On Oct. 6, 2021, the U.S. Department of Education (ED) announced a time-limited waiver opportunity to its PSLF program rules. Under the time- limited waiver opportunity, borrowers could receive credit for past payments which would not have been previously classified as qualifying payments or instances in which payments were not made, specifically, servicemembers who were advised to put their loans in a deferment or forbearance status and did not make payments while on active duty. The months the borrower spent on active duty can be counted toward the PSLF.
Borrowers will need to submit a PSLF form—the single application used for a review of employment certification, payment counts, and processing of forgiveness—on or before October 31, 2022 to have previously ineligible payments counted.
The time- limited waiver essentially waives all requirements except the employment requirement. If you have Federal Family Education Loans (FFEL) or Perkins loans, you will still be required to consolidate your loan with a Direct Consolidation Loan by Oct. 31, 2022. However, any payments made on your federal student loans, under any repayment plan (partial, full, or late), on any FFEL, Perkins, or Direct Loan, will count towards your 120 qualifying payments.
Under the new time-limited waiver, you need to have been employed or are currently employed by an eligible employer (government, 501(c)(3) not-for-profit, or other not-for-profit organization which qualifies), and working full-time. You can still qualify for the full-time requirement if you are working multiple part-time jobs (that totals at least 30 hours per week) with eligible employers. For more information on which employers meet PSLF Program requirements visit the PSLF Help Tool.
Student loan debt has been a hot topic recently. With the rising cost of higher education, more and more students and parents have had no other choice but to borrow money to cover the costs of tuition. According to educationdata.org, the average cost of tuition and other related expenses to attend a public in-state college for 4-years can run over $100,000, with costs increasing for out-of-state and private schools.
For a large majority of students, these costs are offset with student loans. The average borrower owes around $30,000 in student loan debt, with half of all borrowers owing $20,000 or more, 20 years after entering school, according to educationdata.org.
Read more to understand President Biden's student loan forgiveness and repayment relief.
Most students are aware of scholarships and grants as resources to help defray the costs of education while in school, and many do take advantage of these to reduce the amount of money borrowed. Even still, dependent upon the course of study and school attended, loans may still be an important piece of the college education plan.
With federal student loans and many private student loans offering a deferment while in school, allowing students to focus on their education, the existence of loans take a back seat. These loans typically have the first payment set to be due 6 months post-graduation. This gives students an additional cushion to find a to help make their monthly payments. This 6-month grace period can create a situation where a student will not pay too much mind to the debt being acquired, until it’s time to make that first payment.
After graduation, with newly minted degree in hand, the realities of student loan debt set in and many students scramble for solutions. If this is you, you may be seeking a forgiveness program (a program that will cancel or pay your student loan debt for you). While just by virtue of having a loan forgiven seeming too good to be true, but there are in fact legitimate student loan forgiveness programs. However, there are even more out there looking to scam naïve and ill-informed students.
Don’t worry. We have all the red flags you need to be aware of when seeking out a loan forgiveness program and some tips, if you unfortunately discover that you are a victim.
Red Flags of a Student Loan Forgiveness Scam
You get a call or text form your “lender” claiming you qualify for Biden student loan forgiveness or "New" student loan Grant Forgiveness or some other loan forgiveness program.
If you received a call or text from someone claiming to be your lender, even if they know the right name of your lender or student loan servicer as well as other specific information, do not respond.
Reach out directly to your lender to inquire if they have questions or business you need to take care of with them. DO NOT use the number provided in the call or text. Make sure you get their number from a trusted source or from your loan account portal. Never trust just anyone that calls or texts.
More>>> Financial Aid Contacts and Student Loan Help
You are being asked to pay an upfront fee
It should raise a red flag if you are asked to pay a fee to receive forgiveness on money you owe. If you have federal student loans, there is no fee or charge to apply for a legitimate student loan forgiveness or student loan discharge programs (like, Public Service Loan Forgiveness or Total and Permanent Disability Discharge). You can always contact your lender or servicer directly, or even the U.S. Department of Education to help you complete the necessary forms.
When it comes to private student loans, there are no blanket forgiveness programs that exist. If you only have private student loans and you are being told you could qualify for forgiveness, that should be a major red flag. Contact your lender or the U.S. Department of Education's Office of Federal Student Aid yourself if you have any questions about potential forgiveness options.
