Single Mom Student Loan Forgiveness: Your Options in 2024

• As a single mom, you may qualify for $0 monthly payments under the current SAVE Plan, even if you have Parent PLUS loans.

• Recent changes have made Public Service Loan Forgiveness more accessible for single mothers in government or non-profit jobs.

• If you consolidated your loans before June 30, 2024, you might benefit from the IDR Account Adjustment, bringing you closer to forgiveness.

• New forgiveness options are in development that could provide relief, especially if you’ve been repaying loans for a long time.

• Your eligibility for forgiveness depends on your specific situation, including your income, job, and types of loans.

Related: Student Loan Forgiveness for Low-Income

Single moms, let’s start with the truth: There aren’t any specific student loan forgiveness programs or grants designed just for single mothers. But don’t click away yet – there’s still good news.

Several forgiveness programs can significantly benefit single mothers like you. These programs can offer:

• Affordable monthly payments, often as low as $0

• A path to loan forgiveness over time

• Ways to balance loan repayment with your family’s needs

While it’s not the immediate forgiveness you might hope for, these options have worked for many single mothers in situations just like yours. They can provide real relief and a clear path forward.

In this guide, we’ll break down:

• How to lower your monthly payments

• Programs that can lead to loan forgiveness

• Special options for public service workers and Parent PLUS loan holders

• Upcoming changes that could offer even more relief

Our goal is to help you find the best strategy to manage your loans and secure a better financial future for you and your children. Let’s get started.

Related: Student Loan Forgiveness for Low Income

The SAVE Plan could be your ticket to dramatically lower student loan payments – possibly even $0 per month. If you’re juggling loan payments with childcare costs, housing, and all the other expenses of raising kids on your own, this plan is designed with you in mind.

Here’s how the SAVE Plan can make a real difference in your monthly budget and long-term financial health:

What it is: The SAVE Plan is the newest and most generous income-driven repayment option available. It’s designed to make your monthly payments more affordable based on your income and family size.

How it can help you:

• Lower monthly payments: Your payments could be as low as $0 per month, depending on your income.

• Protection for your family: More of your income is protected from loan payments, especially important for single-parent households.

• Faster path to forgiveness: Any remaining balance is forgiven after 20-25 years of payments.

Who qualifies: You’re eligible if you have federal Direct Loans. This includes loans you took for your own education and Parent PLUS loans if you consolidate them (more on this later).

Key benefits for single moms:

1. Family size matters: Your children count in determining your family size, which could lower your payments.

2. Lower payments: The plan uses 225% of the poverty line to calculate discretionary income, meaning more of your income is protected.

3. Interest benefit: If your payment doesn’t cover accrued interest, the government will cover the difference, preventing your balance from growing.

How to apply: You can apply for the SAVE Plan through your loan servicer or at StudentAid.gov. You’ll need to provide information about your income and family size.

Note: While some parts of the SAVE Plan are currently on hold due to legal challenges, the core benefits, including the potential for $0 payments, are still available. The U.S. Department of Education is working to implement additional benefits, which could make this plan even more advantageous for single mothers in the future.

Next steps: If you’re struggling with your current payments, consider applying for the SAVE Plan as soon as possible. It could significantly reduce your monthly burden, giving you more financial breathing room to care for your family.

If you work full-time for the government or nonprofit organization, you can have you federal student loans forgiven after 10 years of making student loan payments.

Here’s how the Public Service Loan Forgiveness program can work for you:

What it is: The PSLF Program forgives your remaining federal student loan balance after you make 120 qualifying monthly payments (10 years) while working full-time for an eligible employer.

How it can change your life:

• Total forgiveness: After 10 years, your remaining loan balance is wiped out, tax-free.

• Combine with income-driven plans: Use PSLF with plans like SAVE to keep payments low while working towards forgiveness.

• Covers Parent PLUS loans too: If you took out loans for your kids, you can include these after consolidation.

Who qualifies:

• You work full-time (at least 30 hours a week) for:

  • Government organizations (federal, state, local, or tribal)

  • Non-profit organizations (501(c)(3) or other qualifying non-profits)

• You have Direct Loans or consolidate your loans into a Direct Consolidation Loan

• You’re on an income-driven repayment plan

Key benefits for single moms:

1. Career flexibility: Many jobs single moms often hold (teachers, nurses, social workers) qualify for PSLF.

2. Lower payments now, forgiveness later: Combine with income-driven plans to keep payments affordable while working towards forgiveness.

