There’s good news for Mass residents 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.
Your federal Direct or Stafford Loans could be forgiven if you’ve worked full-time for five consecutive years in a low-income school or educational service agency.
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.
Biden’s Student Loan Forgiveness Plan
Lastly, under President Biden’s debt relief program, a significant reduction in the remaining balance on education loans could be in the cards for many student loan borrowers in Massachusetts.
This program could wipe out up to $20,000 of debt for Pell Grant winners who meet certain income requirements and up to $10,000 of debt for other eligible borrowers with federally held loans.
Due to a case in the Supreme Court, the filing process is on hold right now.
But don’t worry.
The Biden government has put a hold on loan payments and frozen interest rates because of the pandemic.
The statistics from the Department of Education show that a large number of people in Massachusetts could benefit from these federal programs that forgive student loans.
The Supreme Court will now make the final choice. So, the outcome is still uncertain, but these government programs give people in Massachusetts hope for big help with their student loans.