There are some third-party companies can try to claim to be an intermediary for you but know that what they are charging you for is something that is free to you. If you are opting to use a service to help you complete paperwork, do not provide them with any private information, like your FSA ID or password, social security number, or bank account information. You can always contact your loan servicer for assistance, many servicers will offer to help you complete paperwork for free.
You are being promised quick results
Nothing is fast, especially loan forgiveness. Typically, student loan forgiveness programs require some sort of service in exchange for money given toward your loan. It’s not uncommon for programs to require years of service/work in advance of any monies paid toward your student loan. You are required to continue paying on your loan while completing this service. The idea of having a loan forgiveness program fulfilled in short amount is extremely rare, if not impossible. So, if you find a company promising debt forgiveness quickly, avoid them.
Another common tactic which isn’t about student loan forgiveness, it’s a claim to lower your monthly payment to $0. There are some legitimate federal student loan repayment plans known as income-driven repayment plans that could have a payment as low as $0 per month for eligible borrowers. However, the determination of your payment is based on your discretionary income (10-20% depending on your repayment plan), your income (and your spouse depending on your repayment plan and how you file your taxes),the state you live in, and family size. These third-party debt scam companies often times will promise you a $0 payment and will commit fraud on your account to qualify you. There have been cases where a borrower’s family size is increased to qualify them for a lower monthly payment, and servicers are now flagging these account changes. While federal student loan servicers are aware of some of the known flags of debt relief scam companies, you will be the one asked about the changes to your account.
The company claims to be affiliated with the federal government
Some scammers that try to charge you fees and tell you they can take care of your loans in short order, sometimes they will also try to claim to be affiliated with the federal government to give a sense of legitimacy to their scam. They might even try to facilitate the completion of applications and forms for you, that you could do yourself. Be wary of these people and definitely don’t hand over any money or personal information. If a company is indicated that they are affiliated with the federal government, you want to report them to the Federal Trade Commission. When you submit a fraud complaint make sure to provide as much information as possible, like the phone number that called or texted you.
The company is asking for personal information or power of attorney
Some scammers will try to convince you to give them your personal information or even power of attorney, as they claim to “take care of” the forgiveness process for you. Never give your personal information (social security number, bank account number or FSA ID) to a company offering to seek student loan forgiveness for you. Not only will they take your money (their services are rarely free, and if you share your bank account information the consequences could be worse than just fees) but even if they are, they can use your personal information and steal or sell your identity.
You are being pressured to act
Urgency is a favorite tool scammers’ like to use to get someone to act without fully thinking through a situation. They will apply pressure to get you to turn over your money and personal information before you have a chance to realize they are not working in your best interests. Always avoid companies pressuring you to act. You can always call your loan servicer and discuss deadlines with them.
What to Do if You are Scammed
See if you can retract payment
Chances are you will not recover any upfront fees paid to scammers. However, if you were able to pay with a credit card or some other form of payment where you can cancel the payment, there’s a chance you can recover your money. However, in most cases scammers are smart enough to ask for other forms of payment they know you will never be able to recover. You can try to call your bank or credit card company to discuss the situation and see if they are able to stop payment or if they offer any other protections against scammers. You may want your bank to change all your account numbers to help future use of the account by scammer.
Freeze your credit
If you’ve given your social security number to someone to help with loan forgiveness. Your identity, credit score and credit report are at risk. Freeze your credit immediately with the 3 main credit reporting agencies (TransUnion, Equifax and Experian) and report the incident to the government at Identitytheft.gov.
Reset your FSA ID
Most students have federal student loans and it’s possible the scammer asked you for your FSA ID (Federal Student Aid ID). If this is the case, reset the password on this account immediately before anyone has a chance to go in and claim any more of your personal information.
Submit a complaint to CFPB and FTC
In addition to reporting the possible identity theft, you will also want to submit a complaint to the Federal Trade Commission. It’s important to document the scam in as many places as possible, including your State Attorney General. Not only will it help you verify you are a victim, these actions will alert the authorities and could potentially prevent others from being scammed.
