Due to the present COVID – 19 pandemic and lower employment rates in the USA, people have been heavily affected financially. Making monthly payments to repay one student loan is another struggle out of many more. This article discusses how to Get Student Loan Relief in the US During COVID-19. These graduates can ask for a student loan relief if they are eligible. Valid proof of not having the ability to repay the student loan in time is required for the application process to be successful.
There are some special programs, which deal with such situations and guide you through the student loan relief procedures. Having a government or non – profit organization job can also give you the upper hand here.
With the Covid -19 pandemic and its impact in the USA, many are trying to reduce their expenses to survive. People are trying to maintain lower rents, lessen food supply, and avoid bills that may seem unnecessary during this pandemic. However, people who are carrying the burden of a student loan may find it more difficult as they have to pay a monthly fee according to their repayment plan. They must find out How to Get Student Loan Relief in the US During COVID-19. This article talks about some useful ways of relieving a student loan.
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What is student loan relief?
Student loan relief frees your obligation to pay back the debt used to cover your tuition fees. It does indeed seem like a perfect scenario but the truth is that a small number of people are eligible to apply for such requests. Meeting the criteria and requirements is various depending on the person’s circumstances. In some cases a partial amount of the debt is relieved.
Discharging Student Loans
Only under the condition that the borrower has no control over the events that directly influence his/her ability to repay the debt, a student loan relieved completely or partially.
Some examples of such situations include:
- Permanent disability of the borrower
- Closure of the school during the time of study
- Borrower severely affected by a pandemic
- Falsification of the loan qualifications by the school
- Death of the borrower
Earning Student Loan Forgiveness
There are two main possible ways to earn a student loan forgiveness. Both ways require you to follow some conditions and meet the criteria.
- Working in Public Service
- Working in a government or non – profit organization. Volunteer work, military service, medical practice,
- By making payments through an income-contingent payment plan for a long period.
New regulations after the pandemic in the USA
Due to the current economic and financial impact of the Covid-19 pandemic, some regulations were established regarding student loans. However, they are for federal student loan borrowers. Private lenders are a different case. These regulations are from the government to federal student loan borrowers.
The regulations standing are:
- Paused Payments
Pause payments for federal student loan borrowers who have Direct Loans and Federal Family Education Loan, which means these borrowers will not be required to make any payments toward outstanding interest or principal balance.
- Suspension of interest
Suspend interest accumulations for such loans so that these balances don’t accumulate.
- No court orders
No offers for forced collections such as
- Garnishment of wages
- Tax refunds
- Social Security benefits.
- Halt negative credit reporting.
Negative credit reporting will be on hold until further notice.
- Continual credit receive
Ensure a borrower continues to receive credit toward Public Service Loan Forgiveness, Income-Driven Repayment forgiveness, and loan rehabilitation.
- You won’t be charged any late fees.
If you want to keep making full or partial payments during this time, you can.
These regulations may not remain for a long time but with the high unemployment rates and increasing Covid – 19 cases, the duration of the applied regulations may be extended.
How to Get Student Loan Relief in the US During COVID-19
There are several ways to get student loan relief. Your circumstances could be a disadvantage if you have a government job.
Here are the different Loan reliefs you can apply for if eligible.
Teacher Loan Forgiveness
Teaching full time for five or more than five consecutive academic years in an educational institute that is for low – income families gives you the benefit of this loan relief. If you are a full–time teacher and meet some other qualifications you may be able to redeem a teacher loan forgiveness.
What are the eligibility requirements?
- The borrower doesn’t have an outstanding balance on direct loans or Federal family education loans.
- The borrower must have an employment contract which accepted the borrower as a full – time, a highly qualified teacher for five complete years.
- The borrower must have been employed at an elementary school, secondary school, or educational service agency that serves low-income students
- The loan for which you are seeking forgiveness must have been made before the end of your five academic years of qualifying teaching service.
How much loan forgiveness can I receive?
The maximum forgiveness amount can range from $17, 500 to $5,000.
It will mainly depend on the subject taught. You get a higher amount of loan forgiveness if you teach subjects like science, math, and English.
Public Service Loan Forgiveness
Employment in a government or non-profit organization can be an advantage when applying for loan relief. The public service loan forgiveness program may be able to help you.
PSLF approves of applicants who are:
- Government organizations at any level (U.S. federal, state, local, or tribal)
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
Closed School Discharge
If the education Institute closes when you are already enrolled as a student you are eligible to discharge your student loan.
You can apply for this loan discharge if
- You were enrolled when your school closed
- You were on an approved leave of absence when your school closed; or
- Your school closed within 120 days after you withdrew.
Discharge in Bankruptcy
In cases of bankruptcy, you can request to discharge your federal student loan. This is a rare circumstance hence the process is not automatic.
Here are some requirements that are needed to have a successful application.
- If you are forced to repay the loan, you would not be able to maintain a minimal standard of living.
- There is evidence that this hardship will continue for a significant portion of the loan repayment period.
- You made good faith efforts to repay the loan before filing bankruptcy.
If you are not eligible for either of these loans you can request to make changes to your repayment plan. You can ask them to:
- Lower the monthly payments
- Pause the repayment plan for some time
Approved or Declined
If your application was approved you will be no longer responsible to make the payments. However, if only a partial amount of your loan was relieved you will have to pay the remaining amount.
Denied application for the student loan means you will have to continue to make payments monthly according to your repayment plans unless you make changes to your repayment plan.
To conclude there are several ways to Get Student Loan Relief in the US During COVID-19. If the student loan is a federal student loan there is a greater chance of discharging the loan, however, for private loans matters are a bit more complicated as it will depend on the lender.
In the USA you will find ways to reduce your loan partially or reduce the monthly payments instead. If you are still not eligible changing the repayment plan can be of great help too. It is important to remember that the contract signed between the borrower and lender obligates you to repay the full amount and take responsibility.