How to know if you can
Michael Weaver has long struggled under the weight of his student loan debt, which amounts to around a quarter of a million dollars.
The addictions counselor, whom her mother describes as “compassionate,” couldn’t imagine a debt-free future, let alone be able to help her daughter achieve her college dreams.
Everything changed when Weaver appeared on Go for Broke, a reality show that helps Americans overcome their financial burdens. In an episode that aired Nov. 11, host Tonya Rapley enlists student loan expert Bobby Matson, founder and CEO of Payitoff, to help Weaver manage his debts.
Matson explains that he started the business because he and his wife also faced six-figure debts that prevented them from starting a family.
After reviewing Weaver’s situation, Matson discovered that he was eligible for the Public Service Loan Forgiveness Program, which provides tax-free loan forgiveness on federal student loan debt for those who have worked as a public servant for ten years or more. Since Weaver was well past the eligibility point, he was able to have his entire $250,000 balance cleared.
“Now I’m going to be able to help my daughter get to college,” Weaver said after hearing the news. “That’s the best news besides his birth.”
Weaver is just one of millions of Americans who could be eligible for a student debt relief program. Today, about 44 million Americans owe a total of $1.75 trillion in student loans, but the recently announced student loan relief program will reduce much of that debt for most borrowers.
Under this program, the Department of Education provides $10,000 in debt relief to all borrowers and $20,000 to Pell Grant recipients who meet income requirements. Specifically, the program applies to those who earned less than $125,000 as an individual or less than $250,000 as a household for married couples in 2020 or 2021. However, the relief comes with also a resumption of payments, which will begin in January. after a pandemic pause of several years.
Here are some steps borrowers can take to regain control of their student loans before payments resume.
1. Apply for the Federal Student Loan Debt Relief Program as soon as possible.
To have your loans discharged before payments resume, you must apply now. It doesn’t matter if you’re actively repaying your loans, in school, in grace period, or in default, as long as you have eligible federal student loans and meet certain income requirements. You can read more about these eligibility requirements and complete the debt relief application on the FSA website (debt relief application is open, but debt relief has been suspended) . You can also check your eligibility for free through Payitoff’s Debt Relief Eligibility Tool.
2. Know who your student loan managers are.
Your student loan manager handles billing and other services on federal student loans on behalf of the federal government, and is often able to provide borrowers with repayment options they may not know are available. . For example, some lending services offer income-based repayment plans and loan consolidation, which can help make outstanding debt more manageable. They can also help recover usernames and reset passwords for those who lost track of their credentials during the long payment break. Those with multiple loans may even have more than one. To find your service agent, visit your Federal Student Aid (FSA) account dashboard and scroll down to the “My Loan Officers” section.
3. Review and update contact information and payment preferences
In order to help you stay on top of your student loans, your service needs up-to-date contact information, and given the time since the last payment, many Americans need an update. Make sure your loan officer has your correct address, phone number, and email address, and don’t forget to review your payment preferences, especially your autopay settings, before returning payments in January. If you haven’t used autopay before, it might be time to consider signing up, because signing up for autopay for federal loans can help you save.
4. Explore options to lower your monthly payments now.
To lower your monthly federal student loan payments, consider applying for an income-contingent repayment plan. These programs are designed to ensure that your monthly payments remain affordable based on your income and family size. To reduce private student loan monthly payments, consider refinancing with a private lender.
If, like Weaver, you’re not sure where to start or need help, you can also access Payitoff’s personalized, automated advice to find the best steps for your student loans for free; Don’t expect the CEO to deliver your solution to you in person.
Text “JOIN” to +1 (323) 591-5880 or click this link to receive free advice on managing your student loan debt.