One of the biggest obstacles to getting back on your feet financially are student loans. They usually have a very high interest rate and are very difficult to find relief through traditional methods, like bankruptcy.
Thankfully, there is relief on the way from the federal government. And, the attorneys from The Orlando Law Group are here to help you navigate.
First and foremost, do not fall for any scams or people calling asking for your forgiveness applications or from people and organizations that sound too good to be true. Just like so many other things, if it’s too good to be true, it probably is. If you have any questions about your student loans or people who approach you, please feel free to call.
While there are people trying to take advantage of you, student loan relief is absolutely real and you are probably eligible for some relief.
FIND OUT ABOUT YOUR STUDENT LOANS
The first thing you must do is find out what type of student loans you have. Not all student loans are the same and not all loans are eligible for relief.
To find out what type of loans you have, visit StudentAid.gov and update your information. You want to make sure you have a loan that is serviced by the United States Department of Education. Only those loans are eligible for relief currently.
Unfortunately, if you have a loan through the Federal Family Education Loan Program, you will not be eligible for the 10k or 20k relief, per a recent news release. These were loans taken out before 2010. These loans were made to students by nonprofits, banks, and other private lenders and guaranteed by the federal government. Some of the FFELP loans were converted to direct loans during the Great Recession, but not all of them. In fact, more than 11 million loans are the FFELP loans.
By submitting your information on the StudentAid.gov site, you will quickly know how you should proceed.
ACT QUICKLY FOR THE PSLF PROGRAM
If you are employed by a government or not-for-profit organization, you could possibly be eligible for the Public Service Loan Forgiveness program that can truly help your situation.
According to StudentAid.gov, you are eligible for relief under this act if:
- work full-time for that agency or organization.
- have Direct Loans (or consolidate other federal student loans into a Direct Loan).
- repay your loans under an income-driven repayment plan*; and
- make 120 qualifying payments.
If you think you qualify, sign up soon.
Plus, there is a program that you can utilize for relief – but the deadline is October 31, 2022. This program will provide credits for any payments you made during the pandemic. For more information, please review this site, but understand you must have been employed for a government entity or for a 501(c)(3) during that time period.
To be clear, serving in the military does qualify as having a government entity – so active military with student loans should review this as soon as possible.
UP TO $20,000 IN RELIEF FOR YOU
In August, the White House officially made a one-time student loan relief payment into law. The summary from the federal government is:
The U.S. Department of Education (ED) will provide up to $20,000 in debt relief to Federal Pell Grant recipients and up to $10,000 in debt relief to non-Pell Grant recipients. Borrowers with loans held by ED are eligible for this relief if their individual income is less than $125,000 (or $250,000 for households).
Applications for the program are now open. Go to studentaid.gov, log in and go to student loan forgiveness to complete a simple application. People who think they are eligible will need to apply by December 1 for this debt relief.
This link has a tremendous Q&A for your reference, but here are a couple of questions that maybe of interest to you.
- What kind of loans are eligible? The relief act specifically listed the following:
- William D. Ford Federal Direct Loan (Direct Loan) Program loans
- Federal Family Education Loan (FFEL) Program loans held by ED or in default at a guaranty agency
- Federal Perkins Loan Program loans held by ED
- Defaulted loans (includes ED-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, parent PLUS, and graduate PLUS; and Perkins loans held by ED)
- What if my spouse and I consolidated our loans? One of the best parts of the legislation was that you can separate out the two loans for relief meaning if both you and your spouse received Pell Grants along with student loans, you could be eligible for up to $40,000 in relief.
- What steps do I need to take now? Again, go to StudentAid.gov and make sure they have all your information. Plus, follow up with your servicer to make sure they have your current contact information.
- What if I haven’t made a payment in a while? Defaulted loans are eligible to receive the relief. Additionally, there has been discussion of a Fresh Start program for loans that are default. Watch for information on this around July 2023. You can also look for a new income repayment plan that will start around July 2023.
Like with everything the government does, it’s not always easy to obtain the relief that is offered. There will be lots of questions and often it will not be easy to get someone on the phone to ask your questions.
Of course, our attorneys are available to help you with this and other issues facing your finances. It’s important that you start the process as soon as possible to get them back in order and get you on track to success.
The attorneys at The Orlando Law Group represent clients with financial difficulties in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout central Florida.
If you would like to schedule a consultation for student loans, please reach out to our office at 407-512-4394, fill out our online contact form or save this information in case you ever find yourself or a loved one needing to use it.
If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.