There’s good news for Minnesotans 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’re working full-time in a public service job (think government agencies, public schools, or nonprofits).
The goal: Make 120 qualifying payments while employed full-time by a qualifying employer, 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 been repaying your federal student loans for 20 years or more, you could see your outstanding balance automatically wiped clean. This relief comes courtesy of an updated Income-Driven Repayment (IDR) account adjustment introduced in April 2022.
Do note, however, if you have FFEL or Perkins Loans, you may need to consolidate into a Direct Consolidation Loan. But don’t worry — you can do this for free on the Federal Student Aid website, StudentAid.gov. Just remember, those who refinanced their federal loans with private lenders won’t be eligible 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 Cancellation 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 Minnesotans.
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 Minnesotans 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 a glimmer of hope for substantial student loan relief for Minnesotans.