The path to student loan forgiveness can be confusing and overwhelming if Nelnet has your federal student loans. Nelnet handles a variety of federal loans, and the eligibility for loan forgiveness programs such as President Biden’s student debt relief plan, income-based repayment plan forgiveness, and the Income-Driven Repayment Waiver depends on the type of loan.
Ahead, learn how to get your Nelnet student loans forgiven.
Nelnet is one of five student loan servicers used by the government. Federal borrowers are assigned a loan servicer, who handles student loan administration including payments and other services for borrowers.
Nelnet services two types of student loans
Nelnet only services federal loans, but they come in two varieties:
Ed-owned loans are directly owned by the Department of Education and are usually Direct Loans. These loans are eligible for the Biden administration’s payment pause and interest rate freeze.
However privately-held loans are owned by private lenders or guaranty agencies and are backed by the federal government. These loans, usually Federal Family Education Loans and Federal Perkins Loans, haven’t been eligible for Covid-related forbearance and have required payments and accruing interest.
What Is The Difference Between Nelnet Student Loan Forgiveness and Discharge?
Nelnet student loan forgiveness and discharge share the common purpose of absolving borrowers from their student loan debt, but they do so under different circumstances.
Student Loan Forgiveness
Student loan forgiveness is applicable either after the borrower has made a certain number of qualifying payments over a certain period under and income-driven repayment plan, or based on their profession (e.g., the Public Service Loan Forgiveness program or the Teacher Loan Forgiveness program). These programs are based on the borrower’s service or employment situation.
Student Loan Discharge
On the other hand, student loan discharge happens under dire circumstances like permanent disability, school closure before the borrower can complete the program, or due to a case of identity theft leading to a false loan. In these cases, borrowers aren’t usually required to make any payments before the loan is discharged, unlike forgiveness.
In essence, while both result in the removal of student loan debt, the conditions and terms under which they take effect differ significantly.
OK, So What Is The Nelnet Student Loan Forgiveness Program?
Nelnet does not have its own student loan forgiveness program. Instead, it helps administer different loan forgiveness programs that the United States Department of Education offers to federal student loan borrowers, including the following types of forgiveness programs.
Nelnet administers several kinds of loan forgiveness programs. These include:
Income-Driven Repayment (IDR) Forgiveness
Under this program, the remaining balance of your loan will be forgiven if your federal student loans aren’t fully repaid at the end of the repayment period. The length of this period depends on the specific plan but can be 20 or 25 years. There are four specific plans launched under the IDR umbrella that are crucial to be aware of. But first, let’s talk a little bit about the time-sensitive IDR Waiver.
The IDR Waiver
Also known as the IDR Account Adjustment gives borrowers loan forgiveness credits they’re owed for mismanagement by student loan servicers. This program also has a hidden benefit that few people know about: if you combine your newer loans with your older ones, your entire loan balance can be forgiven immediately.
But you have to apply by April 30th, 2024.
For the full rundown of this program, check out this article next.
One quick way to determine if your Nelnet loan is eligible for forgiveness is to check the first letter of your Nelnet account number. If it starts with “E,” you have Ed-owned loans that typically meet the eligibility requirements for the IDR Waiver.
But if your account starts with “D” or “J,” those may need to consolidate to qualify.
Pay As You Earn (PAYE)
The Pay As You Earn (PAYE) plan caps your monthly federal student loan payments at 10% of your discretionary income, where payments can be spread out over 20 years, after which any remaining balance is forgiven.
Income Based Repayment (IBR)
The Income-Based Repayment (IBR) plan is only slightly different from PAYE as it sets your monthly student loan payments at either 10% or 15% of your discretionary income depending on when you took out your loans, with any remaining balance forgiven after either 20 or 25 years.
Income Contingent Repayment (ICR)
The Income-Contingent Repayment (ICR) plan is yet another Income-Driven Repayment (IDR) plan serviced by Nelnet, which calculates your monthly student loan payments based on 20% of your discretionary income or what you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income, and any remaining balance is forgiven after 25 years.
SAVE Plan Forgiveness (previously REPAYE)
The SAVE Plan Forgiveness is a specific loan forgiveness program geared towards those who have used SAVE Plan loans to finance their education.
With Student Loan Repayments resuming in the fall of 2023, a joint coalition co-led by Massachusetts Attorney General Andrea Joy Campbell and Washington Attorney General Bob Ferguson encouraged student loan borrowers to enroll in this plan as it could reduce their payments significantly even if they were previously enrolled in an IDR plan.
Eligibility criteria and the amount forgiven can vary depending on factors like employment sector, repayment history, and financial hardship. For more specifics, check out our latest YouTube video on this one or visit www.studentaid.gov/SAVE.
This program forgives the remaining balance on your Direct Loans after you have made 120 qualifying payments under a qualifying repayment plan while working full-time for a qualifying employer, typically a government or non-profit organization.
