You talk about student loans, and your mind naturally enters a stressful state. Student loans are considered one of the root causes for many mental illnesses and financial instability. The inevitable loan burden is more of a never-ending dilemma, that only seems to add up, and all of your repayments are never adequate. Rather than putting yourself through mental, emotional and financial stress, every month; you should explore all your options to get as much ease and relief on this nerve-wracking part in your rather peaceful life. When it comes to loan forgiveness, people choose to stay in the dark or just don’t know what benefits they can get out of that. The reason being, people have several established misconceptions about the number of student loan forgiveness programs that they tend to ignore whatever is good about them. Most people assume that these forgiveness options are more like an additional expense on top of their standard repayment amount, which is definitely not the case. These wrongly held beliefs lead one to close all doors of opportunities that may be a rather easy and steady way out. Here are some myths that are misleading but are still considered authentic and worth believing; here’s the truth behind them that can help you make an informed decision.
Myth # 1: There’s A Strict Eligibility Criteria
Well, every policy and program has certain criteria, and the same goes for these forgiveness programs. However, the eligibility criteria cover a vast number of people, without them realizing it. There are various programs based on your particular jobs, pay scale and other issues such as disability. Despite having standard criteria, these programs provide the debt relief most people are looking for. For example, there are programs like public service loan forgiveness, and is of great assistance for people working in the public sector. Similarly, people with total or permanent disability can benefit from the disability discharge program. Teachers have great advantages with the teacher loan forgiveness program where they can get a good amount of principal reduction along with early forgiveness. The myths or misconceptions regarding eligibility for these beneficial programs are baseless, and one should always consider doing their own research about them because you may qualify for a principal reduction, relief or even complete and partial reduction.
Myth # 2: You Can Only Get Forgiveness On Federal Loans
This is more of a belief than a myth; most people think that there are no benefits, relief or forgiveness that can be availed on private loans. The options may not be as many as federal loans, but there still are options like negotiating with your lender and getting some relief, if not forgiveness based on your credit history. You can also consolidate your loans and get some settlement over a number of private loans.
Myth # 3: Bankruptcy is not your way out
Most people assume bankruptcy as an option never to be considered because it is only taken into account as a last resort by most people. It is not easy to opt for bankruptcy, but if your student loan repayment may result in causing you genuine undue financial hardships, then this can help in going for bankruptcy. Jay S. Fleischman, who is a lawyer and deal the student loan problems says,
“Many people who seek a discharge of their student loans in bankruptcy end up settling on a reduced balance or affordable payment plan, which may accomplish your goal of bringing the payments in line with your financial abilities.”
Quick Tip: Dealing with a creditor can be more beneficial than with an attorney.
Myth # 4: Public Service Loan Forgiveness Requires Employer Certification
While it is important to provide proof and certification regarding your job being public service, it is not necessary to provide employer certificates and documents. Anything that authentically proves that you are a public service employee can get you the benefits of public service loan forgiveness. It is not necessary to fill out a plethora of employer certification because payments paid on direct loans and after Oct 2007, while you were working for a public service job will eventually be counted as the 120 payments the program requires.
Myth # 5: Student Loan Forgiveness Is Not For Parents:
When it comes to student loans, it is usually parents cosigning for their loans, but with PLUS loans there are no options like forgiveness. They either have to keep paying for their children or opt for consolidation. What most parents don’t know is: the public service loan forgiveness program offers income contingent and income-based repayment methods for which they can easily qualify and get relief on the hefty debt they have to pay along with several other loans like a mortgage.
Loan forgiveness is a means to help people with student loans to easily get rid of their debt, and for more and more people to benefit from, them. However, with all these myths most people don’t even bother looking into options as beneficial as these. With matters like student loans, it is extremely important that you do constant and thorough research, while consulting people with the expertise as much as you can to be able to make your way out of debt, as soon as possible.