A lot of borrowers want to know (especially after seeing so many TV ads) if there is any way to get forgiveness. While it does happen, it is very specific. Here are some common things people do not know about forgiveness.
1. There is no such thing as partial forgiveness
For federal programs, forgiveness is all or nothing for whatever they are offering. If you qualify for a $5,000 Teacher Loan Forgiveness after 5 years but only work 4 you do not get $4,000 forgiven. It is an all or nothing proposal.
2. Most forgiveness programs you can take a break from
While in programs such as the Public Service Loan Forgiveness you cannot exit the program, you are able to skip payments due to forbearance or deferment. This will simply lengthen the time to your forgiveness. This is not always the case though. For programs such as the Teacher Loan Forgiveness, you must have taught 5 consecutive years.
3. This is done by federal guidelines, not your servicers
All criteria for forgiveness programs are created on the federal level by Congress and the DOE and cannot be negotiated. This includes income guidelines that include gross income and what a formula does and does not consider (including extenuating bills, etc.)
4. The process can be slow
Because many of these things must go through the Department of Education, its subsidiary the FSA, and sometimes the treasury, the forgiveness process can be slow. For example for the Teacher Loan Forgiveness it takes your servicer approximately 30 days to deem if your application should qualify before it is passed on to FSA (Federal Student Aid) who takes 90 additional days to review and complete the process.
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