FAQ

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    CONTENTS

    Are there any student loan relief options based on the current income of the borrower?
    What is the Student Loan Forgiveness program?
    I’m married. Does income-driven repayment base the monthly payment on just my income or is my spouse’s income included?
    Why isn’t income-driven repayment available for private student loans?
    I’m a parent that took a PLUS loan to help pay for my child’s education. Can my loan ever be forgiven, canceled, or discharged?
    Why isn’t income-driven repayment available for federal PLUS loans?
    Can I apply for income-driven repayment while I’m still in school?
    Is the loan forgiveness taxable?
    Will I always pay the same amount each month under an income-driven repayment plan?
    Is Forgiveness Processing a loan consolidation company?
    Is Forgiveness Processing a part of the Department of Education?
    What is the Public Service Loan Forgiveness (PSLF) Program?
    How can I get my federal student loans deferred?
    Can you consolidate private student loans with federal student loans?

     Are there any student loan relief options based on the current income of the borrower?

    There are several repayment plans that are designed to meet the different needs of individual borrowers.

    We can assist you in finding out what repayment plan you qualify for and the best repayment option available to you based on your specific situation.

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    What is the Student Loan Forgiveness program?

    The name “Student Loan Forgiveness” has become the nickname for a program actually called the William D. Ford Direct Loan program. Many people only know about the program, and have heard of it through others as the Obama Student Loan Forgiveness program. The name came about when President Obama reformed part of the Direct Loan program in 2009 in his Health Care and Education Reconciliation Act of 2010. It’s important to keep in mind all the programs are offered for federal student loans only.

    If you enroll into an income-driven repayment plan, you loan balance would be forgiven at the end of the term if you still have a remaining balance. The term of the repayment would be between 20-25 years depending on when your loans were originally borrowed.

    How much you will forgiven will depend on:

    • your original loan amount,
    • your family size,
    • how much you are earning,
    • how much your earnings fluctuate during your repayment term.

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    I’m married. Does income-driven repayment base the monthly payment just on my income, or is my spouse’s income included?

    Income-driven repayment calculates the monthly payment based on your income as reported on your federal income tax returns.

    If you file your taxes as married filing jointly’, both incomes will be counted.

    If you file your taxes as ‘married filing separately’, only your income will be counted.

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    Why isn’t income-driven repayment available for private student loans?

    Income-driven repayment is a federal repayment plan for federal student loans.

    The terms of private student loans are set by the banks and financial institutions that offer them, not the federal government.

    No private student loan program offers income-driven repayment

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    I’m a parent that took a PLUS loan to help pay for my child’s education. Can my loan ever be forgiven, canceled, or discharged?

    You must repay your parent PLUS loan even if the student doesn’t complete his or her education or can’t find a job related to the program of study, or if you or the student is unhappy with the education. However, the loan may be discharged if the child for whom you borrowed dies, or if you die or become totally and permanently disabled.

    Some or all of your loans may be discharged in any of these circumstances:

    • The school closed before the student completed the program.
    • The school forged the signature on your promissory note or falsely certified that you were eligible for aid.
    • The loan was falsely certified through identity theft.
    • The student withdrew from school but the school didn’t pay a refund that it owed. Check with the school to see how refund policies apply to federal aid at the school.
    • The loan was discharged in a bankruptcy claim. This is not an automatic process—you must prove to the bankruptcy court that repaying the loan would cause undue hardship.

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    Why isn’t income-driven repayment available for federal PLUS loans?

    Income-driven repayment is available for Grad PLUS loans but not Parent PLUS loans. Congress specifically excluded Parent PLUS loans.

    However, Parent PLUS borrowers may consolidate their loan into a Direct Consolidation Loan. 

    This will allow them to repay the new consolidation loan under the Income-Contingent Repayment plan (but not under any other income-driven plan).

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    Can I apply for income-driven repayment while I’m still in school?

    No. In order qualify for income-driven repayment, you must have at least one Direct Loan or FFEL (Federal Family Education Loan Program) Loan that is in grace, repayment, deferment, forbearance, or default status.

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    Is the loan forgiveness taxable?

    The 10-year public service loan forgiveness is not taxable under section 108(f) of the Internal Revenue Code because the forgiveness is restricted to borrowers who work in specific occupations.

    However, the 25-year loan forgiveness for borrowers who don’t work in public service careers will represent taxable income to the borrower under current law.

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    Will I always pay the same amount each month under an income-driven repayment plan?

    When you begin making payments under an income-driven repayment plan, your monthly payment will be based on your income and family size.

    You must provide the Department Of Education with updated income and family size information each year.

    Your required monthly payment amount may increase or decrease if your income or family size changes from year to year.

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    Is Forgiveness Processing a loan consolidation company?

    No. Forgiveness Processing is a document processing company, not a loan consolidation company.

    Forgiveness Processing helps prepare documents and does not make any loans or negotiate with your lenders.

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    Is Forgiveness Processing a part of the Department of Education?

    No. Forgiveness Processing is not affiliated with the Department of Education, or any academic or governmental entity.

    Forgiveness Processing is a for-profit business and all of the services provided by Forgiveness Processing can be performed without paid assistance if you have the time and energy to learn and complete the procedures and obtain the paperwork necessary to do so.

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    What is the Public Service Loan Forgiveness (PSLF) Program?

    The PSLF Program was established to encourage individuals to enter and continue in full-time public service employment by forgiving the remaining balance of their Direct Loans after they have made 120 qualifying payments after October 1st, 2007, under certain repayment plans while employed full-time by a public service organization.

     

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    How can I get my federal student loans deferred?

    Federal student loans are granted deferrals on a case-by-case basis. The most common reasons for deferral include:

    • Unemployment or demonstrated economic hardship
    • Enrollment in college, career school or graduate program
    • Active military service

    More about deferment and forbearance here: http://forgivenessprocessing.com/student-loan-deferment-forbearance/

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    Can you consolidate private student loans with federal student loans?

    No. A private loan cannot be consolidated with your federal student loans.

    It can only be consolidated with other private loans.

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