How To Remove Student Loans

Last Updated on January 15, 2023

If you’re a student, you’ve probably heard that student loans are the worst. Of course, there are many ways to get out of them—so if you’re looking for tips on how to get rid of your student loans, we’ve got you covered.

In this guide, we’ll cover:

-The best ways to eliminate your student loans

-How much it will cost you to pay off those pesky loans

-What to do if you can’t afford it

How To Remove Student Loans

8 Ways To Eliminate Your Student Loan Debt

1. Qualify For A Federal Student Loan Forgiveness Program

The first way to eliminate your student loan debt applies to people with Federal student loans. These are student loans that are typically handled by the Department of Education or one of the student loan servicing companies. These include many different student loan programs handled by the Federal government.

There are three major, and several smaller student loan forgiveness programs. The most popular Federal student loan forgiveness program is Public Service Loan Forgiveness. This program offers student loan forgiveness to people who work in public service for 10 years. Public service not only includes government jobs, but it also includes many non-profit jobs, education jobs, and service jobs like law enforcement or public safety.

The other two common ways to get Federal student loan forgiveness is to be a teacher, which has it’s own Teacher Loan Forgiveness Program (which doesn’t cover as much as PSLF), and military service loan forgiveness (which is also being phased out due to the PSLF program).

2. Find State Assistance For Your Student Loans

Many states also offer various student loan forgiveness programs for your student loans. 46 out of 50 states offer at least one program, with some states offering many different programs to cover a wide variety of loan types, employment, and more. In fact, Kansas offers student loan forgiveness of up to $15,000 for just living in certain parts of the state.

California, for example, offers student loan forgiveness for doctors, health professionals, and dentists. Meanwhile, Texas offers student loan forgiveness for professors, speech therapists, nurses, doctors, teachers, and lawyers.

Or my personal favorite, Maryland offers loan forgiveness for buying a house in Maryland!

Before you give up on not qualifying for Federal loan forgiveness programs, check your state and see if they offer any incentives or assistance: Student Loan Forgiveness by State.

3. Find Out If Your Employer Offers Tuition Reimbursement

Did you know that more and more employers are offering tuition reimbursement to help their employees pay for school. It’s one of the ways that I paid for school – because I worked full time while getting my college degree. Some companies, like Starbucks, even offer their employees full degree programs as part of their employee benefits.

Even better, some companies are now offering their employees Student Loan Repayment Programs – where the company is paying off portions of their employee’s student loan debt.

Working during college is one of the smartest moves that any student can make. But if you’re already working, why not make sure that you’re taking advantage of all your employers benefits and see if you can’t eliminate or erase some of your student loan debt with a tuition reimbursement program. Many of these programs require you to pay up-front (thus take out student loans), and then provide proof of course completion to your employer. Once you’ve completed the class, your employer will typically reimburse you through your paycheck.

Already done with school and buried in student loan debt? Some employers offer signing bonuses and other perks to potential employees. But you have to ask. Along with negotiating that first salary after graduation, you need to see if you’re employer will offer you any help with your student loan debt.

4. Consolidate Your Federal Student Loans

The next option to try to help you eliminate your student loan debt is to consolidate your Federal student loans. Now, while consolidation by itself won’t help you lower your payments or your student loan balance, what it will allow you to do is to be financially organized.

When you start college before your Freshman year, you’ve likely already signed up for your first student loan. Then, you sign up and receive a new student loan each year. And if your Federal student loan doesn’t cover the full balance of your tuition, you likely have private loans as well (which we’ll cover below). That means you could have four or more different loans and payments. How confusing!

To make matters worse, each of these loans could have a different payment amount and due date. If you mess up one payment, you could harm your credit score and be hurting your financial future.

5. Find A Repayment Plan That Matches Your Ability To Pay

The next step in eliminating your student loan debt is to find a repayment plan that matches your ability to pay. After you graduate, you are automatically enrolled in the Standard Repayment Plan. This is 10 years of even payments – which may not work for all borrowers. The trouble is, many graduates don’t know that they can change this plan – they just assume they are stuck with that student loan payment.

If you have Federal student loans, there are many repayment plans that could help you make your student loan debt more manageable – which, in turn, will help you eliminate your debt faster.

If you plan on your income going up in a few years after graduation, you could look at a repayment plan like Graduated, which has a lower up-front payment that rises over time. If you want a lower monthly payment, but are okay with paying it over a longer time, look into the Extended repayment plan.

6. Setup An Income-Based Repayment Plan With Loan Forgiveness

When selecting a repayment plan, if any of the above Standard options still don’t work, Federal loans offer income-based repayment plans. There are several versions of this, but the most popular are Income-Based Repayment (IBR) and Pay-As-You-Earn (PAYE).

The great thing about IBR and PAYE is that they offer a “secret” benefit – student loan forgiveness. Many people don’t realize is that both of these plans offer student loan forgiveness at the end of the repayment term. Any remaining balance on the loan will be forgiven, but unlike the other Federal student loan forgiveness plans, you will owe taxes on the amount forgiven. Either way, this is an excellent benefit.