3. Secure future: After forgiveness, you can focus more of your income on your family’s needs and your own retirement.

Recent changes you should know:

• The IDR Account Adjustment: If you consolidated before June 30, 2024, you might get credit for past periods of repayment, even if you weren’t on a qualifying plan before.

• Expanded eligibility: Recent changes have made it easier to qualify, counting more types of payments and employers.

How to get started:

1. Verify your employer qualifies using the PSLF Help Tool on StudentAid.gov.

2. Consolidate any non-Direct federal loans into a Direct Consolidation Loan.

3. Switch to an income-driven repayment plan like SAVE.

4. Submit the PSLF form annually to certify your employment and track your progress.

Next steps: If you work in public service, don’t wait to start your PSLF journey. Every qualifying payment gets you closer to forgiveness. Even if you’re not sure you qualify, it’s worth checking – recent changes have made many more single moms eligible for this program.

Related: How Does the SAVE Plan Work With the PSLF?

While SAVE and PSLF are popular forgiveness options, single mothers should also be aware of other Income-Driven Repayment (IDR) plans that offer forgiveness after 20 to 25 years of payments. These plans can be crucial for those who don’t qualify for PSLF or are affected by the SAVE plan hold.

Key IDR Plans Offering Forgiveness:

1. Pay As You Earn (PAYE): Offers forgiveness after 20 years of qualifying payments. The payments are capped at 10% of discretionary income. This plan is available to newer borrowers (those who borrowed after October 1, 2007)

2. Income-Based Repayment (IBR): This plan offers forgiveness after 20 or 25 years, depending on when you borrowed.  Your payments are 10% or 15% of discretionary income, based on borrowing date. It’s available to all borrowers with eligible federal loans

3. Income-Contingent Repayment (ICR): This plan offers forgiveness after 25 years of payments. The payments are the lesser of 20% of discretionary income or fixed payments on a 12-year plan. ICR is the only IDR plan available for Parent PLUS loan borrowers who consolidate, without using double consolidation.

How IDR Forgiveness Works:

• Make payments based on your income and family size for 20 or 25 years

• After the repayment period, any remaining balance is forgiven

• Unlike PSLF, this forgiven amount may be taxable as income

Benefits for Single Mothers:

• Lower monthly payments based on income, leaving more money for family expenses

• Long-term solution for those not eligible for PSLF or affected by SAVE plan delays

• Potential for forgiveness even if your career doesn’t qualify for PSLF

Important Considerations:

• Recertify your income and family size annually

• Understand the potential tax implications of forgiveness

• Consider the long-term cost compared to standard repayment

Next Steps:

• Assess your loan types and eligibility for different IDR plans

• Use the Loan Simulator to compare potential payments and forgiveness amounts under different plans

• Consider consulting a student loan expert to determine the best long-term strategy for your situation

Another forgiveness program that single mothers could benefit from was the one-time IDR Account Adjustment. Here’s a brief overview of this program and its current status:

What it was: A one-time update giving borrowers credit towards forgiveness for past periods of repayment, forbearance, and deferment.

Current status:

• The qualification period ended June 30, 2024.

• The Biden administration is implementing the adjustment by September 1, 2024.

Implications for single mothers:

• Eligible borrowers don’t need to take any action. The process is automatic.

• Some may see a reduction in time to forgiveness or even immediate loan cancellation.

• Affected borrowers should monitor their Federal Student Aid account and loan servicer communications for updates.

Moving forward: Once the adjustment is applied, borrowers should reassess their loan repayment strategies based on any changes to their loan status.

While income-driven repayment plans and PSLF are common paths to forgiveness, single mothers should be aware of other federal programs that could lead to loan discharge in specific circumstances:

1. Borrower Defense to Repayment: This program offers full or partial discharge of federal loans for borrowers whose schools misled them or engaged in misconduct. The Borrower Defense to Repayment program has had many lawsuits that have affected its impact, but it has been used to wipe out millions of dollars of loans for students that attended schools like the Art Institutes, DeVry, ITT Tech and so on.

