Debts from student loans can be a headache when you’re unable to pay them. If you want to have part or all of your debt forgiven, you need to know how to apply for it correctly. The key to this process is understanding which documents you need and how to complete them properly. Knowing these simple steps will help ease the process and assist you in managing your debt.
Step 1. Understand Your Loans
Know whether your loans are federal or private. If they are federal, then you should proceed to the NSLDS, where you will find information regarding the type of loan, balance, and interest rate. Federal loans fall under government assistance plans that can help forgive some or all of the debt.
With private loans, you should contact your lender directly for information about your contract. Although repayment terms may not be as flexible as those for federal loans, you may have options for refinancing or consolidation.
Step 2. Evaluate Your Eligibility for Relief Programs
Once you know all the details of your loans, the next step is to see if you can get help from any programs. For federal loans, there are several options:
- Income-Based Repayment Plans: These plans reduce your monthly payments based on your income and the number of people in your household. This is a good option if your current payments are too high compared to your income.
- Public Service Loan Forgiveness (PSLF): This program forgives the remaining debt on your Direct Loans after you make 120 qualifying monthly payments and work full-time for a qualifying employer, usually in the public service industry.
- Teacher Loan Forgiveness: This program is for low-income teachers who may forgive some of their federal student debt.
To see if you qualify for these and other federal programs, visit the Federal Student Aid website. Each program has its requirements, such as income level or job type.
There are fewer assistance options for private loans, and they vary by lender. Contact your lender to learn about possible deferments, payment deferments, or refinancing options that may reduce your payments or ease your repayment terms.
Step 3. Gather Necessary Documentation
Once you have determined whether you qualify for loan forgiveness, you will need to prepare your documents. This will require:
- Proof of Income: This could be your most recent tax returns, pay stubs, or a confirmation from your employer. This will typically determine how much you will receive if you apply for an income-driven repayment plan.
- Proof of Employment: This document is mostly needed when applying for the Public Service Loan Forgiveness program. Your employer will need to verify your employment status and the nature of your business.
- Loan Statements: You will need to get your most recent statements for all your loans. This will give them your current balance and the type of loan you have. You can refer to this to confirm which debts you want to pay off.
- Identification Documents: A government-issued document such as a driver’s license or passport will identify you.
It is even better if all of your documents are digital. Most programs allow you to apply online. And preparing digital copies in advance will simplify all procedures and avoid delays.
Step 4. Contact Your Loan Servicer
Now that your paperwork is ready, it is time to call your servicer. This is the company to which you pay your loan payments and the individual with whom you will communicate regarding your student loan problems.
Here’s what you should do:
- Know your lender: If you need to know who your lender is, check your most recent statement or log in to your Federal Student Aid account if you have federal loans.
- Get ready with your questions: Before calling or writing, write down questions you would like to ask about the programs. These may include how to apply, deadlines, what happens once you have applied, and your payments afterward.
Write down dates of conversations, names of representatives you talked to, and any relevant advice or next steps you were advised to take. That way, you could always refer to it if you didn’t understand something later or if you can’t remember instructions about the next steps.
Step 5. Submit Your Application
Once you have all your documents and verified the information with your lender, you can apply for student debt relief. Here’s how to do it faster:
- Choose the Right Form: Make sure the application form matches your chosen program. Application forms vary. For example, an income-driven repayment plan adjusts your monthly payments based on your income. At the same time, a debt forgiveness program offers partial or full forgiveness of your debt after you meet certain conditions.
- Fill Out the Form Carefully: Complete each field of the application with your information. Make sure all information is accurate and complete. Errors or omissions may delay the processing of your application.
- Attach Documents: Include any documents required by the program with your application. This will help verify your eligibility and speed up the processing of your application.
- Submit Online or Mail: Many applications can be submitted through the lender’s website, which is usually quicker. If you’re mailing, make sure your address is correct and consider tracking so you’ll know when your application is received.
- Retain Copies: Save your completed application and all correspondence. This is important in case you need to review what you sent or if you have questions later.
Step 6. Continue Communication
Once you’ve applied for student loan forgiveness, contact your lender. Here’s how:
Watch for new opportunities: Learn about new assistance programs or changes to existing ones. Laws and programs can change, opening up new opportunities for assistance.
Check Your Email: Regularly review your email for messages from your lender. They may request additional documents or ask you to update your application.
Respond promptly: If your lender asks for additional information, respond immediately. A late message can slow down the processing of your application.
Check your account: Log in to your account online and check the status of your application regularly. This will help you know how the process is going.
Watch for updates: If you don’t receive a response within the specified time frame, contact your lender. Call or write to find out if your application is still in order.