Every consolidation that we process will be under the William D. Ford Federal Direct Program, also known as the Obama Student Loan Forgiveness program. This program has loan forgiveness built in to the end of your payment terms. When you have made your payments for the allotted time, any unpaid balance will be forgiven by the Department of Education. There are many different repayment options associated with the Obama Student Loan consolidation program.
If you make 120 qualifying payments while working full-time in certain public service positions, the remaining balance on your Direct Loans may be forgiven. FFEL Loans or Perkins Loans will not qualify for Public Service Loan Forgiveness.
If you consolidate your FFEL or Perkins loans into a Direct Consolidation Loan, those loans could then become eligible for forgiveness. Just remember, any payments you made on your loans before they were consolidated will not count towards loan forgiveness. And anytime you consolidate a loan you could lose any benefits attached to that original loan, so be sure to evaluate your loan terms before deciding to consolidate.
In order to receive loan forgiveness, you must be enrolled in a qualifying repayment plan:
While Standard Repayment is an eligible repayment plan for Public Service Loan Forgiveness, if you make all of your monthly payments for 10 years under Standard Repayment, there will be no balance remaining to forgive. If you are enrolled on a plan that lowers your payments based on your income, you will likely still have a balance to forgive after 10 years.
Examples of public service employment include working for:
Because the program was introduced in 2007, only payments made towards your loans after October 1, 2007 will count towards loan forgiveness. The first borrowers will not be able to apply for loan forgiveness until October 2017.
You may also Contact Us and speak to one of our Student Loan Specialists if you would like to get one-on-one, personalized advice on how to qualify and apply for any of these assistance programs.
The Teacher Loan Forgiveness program is the most beneficial to teachers, as it allows for early forgiveness as well as the principle reduction. Teachers might be eligible for $5,000 to $17,500 in principle reduction under certain circumstances. The main reason for the principle reduction, is to get people to go into the field of teaching, as well as to stay in the teaching field. Teachers qualify for complete loan forgiveness after 10 years of payments and service as a teacher. For more information please Contact Us.
If you are unable to work because of a physical or mental impairment, you might qualify for a discharge of your Federal Student Loan balance. For more information please Contact Us.
At Financial Preparation Services, our goal is to help educate individuals about all repayment options available that loan servicers do not inform them of. When it comes to student loans, there’s no “right way” to repay. Depending on your personal and financial situation, you can choose from any number of options and plans. Whether you’re just starting to think about the route you’ll take, or you’ve lost your way and need to get caught up on some missed payments, Financial Preparation Services can help you map out a path that works for you.