With both of these plans, you simply provide proof of income, and the Department of Education calculates a monthly payment for you that is 10% of your discretionary income. That means your monthly student loan payment will be affordable! You do have to resubmit your income annually, and your payment could rise as your income rises.

If you’re in Public Service, signing up for IBR or PAYE and combining it with PSLF is one of the best ways to minimize your student loan debt.

7. Refinance Your Student Loans

If you have private student loans, the best way to start eliminating this debt is to refinance your private loans at a lower interest rate. This will not only save you money in interest over the life of the loan, but it will also lower your payment up front.

One of the best tricks is to refinance your loans at a lower payment, but continue paying your previous payment amount. This could potentially shave years off your loan, saving you hundreds or thousands of dollars.

One of the best ways to go about refinancing your student loans is to look at a comparison tool like Credible. Credible helps your receive and compare offers from multiple lenders after filling out a single form, allowing you to find and select the loan with the lowest interest rate and best terms. As a bonus, College Investor readers can get a up to a $1,000 gift card bonus when they refinance with Credible!

You can check out our list of the best student loan refinancing lenders here.

One of the biggest concerns about private student loans is that most private student loans are variable rate. We’ve put together an in-depth explanation of variable rate private student loans, and how, in most scenarios, the money saved by the lower up-front payment is almost always worth it. It’s only in very rare circumstances where your variable rate payment will be higher than your fixed rate payment.

8. Earn More Money

Finally, if none of these options work (or none of them totally eliminate your student loan debt), the next best thing you can do is earn more money. I’m a firm believer that everyone can earn an extra $100 per month if they try to. That extra $100 per month can be applied to your student loan debt, eliminating $1,200 per year from your loan balance!

Don’t know where to start? You can easily start by earning extra money doing things that you already do, or you can pick up one of these 50+ side businesses. The options are endless. Check out our full guide on earning extra money here.

It may sound counter-intuitive, but earning more is a great way to pay off student loan debt. In fact, the aspiration to earn more money was probably the reason you went to school (and took out student loans) to begin with.

department of education student loan forgiveness

Department of Education Announces Actions to Fix Longstanding Failures in the Student Loan Programs

Additional steps help at least 3.6 million borrowers move closer to debt forgiveness, 40,000 borrowers to receive immediate forgivenessAPRIL 19, 2022Contact:   Press Office, (202) 401-1576, [email protected]

  • More Resourcesen español

Today, the Department of Education announced steps that will bring borrowers closer to public service loan and income-driven repayment (IDR) forgiveness by addressing historical failures in the administration of the federal student loan programs. Federal Student Aid (FSA) estimates that these changes will result in immediate debt cancellation for at least 40,000 borrowers under the Public Service Loan Forgiveness (PSLF) Program. Several thousand borrowers with older loans will also receive forgiveness through IDR. More than 3.6 million borrowers will also receive at least three years of additional credit toward IDR forgiveness.

“Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for,” said U.S. Secretary of Education Miguel Cardona. “Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in IDR plans. These actions once again demonstrate the Biden-Harris administration’s commitment to delivering meaningful debt relief and ensuring federal student loan programs are administered fairly and effectively.”

These actions are part of the Department’s commitment to address historical failures in the administration of the federal student loan program and support student loan borrowers through the pandemic. They also help address the impact of the COVID-19 pandemic on borrowers with lower incomes and high debt loads. Today’s steps will help restore the promise of IDR plans by ensuring that borrowers have an affordable and effective path out of debt.

Beyond the immediate corrective actions announced today that will provide relief to borrowers harmed in the past, FSA will take action to ensure that borrowers receive these benefits in the future. Below are the actions being taken today.

Ending “Forbearance Steering”

Department regulations require that borrowers who are facing difficulty making their loan payments get clear and accurate information from servicers about their options for staying out of delinquency, including IDR plans, and the financial consequences of choosing short-term options like forbearance. However, FSA reviews suggest that loan servicers placed borrowers into forbearance in violation of Department rules, even when their monthly payment under an IDR plan could have been as low as zero dollars. These findings are consistent with concerns raised by the Consumer Financial Protection Bureau and state attorneys general. A borrower advised to choose an IDR plan instead of forbearance can get a reduced payment, stay in good standing, and make progress toward loan forgiveness. A borrower advised to choose forbearance – particularly long-term consecutive or serial uses of forbearance – can see their loan balance and monthly payments grow due to interest capitalization and lead to delinquency or default.

