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Understanding Student Loan Relief Programs: Options, Regulations, and More

student loan relief

Your outstanding student loan sum may be forgiven, which means it may be canceled under certain programs. Some of the most prevalent forms of student loan relief programs are in this post, but first, familiarize yourself with the basics of student loan debt.

Debt is a debt no matter what

When it comes to debt, you should always be aware of what you’re getting yourself into. To begin with, a student loan is exactly that: a loan. This implies that you will owe money to someone. It might be a bank in certain situations or the US government in others. You must repay it in either case. Second, it accrues interest, just like any other loan.

This means that you must not only repay what you borrow, but you must also repay more than you borrowed, with the amount increasing as time goes on. Consider it a type of reverse savings account, where instead of earning money, you’re accumulating debt.

Understand the Collateral

So, against what are you taking out a loan? The majority of your debt is secured against something – you get a vehicle loan and borrow against your car; you get a mortgage and borrow against your property. If you don’t pay back these debts, your car or home will be repossessed. You are borrowing against your own future when you take out a student loan. You should have no trouble repaying your student debt with that extra cash.

For banks or even the government, to assume such a risk is a huge risk. Remember, these people aren’t here to improve your life; they’re here to improve their own. To keep you from defaulting on your school loans, they made it virtually hard to repay them. This means that a student loan is subject to several limitations, making it almost hard to discharge in bankruptcy. To avoid paying your school debt, you’d have to die or become chronically incapacitated. They will garnish your earnings if you can’t afford them and attempt to avoid paying them.

Limits on Borrowing

The amount of money you may borrow from the federal government each year and over the course of your life has limits. The amount you can borrow depends on your academic year. It rises when you spend more time in school. Because your chances of graduating decrease with each extra year. Because you’re borrowing against your future wages, lenders assess your risk depending on your school graduation. Additionally, the government may only support a certain amount of your debt.

It’s worth noting that these restrictions only apply to federal Direct Loans. It’s also worth noting that professional and graduate students in healthcare programs may be eligible for extra loan amounts above and beyond these restrictions. 

Finally, you can see that attending graduate school earns you the greatest limit since this sort of education typically has a strong payout, and borrowers who pursue this type of education typically have the potential to repay more debt.

How can I have my student loans forgiven?

You may be qualified for student debt relief if you’ve worked in the public or nonprofit sector for a particular period of time. Or if you’re facing job loss, disability, or school closure. While choices like forbearance or deferral will put a temporary halt to your student loan payments, student debt relief usually includes totally eliminating some or all of your student loans. If you seek forgiveness, the conditions are more stringent than if you request for a deferment or forbearance term. 

How does it work?

Most types of student debt relief require you to continue making student loan payments until the forgiveness of full balance. As an example, you must make payments for five years while teaching at an accredited institution to be eligible for Teacher Loan Forgiveness. After you’ve served those five years, you can apply for student loan relief. 

Some sorts of student loan relief are typically taxable, however, until 2025, a provision in President Biden’s American Rescue Plan exempted them. The forgiven sum will not be referring to taxes if you pay off your federal loans before then. Many analysts believe the provision will extend indefinitely.

Student loan relief under COVID-19 

student loan relief

Student loan payments is put on hold until May 1, 2022, as a result of the COVID-19 problem. If you’re working toward Public Service Loan Forgiveness you’ll get credit for working full-time for an eligible company throughout this period. 

The stopped payments will count against your income-driven repayment plan if you are presently engaged in an income-driven repayment plan for your federal student loans with the objective of forgiveness.

Contact your loan servicer if you’re not sure if you’ve been getting credit toward your plan throughout this period.

How to Request Student Loan Relief

It is a procedure for having student loans forgiven in part or in whole. To begin, contact your loan servicer if you believe you may be eligible for loan forgiveness. Those with Perkins Loans should contact the university that issued the loan or the institution’s designated loan servicer. 

When you speak with your loan servicer, discuss how your loan payments will be affected throughout your debt forgiveness application review time. Depending on the sort of student loan relief you request, the type of loan, or the loan provider, you may or may not have to make payments during the review period. Communicate so that you may prepare for this time.

If your application for student debt relief is approved, you will be reimbursed for your loan installments in full or in part. Some discharge kinds return qualifying payments previously made. And default debts will not be a matter in your credit history.

If your student loan relief application fails, you must continue to make the same qualifying payments according to the requirements of your previous loan. The parameters agreed upon in the promissory note signed for the original loan should be followed for monthly installments. If you feel other criteria should be into account and wish to keep seeking debt forgiveness, your servicer can help.

Now is the time to learn more about the top student relief programs!

Federal Student Loans

Before pursuing student loan relief, it’s critical to understand what federal loans you have. Each federal forgiveness program has its own set of qualifying requirements, and some programs may only be accessible for particular types of federal student loans.

Direct loans are federal student loans provided by the William D. Ford Federal Direct Loan Program. Stafford loans, often known as direct Stafford loans, are a type of student loan. Direct loans might be subsidized or unsubsidized. The program also includes Direct PLUS Loans, that are available to graduate and professional students as well as their parents. If you use the Direct Consolidation Loan program to consolidate federal debts, your new loan will be in the program as well. However, depending on the sorts of debts you combined, you may be eligible for a student loan relief.

