Before exploring Michigan-specific programs, let’s discuss the federal student loan forgiveness programs the US Department of Education offers to all Americans, including Michigan residents.
These programs provide relief based on factors such as your profession or income.
Here are three key programs:
The Public Service Loan Forgiveness (PSLF) Program. PSLF is designed for individuals working in qualifying public service jobs with Direct Loans. If you’ve made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer, such as a government or nonprofit organization, you might be eligible for the PSLF program.
Income-Driven Repayment Plan Forgiveness. IDR plans adjust your monthly student loan payments based on your income and family size, making your payments more manageable. They also promise debt forgiveness after 20 or 25 years of qualifying payments (depending on the plan). Explore our comprehensive guide on income-based repayment forgiveness and the looming IDR Waiver.
Teacher Loan Forgiveness. This program supports educators working in low-income schools or educational service agencies. Eligible teachers can have up to $17,500 of their loans forgiven. If you’re a teacher seeking loan relief, check out our detailed guide on Teacher Loan Forgiveness.
Additionally, President Joe Biden’s broad debt cancellation plan offers another opportunity for forgiveness. This student debt relief program promises to wipe out up to $20,000 of debt for Pell Grant recipients who meet income criteria and up to $10,000 for other qualifying borrowers.
“Nearly 700,000 Michiganders will have their debt cut in half or eliminated entirely, lifting a huge burden off their backs. People can use these savings to buy a home, start a business, get married, or start a family,” said Gov. Gretchen Whitmer in a statement last month.”
At present, the federal government stopped accepting applications for the program as the Supreme Court is assessing the program’s legality. Meanwhile, the Biden administration has prolonged the pandemic-related payment pause and interest rate freeze. This extension lasts 60 days after the Court’s decision or until June 30, whichever occurs first.