Legal Ways to Eliminate Student Loan Debt: Strategies and Tips

Repaying debts can cause serious financial and mental issues to many. On average, 40 million candidates possess a loan in the U.S out of which 5.6 million carry a burden of $50,000 and above.

Above all, student loans have a separate category and its own terms to help during the repayment phase. With few loans, you have to just make regular monthly payments and clear them whereas, with student loans, you could qualify for federal programs which help you get rid of the loans. If you want to know How to Avoid Student Loans, apart from paying them normally, here are some best ways detailed to eliminate student loans both legally and quickly.

Enroll in an Income-Driven Repayment plan

Federal student loans are lent to students by the government with an interest rate and repayment term to help them manage their education expenses. After graduating, the repayment term starts after a certain grace period offered to settle at a job. While students who earn lower income and cannot afford to repay the monthly balance can apply for the Income-Driven Repayment-IDR. Under this plan, students are given the lowest payments to make which is 10% o the total monthly income gained. The payments you make will gradually increase as you gain higher income. By paying regularly till the repayment period is over, your loan balance is forgiven. Usually, the repayment period under this plan is about 20-25 years.

Also, the lesser payments you make, the more you pay towards the interest and not on the loan. The plan could also turn to be negative when you don't produce your income certification every year to recertify your financial status. Other repayment plans you could consider are Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR).

Aim for Public Service Loan Forgiveness

With a loan on current, if you are around the age of 20 to 25 you're late to consider the Public Service Loan Forgiveness. Under this program, students who are committed to working in the public sectors, government organizations, or non-profit organizations as a doctor, nurses, teachers, or armies are eligible for this program. Initially, you make regular payments and pursue your employment for a default period of 10 years. If you cannot afford to make the payments, you could also consider consolidating your loans and get lower monthly payments to make with an extended term such as 20-25 years, after serving for a certain period, you qualify for loan forgiveness where all your loan balance is forgiven and you won’t be taxed on the amount forgiven.

Apply for Disability Discharge

In certain cases, unfortunately, if you become disabled and cannot support yourself to pay the loans, then considering the Total and Permanent Disability discharge is the best option. Under this all loans don't qualify and also you are required to apply for discharge by producing the documentation to prove your disability. Additionally, after qualifying for this plan, you could get your loan wiped off and the government will also monitor your finance for about 3 years. Plus, if you don't meet the requirement during the monitoring period, the loans may get reinstated.

In certain conditions, if you die, your loan is discharged after producing the death certificate and if you have a parent PLUS loan and after the death of your parents, the loan gets discharged. For instance, you borrow a federal loan to become a Personal trainer. A personal trainer’s profession includes the roles such as instructing, monitoring, and assisting their clients' health personally. They demonstrate that exercise to maintain a healthy life study. You could also Become a Personal Trainer by learning simple steps, what are the degree level and concentrations for this profession. In some situations, you could get injuries or disabilities that prevent you from working further. At this time you can consider applying for disability discharge where your loan gets discharged.

Consider Loan Repayment Assistance Programs (LRAPs)

There are several programs curated for students to get rid of student loans. On the local level, it is collectively known as loan repayment assistance programs. Under this program, the borrower is required to give commitment and work at a high need area for a certain period of time which may be favorable to you such as an undesirable location and lower earning. Once our loan is forgiven, you might still be required to pay the tax accrued on the amount forgiven. But on the other side, the LRAP could give relief to students who have huge debts.

For instance, the National Institutes of Health offers a relief amount of $35,000 annually to healthcare professionals employed at the research departments.

Ask your employer

Suppose you don't qualify for any federal programs, you could pitch to your boss about the elimination of loans. In recent times, employers are giving assistance with loan repayment opportunities however does not include the tax incurred. When your employer helps you pay off student loans, it could be reported as a source of income to the IRS. Currently, there are about 4% of the organizations that assist employees with their loans and if your company isn't one of them, you could talk to your HR about it.

Serve your country

There are special programs for students who want to serve in the military in addition to loan forgiveness and repayment plans. Each branch such as Army, Navy, Air Force, National Guard, and Coast Guard has its own programs to assist the candidates. Air Force College Loan Repayment program and the Army Student Loan Repayment program with the perk of Loan forgiveness. If you're not serving in the military and volunteering your time with AmeriCorps or Peace Corps, could also give you the privilege of loan forgiveness.

File for Bankruptcy

Filing for Bankruptcy is impossible and difficult is considered as a myth and most students don't give try to file. Under this, the candidates have to prove that they cannot meet the standard of living and cannot afford to make minimum payments, and your conditions should represent that you've put sufficient effort to repay the loans. Hence, once you file for bankruptcy, your loan is automatically put as default.

Conclusion

Student loans play a major role in the growing financial crisis of graduates. Plan well before applying for the loan and learn about the terms and conditions listed while borrowing one. This could backfire on you during the repayment phase. We also advise you not to take a loan assuming that you could get rid of it and skip from making payments. However, with these options, you could choose to use them in the right way to get rid of student loans legally. The possibility of qualifying for loan forgiveness is uncertain hence, make regular payments for a period of 10 years and hope for the best!