Perkins loans are federal loans that are available to undergraduate, graduate, and professional students who have financial needs. 

Federal Family Education Loans (FFEL): Since 2010, FFEL loans have not been accessible to new applicants. Stafford loans, both subsidized and unsubsidized, PLUS loans, and FFEL Consolidation loans were all part of the FFEL program.

You may have many distinct types of federal loans, such as a Perkins loan and numerous direct loans, each of which may be eligible for a separate forgiveness program.

Private student loans

There are several different kinds of private student loans from which to pick. Understanding student loans can assist you in determining which choice is best for you. 

Loans for degrees

Private lenders may offer graduate and undergraduate student loans on a basic level. Some people, however, may go above and above with a list of additional degree-specific loans for medical, business, dentistry, and legal school.

You could even be able to receive a loan to help you prepare for the bar test or pay for your community college tuition.

State-specific loans

Many states have governmental agencies that offer private student loans. These private student loans are usually for students attending colleges inside the state’s borders. Although they may also be available to citizens studying in another state. State-by-state eligibility standards differ.

Agreements on income sharing

Traditional student loans are not the same as income-share agreements. You’ll pay a percentage of your salary over a certain number of years instead of a fixed monthly payment. It is based on your interest rate and student loan balance.

Determine the revenue proportion and payback duration before applying for an income share agreement. To guarantee that both parties are getting equal treatment, these agreements usually include a wage floor and a payment maximum.

Student Loans for Nurses

According to the Health Resources and Service Administration, the Nurse Corps Repayment Program covers up to 85% of outstanding nursing education debt for advanced practice registered nurses, registered nurses, and nurse professors. If you get that, you must serve as a nurse faculty member for two years at either a “critical shortage facility” or a nursing school that has approval.

Options for student loan relief

student loan relief

If you have private student loans and do not qualify for a student loan relief program, there are alternative options for repaying your debt. Here are a few to think about: 

  • Refinance: If you have strong credit or a reliable co-signer, refinancing your student loans may save you money by lowering your interest rate. When you refinance, keep in mind that you will lose your federal student loan safeguards.
  • Deferment: When you return to school, enroll in the military, or become jobless, you may be eligible for a benefit that allows you to temporarily cease making monthly payments on your student loans. Interest may not be accrued in some instances.
  • Forbearance: Forbearance is similar to deferral in that it allows you to temporarily cease making monthly payments on your student loans. The only distinction is that throughout all forbearance periods, interest will accumulate. Forbearance is usually for debtors who are facing serious financial difficulties.

Repayments Determined by Income

Student loan debt forgiveness is not the same as income-driven repayment (IDR). They make student loan debt easier to handle by lowering the monthly payment amount. They can be quite beneficial to persons in financial difficulties. 

These are the programs to look at if you need to make lower monthly payments or if your outstanding federal student loan debt comprises a large amount of your annual income:

REPAYE is a repayment plan in which monthly payments are based on 10% of your discretionary income divided by 12. The amount of your monthly payment depends on your adjusted gross income, family size, and total federal student loan balance.

The Income-Based Repayment (IBR) Plan is a repayment plan with monthly installments equal to 15% (10% if you’re a new borrower) of your discretionary income divided by 12.

Options for Deferment and Forbearance

When it comes to student loan repayment, there are instances when hitting the “stop” button is useful. That is where deferral and forbearance come in.

If you got acceptance by your lender, these two alternatives enable you to cease paying payments for up to three years with deferral and up to 12 months with forbearance. 

If you qualify, deferment is the best option. You can ask to have your payments stopped for the following reasons:

  • You’ve enrolled in college or a technical school for at least half-time.
  • Enrolled in an authorized graduate fellowship program or a disability rehabilitation program.
  • You are experiencing financial difficulties or have no job.
  • You are a member of the active-duty military, the National Guard, or another reserve component of the armed services.

If you are requesting deferment for a Perkins Loan, you must submit a request to your loan servicer or the institution you attended. Deferments are not granted on a first-come, first-served basis. The government may cover your interest if you have a subsidized federal loan or a Perkins Loan. Unsubsidized loans are not paid interest by the government.

If you don’t qualify for a deferral, your loan servicer may be able to help you with forbearance. That allows you to cease paying payments for up to a year. Interest on your loans will continue to accrue. And there can be a requirement to provide paperwork to support your request in some situations.

A physical sickness or financial difficulty, such as losing a job, is the most prevalent grounds for obtaining forbearance. It is necessary to apply, and there is no assurance that you will be accepted.

It’s crucial to note that until the acceptance of your request for deferral or forbearance, you must continue making payments on your student loans.


You’re one step ahead in the hard financial game now that you know so much about student loans relief. By now, you’ve figured out who qualifies for student loan relief and what actions you need to follow to get started. Getting your student debts forgiven might be challenging if you don’t do your study or have the right tools.