Student Loan Forgiveness with Nelnet

Student Loan Forgiveness with Nelnet

If you have student loans, you may be eligible for loan forgiveness, which allows you to have all or part of your loan balance forgiven. Loan forgiveness programs are designed to help borrowers who are having difficulty repaying their loans and may be available to those who work in certain public service jobs or certain occupations. In this article, we’ll provide a detailed guide to student loan forgiveness options with Nelnet, including loan discharge options and steps to apply for forgiveness.

Loan Forgiveness Options

There are several loan forgiveness options available to borrowers with federal student loans, including the Public Service Loan Forgiveness (PSLF) program and income-driven repayment (IDR) plans.

Public Service Loan Forgiveness (PSLF) Program:

The PSLF program is a federal program that forgives the remaining balance on Direct Loans for borrowers who are employed full-time in a public service job and make 120 qualifying monthly payments under an IDR plan. To be eligible for PSLF, you must work for a government organization at the federal, state, local, or tribal level, or for a tax-exempt 501(c)(3) nonprofit organization.

Income-Driven Repayment (IDR) Plans:

IDR plans are repayment plans that base your monthly student loan payment on your income and family size. There are four IDR plans available:

  • Revised Pay As You Earn Repayment Plan (REPAYE)
  • Pay As You Earn Repayment Plan (PAYE)
  • Income-Based Repayment Plan (IBR)
  • Income-Contingent Repayment Plan (ICR)

Revised Pay As You Earn Repayment Plan (REPAYE):

Under REPAYE, your monthly student loan payment is based on your income and family size. If you have undergraduate loans, your payment will be 10% of your discretionary income, and if you have graduate loans, your payment will be 10% of your discretionary income. Your remaining loan balance may be forgiven after you make payments for 20 years (undergraduate loans) or 25 years (graduate loans).

Pay As You Earn Repayment Plan (PAYE):

Under PAYE, your monthly student loan payment is based on your income and family size. Your payment will be 10% of your discretionary income. Your remaining loan balance may be forgiven after you make payments for 20 years (undergraduate loans) or 25 years (graduate loans).

Income-Based Repayment Plan (IBR):

Under IBR, your monthly student loan payment is based on your income and family size. If you have loans that were disbursed before July 1, 2014, your payment will be 15% of your discretionary income. If you have loans that were disbursed after July 1, 2014, your payment will be 10% of your discretionary income. Your remaining loan balance may be forgiven after you make payments for 20 years (undergraduate loans) or 25 years (graduate loans).

Income-Contingent Repayment Plan (ICR):

Under ICR, your monthly student loan payment is based on your income, family size, and loan amount. Your payment will be the lesser of 20% of your discretionary income or the amount you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income. Your remaining loan balance may be forgiven after you make payments for 25 years.

Under an IDR plan, your remaining loan balance may be forgiven after you make a certain number of payments (typically 20 to 25 years, depending on the plan). However, any forgiven amount may be taxable as income.

Loan Discharge Options

There are also several loan discharge options available to borrowers who meet certain criteria. A loan discharge cancels your obligation to repay all or part of your loan. Here are some common types of loan discharge options:

  1. Total and Permanent Disability (TPD) Discharge: If you’re unable to work due to a total and permanent disability, you may be eligible for a TPD discharge. To apply for a TPD discharge, you’ll need to submit a TPD Discharge Application and supporting documentation, such as a certification from a doctor.
  2. Closed School Discharge: If your school closes while you’re enrolled or shortly after you withdraw, you may be eligible for a closed school discharge. To apply for a closed school discharge, you’ll need to complete a Closed School Loan Discharge Application and submit it to your loan servicer.
  3. Borrower Defense to Repayment Discharge: If you took out a student loan to attend a school that engaged in misconduct or made false or misleading statements to you, you may be eligible for borrower defense to repayment discharge. To apply for a borrower defense to repayment discharge, you’ll need to complete a Borrower Defense to Repayment Application and submit it to your loan servicer.
  4. Death Discharge: If you die, your student loans may be discharged. Your loan servicer will require documentation, such as a death certificate, to process the discharge.
  5. Bankruptcy Discharge: In rare cases, you may be able to discharge your student loans through bankruptcy. However, it’s important to note that student loans are difficult to discharge through bankruptcy and you’ll need to meet strict eligibility requirements.
  6. Other Discharge Options: There may be other circumstances under which you may be eligible for a loan discharge, such as if you were the victim of a school’s identity theft or if your school falsely certified your eligibility for a loan.

It’s important to note that loan forgiveness and discharge options are typically only available for federal student loans, not private student loans. If you have private student loans, you’ll need to contact your lender to inquire about forgiveness or discharge options.

Steps to Apply for Forgiveness

If you think you may be eligible for loan forgiveness or a loan discharge, here are the steps you’ll need to follow to apply:

  1. Determine your eligibility: The first step in applying for loan forgiveness or a loan discharge is to determine if you’re eligible. You can use the Department of Education’s Loan Forgiveness Tool to see if you qualify for any forgiveness or discharge programs.
  2. Choose the appropriate forgiveness or discharge program: Once you’ve determined that you’re eligible for loan forgiveness or a loan discharge, you’ll need to choose the appropriate program. If you’re eligible for multiple programs, it’s important to consider which one will provide the most benefit to you.
  3. Gather required documents: After you’ve chosen a forgiveness or discharge program, you’ll need to gather the required documents. These may include proof of employment, certification from a doctor, or transcripts from your school.
  4. Complete the necessary application: You’ll need to complete the appropriate application to apply for loan forgiveness or a loan discharge. Applications are available on the Department of Education’s website or through your loan servicer.
  5. Submit your application: After you’ve completed your application, you’ll need to submit it to your loan servicer along with any required documentation.
  6. Wait for a decision: Once you’ve submitted your application, it may take several months for a decision to be made. Your loan servicer will notify you of the outcome of your application.

Conclusion

If you’re having difficulty repaying your student loans, you may be eligible for loan forgiveness or a loan discharge. There are several forgiveness and discharge options available, including the Public Service Loan Forgiveness (PSLF) program, income-driven repayment (IDR) plans, loan discharges for total and permanent disability, closed school, and borrower defense to repayment. To apply for loan forgiveness or a loan discharge, you’ll need to determine your eligibility, choose the appropriate forgiveness or discharge program, gather required documents, complete the appropriate application, and submit it to your loan servicer.

If you think you may be eligible for a loan forgiveness or discharge program, it’s important to carefully review the eligibility requirements and gather the necessary documentation before applying. You can find more information about loan forgiveness and discharge options on the Department of Education’s website or by contacting your loan servicer.

I hope this information helps understand the types of loan discharge options that may be available to you. If you have any further questions or need additional assistance, you can visit the Nelnet website or contact Nelnet customer service for more information.

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