Even if you haven’t completed 120 payments, if you work for a qualifying employer, you’ll want to submit an Employment Certification Form to the MOHELA address listed on the form. Just FYI, if you do this and your qualifications are confirmed, your student loans will be transferred to MOHELA, the official loan servicer of the PSLF program.
Nelnet will likely try to suggest that you keep your loans with them while pursuing PSLF – we do not recommend keeping your student loans with Nelnet during this process.
Also known as the Perkins Loan Cancellation and Discharge program, this forgiveness option provides full or partial loan forgiveness to eligible teachers with Nelnet-serviced student loans. Depending on the subject taught, they may be eligible for up to $17,500 or $5,000 in loan forgiveness. However, specific requirements must be met:
Full-time employment for five consecutive years as a highly qualified teacher,
Completion of those years in a qualifying low-income school or educational service agency after the 1997-98 academic year,
Having obtained your loan before the end of your five academic years of service.
It’s important to note that the Public Service Loan Forgiveness (PSLF) provides an alternative route for loan release, and depending on your total debt amount, it may offer a more beneficial option. Hence, both programs should be considered closely to identify the best solution for you.
While the specifics of each forgiveness program can vary widely, all are designed to help ease the burden of student loan debt for those who have devoted their careers to serving others or who have financial hardship, the requirements of which are outlined above.
For the record, the decision for forgiveness comes from federal programs established by the U.S. Department of Education as opposed to from the loan service company.
There are also programs designed to relieve student loan debt based on circumstances outside of your control. These are called discharge programs and are detailed a little bit further on.
The application process for Nelnet Loan Forgiveness can vary depending on the specific program. Generally, here are some steps to follow:
Step 1: Determine Eligibility. First, determine which forgiveness programs you may be eligible for. This could be based on your occupation, loan repayment plan, or financial hardship.
Step 2: Complete the relevant form. Print and fully complete the forgiveness application form for the relevant program. Each form is specific to its program, you can get those forms from Nelnet or on StudentAid.gov.
Step 3: Employer certification. For programs like PSLF, you will need to get your employer’s certification. The form usually requires your employer’s signature and verification of your employment dates and full-time status.
Step 4: Submit the Form. Once the form is completed and signed, submit it as instructed. Some programs require annual submission, while others require submission every time you change employers.
Step 5: Follow up with Nelnet. After you submit your application, Nelnet will inform you if they require additional documentation from you. They will also confirm whether or not your loans qualify for forgiveness.
Note that while applying, you must continue making your student loan payments until you receive confirmation of approval for loan forgiveness.
Types of Nelnet student loan discharge
While it’s rare, you might qualify for a discharge if you file Chapter 7 or Chapter 13 bankruptcy and the court determines that repayment would cause undue hardship.
Borrower Defense to Repayment
To qualify for Borrower Defense to Repayment Discharge with Nelnet, you must prove that your college or university misled you or engaged in other misconduct in violation of certain state laws, directly related to your federal student loans or to the education services that the loan was intended to pay for.
This could include scenarios where the school made false claims about job placement rates or fees, failed to provide resources they promised, or provided misleading education services.
For the record, it is rare to qualify for this one. Less than 20% of the applications were accepted for this program as of the end of 2020.
School Closure Discharge
If the school closes while you’re enrolled or soon after you withdraw, you may be eligible for the discharge of your federal student loan.
Death or Total and Permanent Disability Discharge
In the unfortunate event of a borrower’s death, or if the borrower becomes permanently disabled and unable to engage in any substantial gainful activity.
False Certification Discharge
This applies if the school falsely certified your eligibility to receive the loan based on your ability to benefit from its training, or if you were a victim of identity theft.
Unpaid Refund Discharge
If you withdrew from the school and the school didn’t make a required return of loan funds to the lender.
As you can see, to qualify for a Nelnet student loan discharge, borrowers must meet specific criteria that typically revolve around circumstances beyond their control. Those scenarios are as detailed above.
If you are still unclear about your discharge eligibility and want to have a chat about it, feel free to book a call with me.
Should You Refinance Your Nelnet Student Loans?
My position is that the only people who should consider refinancing are those who are unlikely to get their loans forgiven or discharged and have enough income to afford the monthly payments on their refinanced loans.
This is because once you refinance your loan, it becomes a private loan and therefore not eligible for any federal forgiveness or discharge programs any longer. So give this some serious thought.
Bottom Line: Will My Nelnet Student Loans Be Forgiven?
While the Biden Administration was shot down by the Supreme Court last summer (2023) in some of its student loan forgiveness goals, there are still several Nelnet student loan forgiveness options available. The right one for you depends on your loan type, career, payment history and student loan balance.
Need help deciding the best path for your Nelnet loans and determining whether your student loan debt could be forgiven? Book a call with me, and we’ll review your loans and develop the right forgiveness program for you.