For decades, educators have encouraged young people to obtain increasingly expensive postsecondary degrees that provide declining real returns in the labor market, and to obtain large subsidized loans, regardless of their career choices.
In 2016, the average college graduate borrowed between $ 26,450 and $ 31,200. Fortunately, some borrowers can find relief. There are many programs, some old and some new, through which debt forgiveness is possible, and we should expect more programs to emerge in the near future, as the unsustainable burdens of student debt become an issue broader political.
- Using Debt Forgiveness
Debt forgiveness programs are exactly what they sound like. In a student loan forgiveness program, eligible borrowers may be forgiven some or all of their student public debt, either immediately or over a period of time. Unfortunately, none of these programs condone private loans. The only known methods to discharge or eliminate amounts of private loans is through bankruptcy or a timely restructuring with the borrower’s private lender.
Currently, there are four major programs and several other minor programs that can cancel or significantly reduce the balance of your federal student loan. The main ones are the forgiveness of public service loans, the cancellation of Perkins loans, the payment based on income and the forgiveness of loans for teachers. The catch is that these may not apply if the debtor is in the default state, which means that the loan has not been paid for more than nine months.
Each plan has very strict requirements that must be met before student loans can be forgiven. Many require the annual submission of official documents to student loan administrators, and any mistake could disqualify an eligible borrower. If you are considering or are currently in the process of trying to have your loans forgiven, it is crucial that you understand the necessary steps and follow them diligently.