If you work in public service, you already know that feeling of self-fulfillment that comes from helping others, but you might not realize a potential added benefit of your public service work: federal student loan forgiveness.
The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. I know what you’re thinking … “qualifying” is used a lot of times in that sentence. How would you possibly know if you qualify? You don’t have to guess; there’s an easy way to determine your eligibility for Public Service Loan Forgiveness.
Submit an Employment Certification Form (sometimes called an ECF).
1. What’s an ECF and why should I submit it?
An ECF is a form that you can complete and submit to keep track of your progress toward loan forgiveness under the Public Service Loan Forgiveness Program. It requires you to provide some basic information about you (the borrower) and your employer. Both you and your employer are required to certify that the information on your ECF is true, complete, and correct. Once you submit your form, the PSLF servicer will determine if your loans are eligible for PSLF and if your employer qualifies. Qualifying public service employment can include government work, teaching in a public school, or working at a non-profit organization.
If you’re a parent of a dependent undergraduate student or if you’re someone planning to attend graduate school, you’ve probably heard of the PLUS loan. The Direct PLUS Loan is a federal loan program that’s available specifically for these two groups of people to help cover the remaining cost of attending school after all other financial aid has been applied. Below we’ll explain the requirements, application process, and some tips if you’re considering getting a PLUS loan.
Requirements to Receive a PLUS Loan
No Adverse Credit History A credit history is a summary of your financial strength, including your history of paying bills and your ability to repay future loans. To qualify for a PLUS loan, you cannot have an adverse credit history.
Your child is going to college or career school—that’s great! But you may have questions about how to pay for it. If your child hasn’t completed the Free Application for Federal Student Aid (FAFSA®), ask your child to complete it today. Completing and submitting the FAFSA is free and quick, and it gives your child access to the largest source of financial aid to pay for college or career school, including loans YOU can receive.
After applying for financial aid, your child may receive an aid offer from the school that includes grants, federal work-study, scholarships, school and state aid, and federal student loans. Those federal loans may include a Direct PLUS Loan that you can get as a parent borrower. PLUS loans are an excellent option if you need money to pay your child’s education expenses, but you’ll want to make sure you understand the loan terms before you get one. Once you’ve taken out a PLUS loan, you must repay it, even if your child doesn’t complete their degree, can’t find a job related to their program of study, or if you or your child are unhappy with the education you paid for with your loan.
If you’re having difficulty repaying your federal student loans, then you might want to consider a deferment or forbearance. These two temporary solutions allow you to stop making or, in some instances, to lower your monthly federal student loan payment. While both can be helpful solutions if you’re experiencing temporary hardship, they aren’t great long-term solutions because they can be costly, and if you aren’t careful, your loan balance could be higher when your deferment or forbearance period ends.
Before you apply, here’s some information that can help you decide if deferment or forbearance is the best option for you.
1. Should I choose a deferment or forbearance?
The two main differences between deferment and forbearance are
the situations under which you may qualify, and
whether or not you’ll be charged interest when you’re not making payments.
Most borrowers first apply for a deferment because it’s usually the best option and then if they aren’t eligible for it, their loan servicer (the organization that manages your student loan) may grant a forbearance.
Getting admitted into graduate school took a big weight off my shoulders, but it didn’t last long. I was already financially strapped from paying for four years of undergrad and I soon had to figure out how to pay for grad school. With the help of federal student aid and funding from my school, I was able to go to grad school with all my school expenses covered. If you’re preparing for grad school, here are my tips for success.
1. Start thinking about your graduate school finances early.
Before you even begin applications, you should understand what loans you already have and consider what your financial situation might look like as a graduate student. If you’re considering graduate school at the same institution you attended for undergrad, look for opportunities to get graduate credit while you’re still an undergrad. When I was an undergraduate senior, my university allowed me to take graduate courses that counted toward my master’s degree and saved me thousands in future tuition expenses.
2. Learn about the different types of federal aid for graduate students.
I bet many of you have seen ads on Facebook that sound something like this:
“Want Student Loan Forgiveness in Two Weeks? CALL NOW!”
