Your loans should automatically qualify for forgiveness after you've spent 20 or 25 years in repayment. Reach out to your loan servicer about any steps you may need to take.
The Biden-Harris Administration announced today the approval of $4.9 billion in additional student loan debt relief for 73,600 borrowers. These discharges are the result of fixes made by the Administration to income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF).
You're not eligible for federal student loan forgiveness programs if you have private loans, but there are other strategies for managing private loan debt.
There are a few reasons your account may unexpectedly list a balance of zero: You got a new loan servicer. It's common for loan servicers to change, so your account may be zero with your old servicer if your loan amount was transferred to another servicer.
The Bottom Line. Although loan forgiveness can impact a credit score, the effect is often temporary. And for borrowers with federal student loans in default, the Fresh Start program could give them a clean slate, removing the default from their credit reports.
Borrowers who have reached 20 or 25 years (240 or 300 months) worth of payments for IDR forgiveness may see their loans forgiven in Spring 2023. ED will continue to discharge loans as borrowers reach the required number of months for forgiveness. All other borrowers will see their loan accounts updated in 2024.
In most cases, the borrower no longer had any outstanding student loan reported on their credit record in February 2023, suggesting the loan may have been paid off, discharged, or aged off the borrower's credit record.
Paid in full – the loans were recently consolidated or were commercially held Federal Family Education Loans that defaulted and were sold to the guaranty agency that owns the debt. Closed – the loans were sent to a new servicer. *
Through the Mobile App
The lender's mobile app enables you to easily check your details and loan balance anytime. Simply download the mobile banking application on your smartphone and register with the mobile number linked to your loan account.
Specifically, new Consolidation loans may have their payment counts temporarily set to 0 while the payment count update is processing. We appreciate your patience while we work to accurately update your payment counts. Please log in to mohela.com to manage your loans and check out your PSLF tracker information.
Most of the qualified borrowers will be on Income-Contingent Repayment (ICR) plans. There's no action required for borrowers — the best way to find out if you qualify is to wait for the government to email you.
To Apply: Contact the school that made the loan or the school's Perkins Loan servicer. See “If You're a Federal Perkins Loan Borrower” below for more information about other ways you can be eligible for Perkins Loan cancellation and discharge.
Stafford Loans qualify for PSLF, but not automatically. They must be consolidated into a Direct Loan before being eligible for forgiveness.
The remaining unpaid balance of loans is forgiven after 25 years. Income-Based Repayment (IBR)—Depending on when you first took out loans (before or on or after July 1, 2014), payments are generally 10% or 15% of the borrower's discretionary income, but never more than the 10-year Standard repayment plan amount.
The PSLF application process can take a few months. It may take longer if you haven't been submitting regular PSLF Forms, or shorter. During the wait, you have the option of continuing to make payments or putting your loans into forbearance.
Having a student loan will affect your credit score. Your student loan amount and payment history are a part of your credit report. Your credit reports—which impact your credit score—will contain information about your student loans, including: Amount that you owe on your loans.
At StudentAid.gov, you can find: Your student loan amounts and balances. Your loan servicer(s) and their contact information. Your interest rates.
A person can check the loan status by calling the customer care numbers for any financial queries including Personal loan. You can also directly go to the branch you apply at to meet the officer in charge to know the status of your personal loan application.
Login to the FedMobile app, tap on 'Loans' at the bottom bar of the Home screen and go to 'My Loans' tab. Tap on particular loan to view the details.
You will need enough income to cover a higher monthly payment, which could delay saving for other goals. Furthermore, paying too much toward your student loan could cause you to fall short on essential bills like rent or a car loan. Defaulting on any loan could result in long-term effects on your credit score.
Through June 2024, ED will continue to identify and notify borrowers who reach the necessary forgiveness threshold of 240 or 300 months' worth of qualifying payments. Nelnet will notify you directly after your forgiveness is processed. Make sure your contact information is up to date on Nelnet.com and StudentAid.gov.
Typically, such closures occur when the loan is shifted to a new lender or servicer, as in the recent case where Great Lakes transferred loans to Nelnet. This resulted in borrowers receiving notifications from services like Credit Karma about the closure of their USDOE/GLESI account.
The administration announced its latest round of cancellations on Jan. 19, forgiving about $4.9 billion in loans for roughly 74,000 borrowers. Since taking office in 2021, the Biden administration has arranged to cancel loans equal to around a third of the total projected cost of its blocked mass cancellation plan.
In August, the Biden-Harris Administration announced its plan to cancel up to $20,000 in student debt for eligible borrowers to give working and middle-class families more breathing room as they recover from the pandemic.
Collection activities are currently paused for all federal student loans through September 2024, which should protect your 2022 and 2023 federal and state tax refunds.