Tennesseans burdened with federal student loans, we’ve got good news. Several federal programs, thanks to the U.S. Department of Education, offer relief based on your income or profession.
Public Service Loan Forgiveness Program
First on the list is the PSLF Program.
If you’re working full-time in a public service job (like government agencies, public schools, or nonprofits), you might qualify.
The aim? Make 120 qualifying student loan payments while working full-time for the government, a not-for-profit organization, or other qualifying employers. Then, say goodbye to your Direct Loans.
Income-Driven Repayment Plan Forgiveness Waiver
Then, there’s the Income-Driven Repayment Plan Forgiveness Waiver.
Starting in Spring 2023, if you’ve been making monthly payments or been in forbearance or deferment for 20 years or more, your remaining loan balance could be automatically wiped clean. This relief is thanks to an updated Income-Driven Repayment (IDR) account adjustment introduced in April 2022.
But take note, if you have FFEL or Perkins Loans, you might need to consolidate into a Direct Consolidation Loan to qualify for the IDR Waiver.
You can do this for free on the Federal Student Aid website, StudentAid.gov. But remember, refinancing federal loans with private lenders means you’re no longer eligible for this relief.
Teacher Loan Forgiveness Program
Are you a teacher? The Teacher Loan Forgiveness Program could be right up your alley.
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
Finally, under President Biden’s student loan relief program, a significant reduction in the remaining balance on education loans could be on the horizon for many Tennessee residents.
This program could wipe out 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.
But hold on.
The application process is currently on hold due to a Supreme Court challenge. But don’t worry. The White House has extended the pandemic-related payment pause and interest rate freeze on loan payments.
Data from the Department of Education shows a considerable number of Tennesseans meet the eligibility could benefit from these federal student loan forgiveness programs.
The ball is now in the Supreme Court’s court. So, while the outcome is still up in the air, these federal programs offer a glimmer of hope for substantial student loan relief for those in Tennessee.