“Apply for Obama Loan Forgiveness in 5 minutes!”
Usually, if something sounds too good to be true, then it probably is. There are countless ads online from companies offering to help you manage your student loan debt…for a fee, of course. While the U.S. Department of Education (ED) does offer some legitimate student loan forgiveness programs and ways to lower your student loan payments, they are all free to apply for. Don’t pay for help when you can get help for free!
If you’re a federal student loan borrower, ED provides free assistance to help:
Everyone wants their student loans forgiven. The perception is that very few qualify. But did you know that there is one broad, employment-based forgiveness program for federal student loans? Let me break down some key points of Public Service Loan Forgiveness (PSLF) to help you figure out if you could qualify.
[ 1 ] Work for a government or non-profit organization
Qualifying for Public Service Loan Forgiveness is not about your job, it’s about who your employer is. In order to qualify for Public Service Loan Forgiveness, you must work for a “public service” employer. What does that mean? Everyone has a different definition.
Mistake #1: Letting your contact information become out-of-date
Moving away from campus?
Changing your cell phone number or e-mail address?
Make sure you let your loan servicer know. Their services are provided free of charge, but they can only help you if they can reach you.
Mistake #2: Paying for student loan help
You may have seen an ad on Facebook, or gotten phone calls or letters from companies offering to help you lower your payment or apply for loan forgiveness for a fee. If someone asks you to pay for these services, you are not dealing with the U.S. Department of Education or our loan servicers.
We don’t charge application or maintenance fees. If you’re asked to pay, walk away (or hang up).
So you filed your FAFSA and got accepted to a college. Congrats! Your school will send you an award letter that lists different types and amounts of financial aid you’re eligible for. These types of aid could include grants, scholarships, work-study funds, or student loans. You might see two types of federal student loans in your letter: Direct Unsubsidized Loan and Direct Subsidized Loan. Some people refer to these loans as Stafford Loans or Direct Stafford Loans or just subsidized and unsubsidized loans. It’s important you know the basics about these two types of loans before you sign to accept either of them.
Almost time to start paying back your student loans? Contrary to popular belief, your student loan payments don’t have to stop you from living your life. You just have to weigh your options and find a strategy that works within your budget. Here are some steps to get you started.
1. Compare monthly payment amounts
The amount you pay each month toward your student loans will depend on the repayment plan you choose. If you take no action, you will be automatically enrolled in the 10-year Standard Repayment Plan. If you don’t think you can afford that amount or you want a lower monthly payment, consider switching to an income-driven repayment plan, where your monthly payment could be as low as $0 per month. Just know that when you make payments based on your income your monthly payment amount may be lower, but you will likely pay more in total over a longer period of time.
Nothing says, “Welcome to adulthood” quite like getting your first student loan bill in the mail. If student loans are your reality, here are some tips that may help you (from someone who is going through this too).
I think everyone can agree that student loans are no fun to pay back, but ignoring them can have serious consequences (and it won’t make them go away.) If you’re worried about your student loans or don’t think you can afford your payments, contact us for help. No matter what your financial situation is, we can help you find an affordable repayment option. For many, that could mean payments as low as $0 per month.
Life after graduation gets real, real fast. To make a plan to tackle your student loans, you need to understand what money you have coming in, and what expenses you have going out. If you haven’t already, it’s important that you create a budget. This will help determine your repayment strategy. Here are some budgeting tips to help you get started.
There is no one-size-fits-all approach to paying back student loans. The key question you need to answer is: Do you want to get rid of your loans quickly or do you want to pay the lowest amount possible per month?
Today, more than ever before, a college diploma or job-training credential is one of the best investments you can make in your future. By some estimates, a bachelor’s degree is worth an average of a million dollars over the course of your lifetime.
But college also has never been more expensive, and far too many Americans are struggling to pay off their student loan debt.
Maybe you haven’t quite landed that dream job in your field of study yet. Or you decided to go into public service instead of taking the highest-paying offer. Your reward for investing your time and money in the skills and knowledge needed to secure your future shouldn’t be a sky-high monthly payment.