Although the Supreme Court struck down President Joe Biden’s student loan forgiveness program, his administration has canceled close to $48 billion of student debt since June, according to CNN. Nearly 804,000 borrowers received an email that they qualified for student loan forgiveness.

The loan forgiveness program is for those who have opted for income-driven repayment (IDR) plans for their federal student loans. Under IDR, if the borrower can make consistent payments for 20-25 years, the government can forgive the remaining balance.

If you did not receive an email on loan forgiveness, don’t despair. There are alternative programs and measures you can go for to manage and eventually eliminate your student debt. These alternatives are for those who have completed their education and for those who are about to join a university.


1.Public Service Loan Forgiveness (PSLF)

If you work in a qualifying public service or nonprofit organization, you may be eligible for the Public Service Loan Forgiveness program. Under this program, after making 120 qualifying payments, the remaining balance of your federal student loans will be forgiven. This program is an excellent option for those dedicated to public service careers. This allows borrowers to have their debt canceled in 10-20 years.

2.Employer Assistance and Repayment Programs

Some employers offer student loan repayment assistance as part of their benefits package via direct repayment programs or discretionary programs.

In a direct repayment program, the employer can make cash payments to pay the student loan. Under a discretionary program, the employer can take multiple routes, from PTO to signing bonuses.


1) Vacation time: An employee can ‘cash in’ if they do not use all their vacation time or PTO by the end of the year. 

2) 401(k) plan: Set up a student loan repayment program where you and your employer contribute a mutually agreed amount to the 401(k) plan

3) Bonus: Many companies offer a signing bonus that can considerably cut down the debt. 

4) Regular payments: Your employer can either send payments to your lender or you every month via a paycheck.

This benefit is becoming more common as employers recognize the financial strain student loan debt can cause for their employees. Be sure to check with your employer’s HR department to see if they offer any programs or benefits to help you pay down your student loans.

3.Loan Repayment Assistance Programs (LRAPs)

More than 200 colleges and universities across America offer LRAP in partnership with Ardeo Education Solutions (formerly LRAP Association). Under this initiative, a student can get assistance on any loan that has a 10+ year repayment term. 

To qualify for LRAP, a student must graduate from the partnered university and work at least ¾ time after graduation. This program often comes with specific eligibility criteria, so be sure to research and apply if you qualify.


4.Refinancing or Consolidation

Consolidating or refinancing your student loans can be a smart move, especially if you have multiple loans with varying interest rates. Consolidation combines multiple federal loans into a single Direct Consolidation Loan, simplifying your monthly payments. If your credit score is good, you might get a lower interest rate. This means saving thousands of dollars over the life span of your education loan while repaying the loan in a shorter time.

Another advantage of having a consolidated loan is to have one fixed interest rate as opposed to variable interest rates which could rise over time.

Refinancing, on the other hand, involves taking out a new private loan to pay off your existing ones. This could potentially lead to a lower interest rate, which can save you money in the long run. However, be cautious when refinancing federal loans, as you may lose access to certain federal benefits and protections.

5.Other Ways

5a: Volunteer or Service Work: Some organizations have student loan repayment assistance if you volunteer or work in deprived communities. AmeriCorps and the Peace Corps, for example, offer programs that provide partial loan forgiveness in exchange for a specified period of service.

5b: Teacher Loan Forgiveness: If you teach full-time or are about to become an educator, you might be eligible for loan forgiveness of up to $17,500.

5c: Total and Permanent Disability (TDP): To qualify for TPD, you must have a disability that severely limits your ability to work. In most cases, you’ll have to provide specific kinds of proof of your disability. As of May 2023, around 492,000 borrowers have gotten loan forgiveness through TPD discharge. Veterans can also take advantage of this if they have a permanent disability.

5d: Borrower Defense to Repayment: This is available if you have a direct loan and you have either been misled by your school or the school was found to have violated state laws.


Conclusion

At present, the outstanding education debt in the U.S. is more than $1.7 trillion. The average loan balance at graduation stands at $30,000, three times higher than what it was in the 1990s

While student loan forgiveness programs can be a lifeline for some borrowers, they are not the only solution to tackling student debt. By exploring alternative options like refinancing, employer assistance, etc, you can take proactive steps towards managing and eventually eliminating your student loans. 

For students who will start their academics next year, keep an eye on colleges that receive ‘Title IV financial aid’. These colleges will be obligated to offer adequate financial aid and counselling to students. Additionally, the colleges may not be able to withhold transcripts if the students are not able to pay their bills on time.

“We are raising the bar for accountability and making sure that when students invest in higher education, they get a solid return on that investment and a greater shot at the American dream,” said U.S. Secretary of Education Miguel Cardona. Biden administration will introduce this new consumer protection for student loan borrowers which will go into effect July 1, 2024.