2. Teacher Loan Forgiveness Program: Designed for teachers who work full-time for five consecutive years in low-income schools. The Teacher Loan Forgiveness Program offers up to $17,500 in forgiveness for highly qualified math and science teachers in secondary schools, and up to $5,000 for other eligible teachers.

3. Total and Permanent Disability Discharge: This option is available if you become totally and permanently disabled. It applies to federal student loans, including Parent PLUS loans.

4. Closed School Discharge: This program forgives 100% of eligible federal student loans for borrowers whose schools closed while they were enrolled or shortly after withdrawal.

Federal loans offer various forgiveness programs, but private student loans have fewer options. Still, single mothers with private student loans should be aware of some potential paths to relief:

• Navient’s School Misconduct Discharge Program: Unique to Navient borrowers, this program offers forgiveness for those misled by their schools. Eligibility is based on school misconduct, not income or employment.

• Disability Discharge: Some private lenders offer loan discharge if you become permanently disabled. Eligibility and documentation requirements vary by lender.

• Lender-Specific Programs: A few private lenders offer their own forgiveness programs for specific circumstances. Check with your lender for any unique options.

• State-Based Relief Programs: Some states offer loan repayment assistance programs that may include private loans, often for specific professions like healthcare workers or teachers.

• Bankruptcy: While challenging, it’s possible to have private student loans discharged in bankruptcy. You must prove “undue hardship,” a high legal standard.

As a single mom, you need solutions that work now, not just long-term forgiveness options. Here are some strategies to help you manage your student loan payments alongside your other financial responsibilities:

1. Employer Repayment Programs: Some companies offer student loan repayment as an employee benefit. If you’re job hunting, prioritize employers that offer this perk. If you’re currently employed, check if your company has this benefit or consider asking HR to implement one.

2. Refinancing High-Interest Private Loans: If you have private loans with high interest rates, refinancing even a portion of your debt could lower your monthly payments. Remember, only refinance if you can get a lower interest rate. Be cautious about student loan refinancing advertisements promising lower interest rates for federal loans. Refinancing federal loans with a private lender will cost you access to student loan forgiveness programs only the federal government offers.

3. Deferment or Forbearance: For temporary financial hardships, you might qualify for deferment or forbearance on your federal loans. This can pause your payments for a short time, giving you breathing room to get back on your feet.

4. Budgeting Strategies: Use the 50/30/20 rule: 50% of your income for needs (including loan payments), 30% for wants, and 20% for savings. Also, consider meal planning and bulk cooking to save on food costs. Look for free or low-cost childcare options in your community.

5. Side Hustles: Consider flexible, work-from-home side jobs that you can do while the kids are asleep, like online tutoring, freelance writing, or virtual assistance.

6. Tax Benefits: The student loan interest deduction can lower your taxable income. Also, look into credits like the Earned Income Tax Credit and the Child Tax Credit, which could free up money for loan payments.

7. Local Assistance Programs: Many communities have programs to help single parents with various expenses. Check with your local social services office for resources that could indirectly help you manage loan payments by reducing other costs.

8. Financial Counseling: Many non-profit credit counseling agencies offer free or low-cost sessions. They can help you create a budget that balances loan payments with your other financial needs.

Unfortunately, there are no specific grant programs designed to pay off student loans for single mothers. Be wary of any websites or organizations claiming to offer such grants or financial assistance programs, as they may be scams. However, there are legitimate ways to reduce or eliminate your student loan debt, including:

• Income-driven repayment plans that can lower your monthly payments

• Forgiveness programs like Public Service Loan Forgiveness for those working in eligible public service jobs

• Loan discharge options in specific circumstances (like school closure or total and permanent disability)

• State-based loan repayment assistance programs, often for specific professions

While these aren’t grants, they can provide significant financial relief. Focus on exploring these legitimate options and be cautious of any offers that seem too good to be true.

As a single mom, managing student loans on top of your other responsibilities is tough. But there’s hope.

Federal programs like Income-Driven Repayment plans and Public Service Loan Forgiveness can offer significant relief, even if they’re not specifically for single parents. Recent changes have made these programs more accessible. For private loans, options are limited, but worth exploring with your lender.

Remember:

• Stay informed about program changes

• Meet all requirements consistently

• Don’t hesitate to seek expert advice

Ready to take control of your student loans? Book a 1:1 consultation with one of our student loan experts. Get personalized guidance on the best forgiveness options for your unique situation as a single mother.