Students who find themselves in debt with student loans may be able to free themselves from this burden depending on the career path they pursue.
The Public Service Loan Forgiveness Program allows full-time employees of nonprofit and government organizations to have the remaining balance of their federal loans forgiven after 10 years.
Applicants will be eligible once they have made 120 monthly payments under a qualifying repayment plan while working full-time for an eligible employer.
Under a one-year waiver announced last October, borrowers can receive credit for past payments that were previously ineligible for the program. This is the first time such a waiver has been issued for the PSLF program, according to Andrew Pentis, Student Loan Hero Certified Student Loan Advisor and higher education finance expert.
Student Loan Hero is a company founded in 2012 to help student borrowers organize, manage and pay off their student loan debt.
According to a report by the company, the program will allow approximately 9.3 million eligible employees to have their federal student loans forgiven, which corresponds to approximately 23% of federal student borrowers. In Louisiana, approximately 17% of federal student loan borrowers may qualify for this rebate program.
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“This has the potential to have a very large effect, and the (US) Department of Education estimates that these changes will impact approximately 550,000 borrowers,” Pentis said. “If you think of the student loan problem in this country as a kind of big bucket of water, it’s at least a cup of that water being carried around, and that’s really positive.”
Pentis said there are more than 45 million borrowers in the country, so not everyone will enjoy the benefits of this waiver. This includes borrowers from Federal Parent Plus Loans, who are not eligible for the PSLF program.
Additionally, Pentis said eligible borrowers should start investigating the PSLF program as soon as possible. Some borrowers may need to consolidate their loans to qualify, and Pentis said those steps take time.
According to the Student Loan Hero report, 109,514 of Louisiana’s 636,800 federal borrowers could qualify for this program through the waiver. This breaks down into 31,518 nonprofit employees, 32,569 local government employees, 30,626 state government employees, and 14,801 federal government employees.
The report also revealed that the total amount of debt in Louisiana eligible for the PSLF is $3.8 billion, the 27th highest figure in the country.
Pentis said one of the main reasons borrowers don’t have access to these loan relief programs is due to lack of information. For those who receive the information in time, some are discouraged by the amount of their debt and doubt that programs like this can help them.
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“That’s kind of the general picture with many student loan forgiveness and repayment assistance programs,” Pentis said. “I often speak with borrowers about their repayment options, and I often say, ‘Well, you’re a nurse, so you might qualify for this state-based loan repayment assistance program, specifically for nurses,” and a lot of times what I hear back is, ‘Whoa, I didn’t know that existed.'”
To learn more about the PSLF program, visit studentaid.gov/manage-loans.
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