can change over time. Therefore recertification is required to track your income statement.
Another common mistake is missing student loan payment deadline. To cancel the student debt, you should pay 120 payments under your repayment plan. Additionally, to keep you eligible for the program, your payment should not be late more than 15 days of repayment day.
6. Not Consolidating your Loan in Necessary Conditions
Most of the borrowers do not know about the status of their education loan forgiveness program. Students who take Federal Family Loan, Perkins Loan, or another type of several loans need to consolidate them under one Direct Consolidation Student Loan.
To check whether your student loan is direct or not you should visit the Federal Student Aid site, search for your student loan and see whether it is a direct student loan or not.
7. The Employer is Important than your position in the Company to qualify the student loan forgiveness program
Most of the borrowers suppose that if they work non - profit in the private company they will be qualified for the public service student loan forgiveness program. However, for the forgiveness program, 2018 gives priority to the employer’s status. On the other hand, regardless of your position in one of the governmental or non-profit organization, you could be eligible for the public education loan forgiveness program.
8. Not Having Enough Information about Monthly Payments
There is a misconception among borrowers that if they pay more than they need to be during month their loan will be canceled earlier than ten years. However, according to public service student loan forgiveness program, the borrower should make 120 payments monthly, and only one payment can be recorded during one month despite how much you pay.
9. Avoid From Promises of Fraudulent Companies
Some fraudulent companies take advantage of the actuality of student loan forgiveness programs and try to fool people with false promises such as eliminating student loan for a short period or helping them to enroll for the education loan forgiveness program. Some of them charge borrowers a lot to help them register for the nonexistent education loan forgiveness program. Beware of that kind of companies and do a lot of research before applying for one of the student loan programs.
10. Borrowing Private Loan instead of Federal Student Loan
Some students prefer private student loan over federal student loan which is not recommended as federal student loans are more available, cheaper than a private student loan, and have better repayment conditions. Federal forgiveness programs have income-driven repayment plans and loan forgiveness yer private student loans do not have those options. Additionally, federal education loan forgiveness programs offer up to three years deferments and forbearances, yet private student loan programs do not.
According to the U.S Department of Education, only 1 percent of the submitted applications were qualified for the education loan forgiveness 2018 program. The most common reasons for application rejection are having incomplete information or not fulfilling the program requirements. Therefore, by avoiding the mentioned mistakes, you will increase your acceptance chance for forgiveness programs.
Now you have a better understanding of forgiveness programs and their requirements. To sum up, for avoiding from mentioned mistakes you should submit the required documents earlier and should not pay repayment later than the specified time. Take a lot of time to research and learn about student loan forgiveness programs and their requirements to avoid possible mistakes. If you think that you need help, do not hesitate to ask for consulting from others.