The Department will address forbearance steering by:

  • Conducting a One-Time Account Adjustment to Count Certain Long-Term Forbearances toward IDR and PSLF Forgiveness

Borrowers steered or inappropriately placed into long-term forbearances miss out on critical progress toward IDR and PSLF forgiveness; this can set them back years. The Department’s regulations and servicer contracts have safeguards, including a 12-month limit for any single use of forbearance, and a 36-month cumulative limit on discretionary forbearance. A review of past forbearance use shows that long-term use of forbearance was remarkably widespread. More than 13% of all Direct Loan borrowers between July 2009 and March 2020 have used forbearance for at least 36 months cumulatively. These changes will be applied automatically to borrowers’ accounts later this year. To mitigate the harms of inappropriate steering into long-term forbearance, FSA will conduct a one-time account adjustment that will count forbearances of more than 12 months consecutive and more than 36 months cumulative toward forgiveness under IDR and PSLF. Borrowers who were steered into shorter-term forbearances will be able to seek account review by filing a complaint with the FSA Ombudsman at StudentAid.gov/feedback.

  • Increasing Oversight of Servicers’ Forbearance Use

FSA will target forbearance steering by restricting servicers’ ability to enroll borrowers in forbearance by text or email, conducting an external review of patterns of forbearance use and servicers’ practices to identify other potential changes to address steering, and working in partnership with the Consumer Financial Protection Bureau to do regular audits of forbearance use. This will build upon other FSA efforts to improve oversight of loan servicing activities, including stronger accountability provisions in servicing contracts, renewing partnerships with federal and state regulators and clarifying its position on federal preemption of state oversight of loan servicing.

FSA will begin implementing these changes immediately, but borrowers may not see the effect in their accounts until the last quarter of 2022.

Tracking Progress Toward IDR Forgiveness

IDR plans offer substantially lower monthly payments for most borrowers. Borrowers on most plans are entitled to forgiveness after 20 years of payments and depend on FSA and its servicers to accurately track their progress toward relief. However, the Department’s review of IDR payment-tracking procedures has revealed significant flaws that suggest borrowers are missing out on progress toward IDR forgiveness.

The Department is committed to fixing this problem swiftly and permanently. Secretary Cardona has directed FSA to:

  • Conduct a One-Time Revision of IDR Payments to Address Past Inaccuracies

To fully address past issues with IDR payment counting, FSA will do a one-time revision of IDR-qualifying payments for all Direct Student Loans and federally-managed Federal Family Education Loan Program (FFEL) loans. Any months in which borrowers made payments will count toward IDR, regardless of repayment plan. Payments made prior to consolidation on consolidated loans will also count. This fix is necessary to correct for data problems and past implementation inaccuracies. Any borrower who has made the required number of payments for IDR forgiveness based on this payment-count revision will receive loan cancellation automatically. Additionally, FSA will count months spent in deferment prior to 2013 toward IDR forgiveness (with the exception of in-school deferment) for this same population of borrowers to address concerns that, prior to that date, its data cannot distinguish IDR-eligible deferments from other deferments.

  • Permanently Fix IDR Payment Counting by Reforming FSA’s IDR Tracking

Borrowers should be able to rely on FSA and its loan servicers to keep accurate records of their progress toward forgiveness through IDR plans. FSA will issue new guidance to student loan servicers to ensure accurate and uniform payment counting practices, and it will track payment counts in its own modernized data systems. In 2023, FSA will begin displaying IDR payment counts on StudentAid.gov so borrowers can view their progress after logging into their accounts. In addition, the Department plans to revise the terms of IDR through rulemaking to further simplify payment counting by allowing more loan statuses to count toward IDR forgiveness, including certain types of deferments and forbearances.

FSA will begin implementing these changes immediately, but borrowers may not see the effect in their accounts until the last quarter of 2022.

Tackling Student Debt

From Day One, the Biden-Harris Administration has been committed to making student loan relief programs work for everyone, including by addressing failures that deny borrowers the benefits they earned. Efforts to revise IDR regulations will produce substantially more affordable monthly payments for millions of borrowers. Today’s actions complement steps the Administration has already taken within its first year to cancel more than $17 billion in debt for 725,000 borrowers in addition to extending the student loan payment pause, saving 41 million borrowers billions of dollars in payments each month. The Department has now approved approximately:

  • $6.8 billion for more than 113,000 public servants through improvements to PSLF;
  • $7.8 billion for more than 400,000 borrowers who have a total and permanent disability;
  • $1.2 billion for borrowers who attended ITT Technical Institutes before it closed; and
  • Nearly $2 billion to 105,000 borrowers who were defrauded by their school.

To make college more affordable for current and future students, President Biden has called for and Congress has included in bipartisan legislation a $400 increase in the maximum Federal Pell Grant—the largest increase in the maximum award in over a decade.

To protect students and taxpayers from predatory or low-value colleges, the Department has also restored the FSA Office of Enforcement and started efforts to strengthen key rules including borrower defense to repayment and gainful employment.

About the author

The Editorial Team at Infolearners.com is dedicated to providing the best information on learning. From attaining a certificate in marketing to earning an MBA, we have all you need. If you feel lost, reach out to an admission officer.
Study on Scholarship Today -- Check your eligibility for up to 100% scholarship.

Leave a Comment