Student Loan Forgiveness

If you have federal student loans, you may be eligible for student loan forgiveness; however, this forgiveness is not automatic. A student loan forgiveness lawyer can ensure that you meet the requirements for loan forgiveness. Unfortunately, it’s possible to get years into your student loan repayment plan only to find out that you are not eligible for forgiveness or that your payments wouldn’t apply toward forgiveness.

As such, it is important to talk to an experience student loan forgiveness lawyer that is familiar with the requirements of these loan forgiveness programs. At ARM Lawyers, our experienced student loan forgiveness lawyer can ensure your compliance with the requirements of each program and help you avoid any possible missteps along the process.

What is public service loan forgiveness?

The main loan forgiveness program that gets the most notoriety is public service loan forgiveness. Public service loan forgiveness is not defined as a program you enroll in; rather, it is a redemption plan in which you redeem the forgiveness once you have reached the required 120 qualifying payment months. There is no limit on how much student loan debt can be forgiven. Public Service Loan Forgiveness has three requirements to make the payments “qualifying”:

  • The right kind of employer
  • The right kind of loan
  • Actively paying

Many people seeking public service loan forgiveness struggle to meet all of the requirements of each part of the program. At ARM Lawyers, our student loan forgiveness lawyers have work with many people to ensure that their student loans, employer and payments all meet the necessary requirements and put them on the right track toward forgiveness.

Let’s review each of these requirements in more detail below.

Image: Student Loan Forgiveness Lawyer explains requirements for public service loan forgiveness.

What kind of employer qualifies for public service loan forgiveness?

Generally, this includes government entities, nonprofit 501(c)(3) entities, and other not-for-profit organizations providing qualifying public services. It is important that you make sure your employer meets this requirement or you will not receive credit for your payments while working there, so do not be afraid to ask.

Additionally, you must be a full-time W-2 employee. There are some exceptions that can help meet this requirement, which our student loan forgiveness lawyer can further discuss with you.

If you’d like to ensure that your employer will qualify for public service loan forgiveness, call us, and we can review everything with you.

What kind of student loans qualify for public service loan forgiveness?

The federal student loan must be a Direct loan from the Department of Education. If you do not have a Direct loan, you can consolidate your loan(s) into a Direct loan so that you can participate in this loan forgiveness program.

This is extremely important because if you are making payments on non-qualifying loans, they will not count toward your 120 payments. As a result, it’s never too soon to speak with a student loan forgiveness lawyer. We counsel students as they graduate to make sure that they meet the requirements for forgiveness – including the correct type of loan.

What what are the payment requirements for public service loan forgiveness?

You must be actively paying on your student loans under either an income-driven repayment plan or a 10-year standard repayment plan. You are permitted to switch between income-driven repayment plans; however, you should consult a student loan forgiveness lawyer to make sure that you do not lose any qualifying time.

Additionally, consolidating your student loans is the one way that will reset the clock and start everything over; however, if you do not currently have a Direct loan, this may be necessary to start the process. That is why it’s never too soon to contact a student loan forgiveness lawyer – even if you’ve only recently graduated.

Is public service loan forgiveness taxable?

Both public service loan forgiveness and teacher loan forgiveness are tax free forgiveness programs. For public service loan forgiveness, when you get through your 120 qualifying payment months, you submit the necessary paperwork and you are granted forgiveness. If you paid months 121 and 122, you would receive those payments back upon acceptance of your forgiveness.

Does public service loan forgiveness actually work?

There are several news articles and other reports out there talking about how low the success rate of public service loan forgiveness is. Many of these reports fail to take into account the fact that this program was enacted in 2007, only payments since October of 2007 count toward the program, and it takes 120 qualifying payment months (or 10 years). Therefore, we are just now starting to see people with the required amount of qualifying payments for public service loan forgiveness.

We fully expect the success rate numbers to be much higher in the coming years. Another way to raise the success rate is to make sure that you are working with a student loan forgiveness lawyer that can guide you through the process and set you up for success. The easiest and best place to start is to call us or e-mail us to speak with our top student loan forgiveness lawyers.

What is teacher loan forgiveness?

Teacher loan forgiveness is another type of forgiveness program that can be a great way of discharging part of your student loan debt. This forgiveness is only available to individuals who started taking loans after October 1, 1998. It is likewise only available to individuals with Direct loans or FFEL loans.

The requirement for teacher loan forgiveness is teaching for 5 consecutive years in a qualifying school district. Generally, most rural and urban school districts and some suburban school districts will be qualifying school districts. However, a good rule of thumb is to ask the principal of any school if the school district will qualify.

The main downside is that unlike public service loan forgiveness, teacher loan forgiveness has limits on the amount of your student loan debt that can be forgiven. If you teach science or math in high school, you can get up to $17,500 forgiven. Likewise, if you teach special education at any level, you can get up to $17,500 forgiven. If you teach anything else, the maximum amount you can have forgiven is $5,000.

It is important to note that you cannot double dip with both of these loan forgiveness programs. This means if you take the $17,500 in forgiveness from teacher loan forgiveness, you can’t also use those 5 years toward public service loan forgiveness. This is something you need to consider carefully because it may be more beneficial to put in the full 10 years and have the remaining balance of your loan forgiven under public service loan forgiveness.

Our experienced student loan forgiveness lawyer can help you determine which method is best for your situation.

What is income-driven repayment forgiveness?

If you are not a teacher and do not work in public service, you may still be eligible for student loan forgiveness if you are in an income-driven repayment plan. Depending upon the type of federal student loan repayment plan you are in, your loans may be forgiven after 20 or 25 years of qualifying payments.

If you are unsure of whether your loan qualifies for income-driven repayment forgiveness or are unsure of the type of income-driven repayment plan you’re in, our student loan forgiveness lawyer can review this with you.

Is student loan forgiveness taxable?

Unfortunately, unlike the public service forgiveness, income-driven repayment forgiveness is potentially taxable. We say potentially because there are exceptions to the rule. If this is a concern for you, our student loan forgiveness lawyer along with our tax lawyers can advise you on ways to address this. Depending on your situation, you may owe no tax at all. In other situations, we can reduce the tax owed.

Regardless, the amount you would pay in taxes on the forgiven balance will be substantially less than the remaining balance. At ARM Lawyers, our top student loan attorneys will help you find the best plan for you to maximize your savings and plan for future loan forgiveness.

Contact a student loan forgiveness lawyer today

Loan forgiveness is a great option for those individuals who can meet the requirements. Unfortunately, many people make mistakes in meeting the requirements and there is no going back and changing who you worked for or the hours you worked. Therefore, it is essential that you start out in compliance.

The federal government is not keeping track of whether or not you are on the right track for loan forgiveness, so you need someone that is looking out for your best interests. Our student loan forgiveness lawyer can skillfully guide you through the process and ensure that you are on the right path toward forgiveness.