With the recent vote by the House to block Biden’s student loan forgiveness program, it’s becoming more and more likely that the president’s bill will not pass. In fact, experts predict student loan payments will resume by the end of summer. So, if you were counting on Biden’s one-time relief plan to erase your student loan debt, what options do you have?
In this article, we update you on the status of federal student loan repayment programs and share five ways you can pay down or eliminate your student loan debt.
What’s going on with student loan forgiveness?
Currently, federal student loan payments are suspended, without interest, until June 30, 2023. This suspension has been in effect for three years since the onset of the pandemic. The Biden Administration keeps extending the suspension of payments in hopes the bill to forgive student loan debt passes. However, that is probably not going to happen and payments will have to resume.
Within the next month, the Supreme Court will make an official decision on whether to approve or reject the bill. And legal experts predict the Court will not pass it. Therefore, 60 days from the date the Court makes their decision or June 30, 2023 (whichever comes first), student loan payments will resume. Therefore, if you owe on your student loans, prepare to resume payments at the end of August.
What to do to pay down or eliminate your student loan debt
1. See if you qualify for a federal student loan forgiveness program
Apart from Biden’s one-time federal student loan forgiveness program, there are other federal student loan forgiveness programs that you could be eligible for.
- Do you work in public service, including government jobs and non-profits?
- Are you a teacher?
- Are you currently in the military or did you serve?
If you answered yes to any of these questions, you may be eligible for federal student loan forgiveness. Learn more here.
2. Apply for state assistance to help repay your student loan
Florida has several state assistance programs to help you repay your student loans. For example, Florida has a program specifically for nurses that helps eliminate debt incurred during nursing school. You can learn more about Florida’s programs here.
3. Find out if your employer offers tuition reimbursement
Some employers offer tuition reimbursement to help employees pay for school. Even better, some companies are now offering employees student loan repayment programs, where the company pays off portions of an employee’s student loan debt. Ask your employer if they offer any student loan assistance.
4. Set up an income-based repayment plan with loan forgiveness
Federal student loans offer income-based repayment plans. There are several options, but the most popular are Income-Based Repayment (IBR) and Pay-As-You-Earn (PAYE). And the best part? These plans offer student loan forgiveness at the end of the repayment term. If you’re in public service or a teacher, signing up for IBR or PAYE and combining it with a federal loan forgiveness program is one of the best ways to minimize your debt. Learn more here.
5. Discharge your student loan debt by filing for bankruptcy
This option is intended for individuals who are struggling to pay all financial debts—not just student loans. Filing for bankruptcy lets you erase or “discharge” many types of debt, such as credit card balances, medical bills, personal loans, and late rent payments. While student loans are not typically included in bankruptcy discharges, they can be.
To do so, you must first file for Chapter 7 or Chapter 13 bankruptcy. Then, you must file for an adversary proceeding to prove in bankruptcy court that your student loans are causing undue hardship and you cannot repay them. Proving undue hardship as it relates to repaying student loans is extremely difficult.
That’s why, if you are considering filing for bankruptcy and are struggling to repay your student loans, contact an experienced bankruptcy attorney to represent you. Having good counsel on your side gives you the best possible chance of a favorable outcome.
Overwhelmed with debt? We can help.
Speak to our bankruptcy attorneys today
The best way to know whether or not filing bankruptcy is right for you is to speak with an experienced and local bankruptcy attorney.
At Hoskins, Turco, Lloyd & Lloyd, our experienced bankruptcy attorneys understand how stressful filing for bankruptcy can be. If you have questions about filing for bankruptcy or regarding your current legal matter, don’t hesitate to contact our office. We provide free, no-obligation consultations so you can know the facts.