Student loan debt has become a national catastrophe in the United States. As of the fourth quarter in 2016, student loan debt reached $1.31 trillion dollars and 11.2% of borrowers fell behind on their monthly payments. Student loan debt is second, only to mortgage debt in the nation. Before diving headfirst into the step-by-step instructions on how to improve the probability to be eligible for student loan forgiveness, let’s take a closer look at how student loan debt can get out of control in the first place.
The fact is, students are accumulating debt while furthering their education to better themselves, but yet they don’t get educated on debt & or the consequences that comes with it…the repercussions from overbearing debt can be disastrous.
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The likelihood of this happening is increasing with the lack of proper education regarding this very subject; too many graduates are finding themselves with insurmountable debt & then realizing…”If I only knew”. The odds of this happening can be greatly reduced by first properly assessing the situation and pitfalls to avoid.
Here are 3 Pitfalls to Avoid:
Firstly; when preparing for college, it’s imperative to incorporate all your projected expenses into the equation. Don’t forget to include the cost of tuition, books, supplies, housing, food, living expenses, automobile costs, and even entertainment into the equation.
Students often overlook the “true cost” of college life and don’t accurately plan for the worst-case scenario, including: what if you don’t get that dream job, unexpected medical expenses occur or you’re unable to complete your courses – debt can accumulate quickly if not correctly accounted for. Additionally, it’s highly likely that you’ll change majors mid-stream and you may incur additional tuition and other costs.
Secondly; another trap that students repeatedly fall into is credit card debt.
Students are lured into the banks offer of “free money” with a guaranteed credit card and are quick to charge school supplies on their new line of credit. Neglecting to pay the balance “in full” when the bill arrives leads to another new life event: “unmanageable debt.”
For example; if you make only the minimum payment on $10,000 of credit card debt, each month, at a 20% interest rate – you would end up paying $6,617 in interest by the time the debt is paid off. So, that $10,000 cost you $16,617.
Thirdly; lack of education can lead to student loan debt problems.
For example; a student falls behind on their federal student loan payments and then consolidates. Right after they submit their consolidation paperwork they receive a letter revealing their wages are being garnished and the consolidation is rejected.
Why did that happen?
It happened because they didn’t know to request 90-days forbearance before starting the consolidation process – lack of education.
Inside this infographic, everything that you need to know is illustrated in an easy-to-read format.
Without further delay, here are the step-by-step instructions on how to get student loan debt forgiveness.
Infographic source: Golden Financial Services
Government student loan consolidation, income-driven repayment income based repayment plans and obtaining student loan forgiveness, can all be complicated, confusing and time-consuming. You’d probably rather deal with the IRS!
Even after you finally get your student loan consolidation and income-driven repayment plan approved, now you must get recertified every year for the next 10-25 years.
If you forget to recertify on time on any given year, you can immediately be eliminated from the income-driven repayment plan and back to square one – with an unaffordable monthly payment.
You can also get ejected from an income-driven repayment plan if you are even one month late on recertifying.
Public Service Loan Forgiveness (PSLF) Program
If you work in a public service job, such as a police officer or teacher, you can be eligible for student loan forgiveness within ten years, through the Public Service Loan Forgiveness Program. Additionally, anyone working for a Non-Profit or Not-for-profit organization can qualify for Loan Forgiveness within 10 years, rather than the standard 20-25 years.
However, you must fill out the initial Public Service Loan Forgiveness Employment Certification form before your payments can be attributed towards your loan forgiveness eligibility and after your final payment is made after the ten-year mark -- to prove that you’ve been working for a public service job for the past ten years.
Students’ often make the big mistake of not filling out the PSLF Employment Certification form after consolidating their loans, and eventually will find out – they’re NOT eligible at the ten-year mark for loan forgiveness. So hopefully if that’s you – you know what to do right about now!
This all may seem very confusing, which is why we created this simple infographic that provides you step-by-step instructions.
Wesley Hendrickson, who is AFSLR (Association for Student Loan Relief) Certified and the Manager at Golden Financial Services, recommends that; “if you work in a public service job, fill out the PSLF form and submit it every year to your loan servicer to be 100% positive that your loan forgiveness is approved at the ten-year mark.”
Federal Student Aid, Studentloans.gov, 11/08/2017
Golden Financial Services, https://goldenfs.org, 11/08/2017
Any student can qualify for student loan forgiveness. If you work in a public service job you can have your loan balance forgiven in a shorter time-frame, but anyone can get student loan forgiveness no matter what type of job they have.
After consolidating – you then need to get on the right repayment plan that offers the greatest forgiveness at the end. Your goal should be to get on the repayment plan that offers you the lowest monthly payment and the highest amount of loan forgiveness.
Student Loan Forgiveness Public Service
If you work over 30 hours per week in a “public service job”, such as teachers do or for a Non-Profit organization – you can have your loan balance forgiven after only 120 qualified payments.
Your first step is to consolidate your federal student loans into one student loan. (again, go to StudentLoans.gov and click on the tab labeled “Repayment & Consolidation”)
Get approved for a repayment plan that fits your budget. Try the Repayment Estimator
Fill-out & submit the Public Service Loan Forgiveness Employment Certification (PSLF) form every year for the next ten years – guaranteeing you get loan forgiveness after only 120 payments.
What Jobs Qualify As A Public Service Job?
Public service jobs include:
Workng for the government at a state, local or federal level.
Working for a 501©(3) non-profit company, i.e., AmeriCorps or Peace Corps Volunteer.
Don't Be Late
If you are behind on your monthly payments – take immediate action towards resolving your student loans.
Request 90 days’ forbearance from your student loan servicers – giving you enough time to consolidate.
Consolidate your federal student loans by going to StudentLoans.Gov.
Choose a repayment plan that offers you the lowest monthly payment and the most student loan forgiveness.
If you’ve enjoyed today’s post, check out this next infographic on “Hacking Your Student Loans to Minimize Your Student Loan Debt”.
Student Loans Gov
Golden Financial Services
Paul J Paquin is the CEO at Golden Financial Services and the author of the book called; “A Complete Debt Consolidation Guide to Become Debt-free”. Paul spent the last 15-years engulfed in debt consolidation, as the CEO at Golden Financial Services, learning about the most effective debt relief options by researching and testing different methods.