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Additional Benefits of Income Driven Repayment Plans

  • Public Service Loan Forgivness

There are many ways to verify if your employer is qualified such as:

  • Local Government
  • State Government
  • Federal Government
  • Non-Profit Organization (501c3 Tax Code)
  • Total & Permanent Disability

There three ways to verify your disability qualification such as:

  • TPD From
  • BPQY Letter
  • VA Disability 
  • Borrowers Defense Discharge

The institution you attended matters the most such as:

  • Everest
  • ITT Tech
  • Lincoln Tech
  • DeVry University
  • Kaplan University
  • Teacher Loan Forgivness

The critiria for Teacher Loan Forgiveness is very specific

  • Must be Public School
  • Full Time Teachers
  • Only Direct and FFEL Loans
  • Varies Depending on Role

Public Service Loan Forgiveness (PSLF)

  • Eligibility:
    • Available to borrowers who work full-time (at least 30 hours per week) for a qualifying employer, which includes government organizations (federal, state, local, or tribal) and nonprofit organizations classified as 501(c)(3).
    • Only Direct Loans qualify; however, borrowers with FFEL or Perkins Loans may consolidate into a Direct Consolidation Loan to become eligible.
  • Payment Requirements:
    • Borrowers must make 120 qualifying monthly payments (10 years), which must be made under a qualifying repayment plan, typically an income-driven repayment (IDR) plan.
    • Payments do not need to be consecutive.
  • Benefit:
    • After 120 qualifying payments, the remaining balance on the loan is forgiven tax-free.
  • Considerations:
    • PSLF offers substantial savings for borrowers with high student loan debt who plan to work in public service careers long-term. Borrowers must submit an Employment Certification Form (ECF) annually and whenever they change jobs to ensure they are on track for PSLF.

Best for: Individuals in public service roles with high loan balances, such as teachers, healthcare workers, and government employees.

Total and Permanent Disability (TPD) Discharge

  • Eligibility:
    • Available to borrowers who are unable to work due to a total and permanent disability. To qualify, borrowers must provide documentation from one of the following:
      • The U.S. Department of Veterans Affairs (VA), confirming the borrower has a service-connected disability.
      • The Social Security Administration (SSA), showing the borrower receives Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) with a notice of continued disability review within 5-7 years.
      • A physician’s certification that the borrower is totally and permanently disabled.
  • Benefit:
    • All outstanding federal student loans are discharged, meaning the borrower is no longer obligated to repay.
  • Considerations:
    • The discharged loan amount may be considered taxable income by the IRS (though tax implications may vary based on the year).
    • There’s typically a 3-year post-discharge monitoring period (except for veterans), where any income increase or ability to work could potentially jeopardize the discharge.

Best for: Borrowers unable to work due to severe, permanent disabilities.

Borrower Defense to Repayment Discharge

  • Eligibility:
    • Designed for borrowers whose schools misled them or engaged in substantial misconduct in violation of laws. This could include false claims about job placement rates, program accreditation, or the quality of the education provided.
  • Application Process:
    • Borrowers must submit a detailed application outlining the school’s misconduct, with supporting evidence, to the U.S. Department of Education.
  • Benefit:
    • The borrower may be eligible for partial or full discharge of federal student loans. In some cases, they may also receive a refund of prior payments.
  • Considerations:
    • Approval is not guaranteed and is contingent on evidence and case review.
    • Processing times can be lengthy, especially if there’s a high volume of applications.

Best for: Borrowers whose institutions engaged in fraud or misconduct, leading to negative financial consequences for the borrower.

Teacher Loan Forgiveness

  • Eligibility:
    • Available to highly qualified teachers who have taught full-time for five consecutive years in a low-income school or educational service agency.
    • Only Direct and FFEL loans qualify (Parent PLUS loans are excluded).
  • Benefit:
    • Forgiveness amounts vary based on the teacher’s role:
      • Up to $5,000 for qualified elementary and secondary school teachers.
      • Up to $17,500 for highly qualified math, science, and special education teachers at the secondary level.
  • Considerations:
    • Borrowers cannot receive both Teacher Loan Forgiveness and PSLF for the same service period. However, teachers can pursue PSLF after receiving Teacher Loan Forgiveness.
    • This program offers a relatively modest benefit and is most advantageous for teachers with relatively low loan balances.

Best for: Teachers working in high-need subjects and low-income schools who meet the 5-year requirement and do not plan to pursue PSLF.

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