There’s good news for Mainers carrying the weight of federal student loans. Several federal programs, brought to you by the U.S. Department of Education, offer relief based on your income or profession.
Public Service Loan Forgiveness Program
First up is the Public Service Loan Forgiveness (PSLF) Program.
You may qualify if you work full-time in a public service job (think government agencies, public schools, or nonprofits).
The goal: Make 120 qualifying student loan payments while employed full-time by the government, not-for-profit organization, or other qualifying employers, and say goodbye to your Direct Loans.
Income-Driven Repayment Plan Forgiveness Waiver
Next, there’s the Income-Driven Repayment Plan Forgiveness Waiver.
Starting in Spring 2023, if you’ve made monthly payments or been in forbearance or deferment for 20 years or more, you could see your remaining loan balance automatically wiped clean. This relief comes courtesy of an updated Income-Driven Repayment (IDR) account adjustment introduced in April 2022.
Note, if you have FFEL or Perkins Loans, you may need to consolidate into a Direct Consolidation Loan to qualify for the IDR Waiver.
But don’t worry — you can do this for free on the Federal Student Aid website, StudentAid.gov. Refinancing federal loans with private lenders eliminates your eligibility for this relief.
Teacher Loan Forgiveness Program
Are you a teacher? The Teacher Loan Forgiveness Program might be for you.
If you’ve worked full-time for five consecutive years in a low-income school or educational service agency, your federal Direct or Stafford Loans could be forgiven.
Forgiveness amounts can reach up to $17,500 for highly qualified math, science, and special education teachers and up to $5,000 for other eligible teachers.
President Joe Biden’s Broad Debt Relief Plan
Lastly, under President Biden’s student loan relief program, a significant reduction in the remaining balance on education loans could be in the cards for many Maine residents.
This program could erase up to $20,000 of debt for Pell Grant recipients who meet certain income criteria and up to $10,000 for other qualifying borrowers with loans held by the federal government.
Bear in mind. The application process is currently paused due to a Supreme Court challenge.
But rest assured. The Biden administration has extended the pandemic-related payment pause and interest rate freeze on loan payments.
The Department of Education data shows a considerable number of Mainers stand to benefit from these federal student loan forgiveness programs.
The final decision now rests with the Supreme Court. So, while the outcome remains uncertain, these federal programs offer hope for substantial student loan relief for those in Maine.