In 2019, more than 44 million people in the United States carry student loan debt, for a total of $1.51 trillion.
The rise in college tuition has outstripped both wages and inflation, while a degree has become a more and more important component of any resume.
A college education is supposed to make you a more valuable member of the workforce, which is supposed to be reflected in your income. But having gone to college is no longer a guarantee of a job that pays well — starkly demonstrated by the sheer number of Uber drivers and baristas with advanced degrees.
Now that we’ve bummed you out, allow us to offer some hope.
First, many people think that the education system in the United States is due for an overhaul, and the attitude toward higher education is becoming a lot more nuanced.
Second, there are some student debt relief options available right now: student loan forgiveness, cancellation and discharge.
These options, though, are only available for people with federal student loans. A private loan from your university, bank or another source will work differently.
Forgiveness and cancellation
Student loan forgiveness or cancellation means that you’re excused from repaying some portion of your loans because of your job.
For instance, to qualify for the Public Service Loan Forgiveness program, you must be employed full time at a government organization or certain types of nonprofits and make 120 qualifying payments toward your student loan during your employment.
You’ll be offered several different repayment plans, and you can decide which works best for you. The amount and frequency of these payments depend on your income and the size of your loan.
The Teacher Loan Forgiveness Program is very similar. If you are a full-time teacher at a low-income school, you can have up to $17,500 of your student loan forgiven. There are other such programs for other professionals, including nurses, members of the armed forces and certain lawyers.
People who have applied for and received a federal Perkins loan, which could include teachers, firefighters, nurses, volunteers, and others, might be eligible to get their entire Perkins loan cancelled if they work for at least one year for a qualifying employer — generally one located in a high-risk or high-need region.
You can also qualify for loan forgiveness or cancellation if you’re a member of the Peace Corps, AmeriCorps or another such organization with a focus on volunteer work.
Discharge
Student loan discharge is considerably more specific in how it works.
A student loan is discharged upon the student’s death (so such debt won’t burden your loved ones) or if the student becomes permanently disabled and unable to work to repay the loan.
Loans can also be discharged if the student is unable to finish their education because the institution you attended closes.
Other circumstances
These scenarios are a lot less likely than the above, but they are worth mentioning:
- Bankruptcy discharges are very rare but possible.
- Proven wrongdoing on the part of the school — if it misled you or failed to provide what it claimed it would — might entitle you to a full discharge of your loan.
The bottom line
If you think you might be eligible for any of the above student loan forgiveness or cancellation programs or discharge circumstances, get in touch with your loan servicer to explore your options.
If your application for any of these programs is denied, you are still required to complete payments on your loan — even if you’re dissatisfied with the quality of education you received or if your prospects fail to meet your expectations.
Most of us face some amount of student debt after we graduate. For some, these steps could help you work your way through it.
