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Student Loan Forgiveness Programs That May Help Reset Your Finances

Our dedicated Tucson bankruptcy attorney, Eric Ollason, knows that one of the most overwhelming types of debt in the U.S. is the student loan. Unfortunately, they are also the lifeblood of higher education opportunities that can help launch careers.

While education and student loans are inextricably linked, the outcome can be more than most students bargained for. The latest student loan debt statistics for 2022 show that there are 45 million borrowers who collectively owe approximately $1.7 trillion in student loan debt.

As legislators, families, and students all seek solutions to disproportionate repayment terms on massive principal balances and skyrocketing interest rates, our Arizona bankruptcy attorney presents five potential loan forgiveness programs that can offer relief to those who qualify.

Public Service Loan Forgiveness (PSLF)

The Public Student Loan Forgiveness program forgives part of the student loan debt for individuals who work in public service professions.

To qualify for PSLF, you must be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization and work full-time for that agency or organization. You must have Direct Loans or consolidate other federal student loans into a Direct Loan), repay your loans under an income-based repayment plan, and make 120 qualifying payments.

Income-Based Repayment Forgiveness (IBR)

Income-driven student loan repayment plans differ from traditional student loan forgiveness programs.

Instead, they are designed to reset monthly student loan payments at an amount that is intended to be affordable based on the payer’s income and family size. Borrowers must reapply for the program each year and show proof of financial hardship to qualify.

Pay As You Earn Forgiveness (PAYE)

The Pay As You Earn program allows loan payments to be capped at 10% of the borrower’s discretionary income. Like income-driven repayment forgiveness, borrowers must show proof of financial hardship and reapply each year. Once the borrower makes payments for 20 years, the balance of the debt will be considered for complete forgiveness.

Revised Pay As You Earn Forgiveness (RePAYE)

The Revised Pay As You Earn program is available to anyone with qualifying federal student loan debt. The repayment amount is capped at 10% of the borrower’s discretionary income and must be reapplied for each year to remain enrolled. This program forgives the balance on undergraduate student loans after 20 years of payments, and graduate school student loans after 25 years of regular payments.

Federal Perkins Loan Cancellation & Discharge

The Federal Perkins Loan Cancellation & Discharge program is designed for certain professions, and requires borrowers to prove that they used the student loan to cover their education costs in certain fields.

Individuals who might qualify for this program include:

  • Certain Military Members
  • Education Professionals
  • Firefighters
  • Librarians
  • Nurses
  • Police Officers
  • Public Defenders
  • Service Volunteers
  • Teachers

The federal Perkins loan cancellation reduces the borrower’s student loan debt for each year they work in a qualifying profession and may forgive the entire loan if they remain in that profession permanently.

Our Tucson bankruptcy attorney knows that when our Arizona residents have excessive student loan repayment amounts, it can make it increasingly difficult to make regular mortgage payments, credit card minimums, and even insurance premiums they need to thrive physically and emotionally.

If you have questions about debt relief, and how your student loans may meet the necessary bankruptcy requirements, we can help.

Contact Our Skilled Arizona Bankruptcy Attorney Today to Schedule a Free Assessment

Contact our experienced bankruptcy attorney in Pima County, Eric Ollason, to learn more about your legal rights and options to start fresh by calling (520) 791-2707 to schedule a free consultation today.

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