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Loan Forgiveness?

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Valued Member

Loan Forgiveness?

Hi I have about 48k in student loans (interest has been a killer) I have both unsubsidized and subsidized federal loans only. I have recently went back to school after a 11 year hiatus. I did default in the past, but I worked to get them in good standing. They are affecting my ability to build my credit at the moment. I will be receiving my Associate's in December and ( if I don't hit my loan limit or if I can obtain scholarships) I will be going on to complete my Bachelor's in the Spring. My expected graduation date is Spring 2020. I have been working at a school, but I don't plan to stay here. My income is under $30k. Someone one of the other forums guides me here. Any advice is welcome.
Valued Contributor

Re: Loan Forgiveness?

You cant get rid of SL debt 99% of the time unless you pay it.

Your payment can be based on your income.

In some cases, your min payment may be $0 if income is low enough.


Open 2 secured credit cards with Discover and Cap One and wait 13 months to apply for anything else.  After 13 months, apply for Discover and Cap One.


Check Merrick Bank for prequal each month in the mean time.



Rebuild started in 2014  -  $100k total unsecured credit in 2017  -  $250k+ total unsecured credit in 2019.


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Message 2 of 5
Established Contributor

Re: Loan Forgiveness?

Income-driven repayment plans lead to forgiveness in 20 years (25 for ICR and graduate loans). If you qualify for the public service forgiveness, PSLF (which still needs to be on an Income-driven repayment plan to count), in only 10 years. If you work at the school it might already qualify. Do you plan on working in public service after graduation?
Usually, while you're in school at least half time the school will report that. Your loans will automatically go into in-school deferment and interest accrual will pause on subsdized federal loans only. However, most students don't make that much money. Imo out is better to start getting those payments for loan forgiveness if that's your interest.
In order to do this you will need to ask your servicer for an in-school deferment waiver. No need to back date it, though I did because I'd already been making payments and I wanted then to count. You can cancel the waiver only once every so imo better to waive the deferment a year at a time or something if you're not sure. Not you can sign up for an Income-driven repayment plan.
Each plan is a bit different. The easiest thing is to go to the studentloans gov website and go to the repayment estimater log in and it will plug in your loan data for you. The numbers are just estimates; none have usually been lower. Ignore the payments it estimates at the end if your loan; it takes into account that you will get annual raises at your job. Must people pick REPAY or Income-based repayment (IBR).
There are two fastest ways to fill out the IDR plan application: online and by uploading it. Online it links to the IRS site and uses your income data from last year. It's very quick and easy to use. If your income is lower since then or your pay varies fill out the PDF application (usually they require you to scan a real signature on the last page), and uploaded the income verification such as a recent paystub. You'll upload the paperwork to your loan servicer and submit.
When you fill out your IDR it will ask you what plan you want. If you bubble to let them choose the lowest one, imo they usually don't do it, so it's best to do the math yourself.
After they process your application, they'll give you your monthly payments for the next year. You have to pay them on time to count for forgiveness and paying extra or early won't help. It's best to mark your calendar a few months early because they have a tendency to wait until the last minute to send you the recertification reminder. If your income lowers at any time during the year, recertify early and you'll get an even lower payment, good for a new year.
If you plan on paying off your entire loan in standard repayment, this may not be a good option because you do lose out on the in-school deferment of interest (subsidized interest only). However, REPAY does pay all your interest for the first 3 years and half thereafter for subsidized loan. I think it actually pays something on unsubsidized loans too, so it could still be worth it. Payments can be as low as $0.
Hope this helps and good luck with your studies. If you have any more questions, let me know.

Message 3 of 5
Valued Member

Re: Loan Forgiveness?

Thank you for your thorough reply. I haven't made up my mind yet. I am about to get my AA in December. Although my income is low I guess I'm just worried they may try to make me pay more. I really can't afford to pay anything at this time. Once I have that secured I will make up my mind. My anticipated graduation date for my BA is Spring 2020. Thanks for all the information.
Message 4 of 5
Established Contributor

Re: Loan Forgiveness?

For REPAYE, it's 10% of: your disposable income (from your tax form) minus 150% the federal poverty level.
This is actually less than most people expect to pay. I would check out the payment estimator (mine always shows a bit higher than it actually is). You might find you're low income enough to be $0 payments.

Message 5 of 5