7 Facts You Should Know About Student Loan Forgiveness Programs

You may have heard about the lucky Morehouse College students who received a massive graduation gift from their commencement speaker, Robert F. Smith. The billionaire casually mentioned that he's picking up the tab for the entire 2019 graduating class's student loan debt.

That's the largest individual donation ever made to a historically black college. What an amazing gift! Smith made it possible for more than 400 students to begin exciting new chapters in their lives without being weighed down with the burden of education debt.

If you weren't as fortunate as the Morehouse grads and still have student loans, it's essential to understand how to pay them off quickly and for the least amount possible. Hands down, one of the best ways to say goodbye to student loans is having them forgiven.

I received a question about this topic from Tamara W., who says, "Talk to me about the Public Service Loan Forgiveness program. I've qualified, and they say my loans will be forgiven in five years, but I'm not so sure. I'm on the recommended income-based repayment plan and make the lowest qualifying payments, but my interest is skyrocketing and freaking me out. Should I also apply for the teacher forgiveness program?"

Thanks for your question, Tamara. In this post, I'll give you an answer and review seven facts you should know about student loan forgiveness. You'll learn the types of loans, borrowers, debt amounts, and payments required to qualify. Plus, we'll cover key considerations for anyone who'd like to have their education debt wiped out by a forgiveness program.

7 Facts to Know About Student Loan Forgiveness

1. Private student loans don’t qualify for forgiveness.

Unfortunately, unless you have a rich uncle or generous friends, there aren’t any forgiveness programs for private student loans. Private lenders are in business to make a profit, and they expect you to repay every penny that you borrowed.

But don’t make the assumption that every type of federal student loan is eligible for forgiveness. Keep reading to learn which borrowers and what types of loans qualify.

If you’re having trouble paying private student loans, there may be options to make your payments more affordable. For instance, you may qualify to refinance at a lower interest rate, which could reduce your monthly payment.

Some private lenders may offer deferment or forbearance to temporarily reduce or halt payments when you’re dealing with a financial hardship. For instance, SoFi offers unemployment protection that suspends your monthly payments for up to 12 months if you lose your job and your loan is in good standing.

Always contact your lender if you have...

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