Contact Your Loan Servicer
This is an important step. Depending on the access you gave the debt forgiveness scam organization, they may have been able to change information in your student loan account, including your contact information. You need to fix this so your servicer can work with you and not the scammer regarding your account.
Legitimate Student Loan Forgiveness Programs
Don’t be disheartened by the scammers, there are legitimate student loan forgiveness programs out there for you to take advantage of. Many of these are facilitated by the U.S. government and are for federal student loans only, but there are some for those holding private student loans as well.
Public Service Loan Forgiveness (PSLF)
Public Service Loan Forgiveness is a government program for those who work 10 years within the government, military, or eligible non-profit entity. After making 120 qualifying payments in an eligible repayment plan, while working at a qualified employer, the U.S. Department of Education will forgive the remaining balance on your eligible Direct Loans. your Federal Direct Loan.
There have been some significant waivers granted to this program on a temporary basis.
More>>>Public Service Loan Forgiveness
Teacher Student Loan Forgiveness
Another government backed program, Teacher Student Loan Forgiveness, will forgive your student loan up to $17,500 dependent on the subject you teach and where you teach.
More>>>Teacher Loan Forgiveness
Nurse Student Loan Forgiveness
For nurses who serve in hospitals with a critical nursing shortage there are a number of programs to help repay part of your student loans. For students with private student loans the Nurse Corp Repayment program will pay up to 85% of a loan when certain criteria are met (such as working 2 or more years in a critical shortage facility or qualified nursing school).
More>>>Student Loan Forgiveness for Nurses
Other Loan Forgiveness Programs
In additional to these, there may be loan forgiveness and repayment assistance programs that aren’t part of the federal student aid program. However, to identity other legitimate programs will require you to complete some research. You may even qualify for assistance through your employer.
More>>> Employer Assistance
Student Loan Refinance
If after an exhaustive search you are unable to find a student loan forgiveness program you qualify for, don’t despair, there are still options. If you have federal loans you can reach out to your student loan servicer and modify your repayment plan or even consolidate your loans. Another option is to refinance your student loans to either save money (if you qualify for a lower interest rate) or change the terms to lower the student loan payment and make it more manageable. Please keep in mind if you refinance your federal student loans with a private lender, you will lose benefits reserved only for federal student loan borrowers.
Don’t fall for a student loan forgiveness scam. There are programs that are legit but there are also people willing to take advantage of desperate borrowers. If you are stuck, talk to your lender or student loan servicer and see if you can work out something that agrees with both of you and if not, a loan refinance might be the solution.
Best Student Loan Refinance Lenders
College Ave Student Loans
- Variable rate range: 3.44% – 7.99% APR1
- Fixed rate range: 3.99% – 7.99% APR1
- No application or prepayment fees
- Apply in 3 minutes or less for instant credit decision
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a refi borrower who selects the Full Principal & Interest Repayment Option with a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $250,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
Information advertised valid as of 8/11/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
ELFI Student Loan Refinance
- Customers are saving an average of $309 every month and an average of $20,936 in total savings after refinancing their student loans with Education Loan Finance1
- Variable and fixed rates starting from 2.48% APR and 4.29% APR2
- Prequalify in as little as two minutes
- Award winning customer service from your dedicated Student Loan Advisor who is matched to you from the moment you sign up
1Average savings calculations are based on information provided by SouthEast Bank/ Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon a number of factors.
2Rates accurate as of 9/23/22. The interest rate and monthly payment for variable rate loans may increase after closing. Your actual interest rate may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10 year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. To qualify for refinancing or student loan consolidation through Education Loan Finance, you must have at least $10,000 in qualified student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary Education Loan Finance institution. Education Loan Finance Parent Loans are limited to a maximum of the 10-year term.
SoFi Student Loans
- Rates as low as 3.24% variable and 3.99% fixed1
- No fees or prepayment penalties
- Unemployment protection
1Fixed rates range from 3.99% APR to 8.24% APR with a 0.25% autopay discount. Variable rates from 3.24% APR to 8.24% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
Splash Financial Refinance Loan
- Rates as low as 2.49%1 Variable APR and 2.59%1 Fixed APR
- No pre-payment penalties, origination, or application fees
- See rates in 3 minutes without affecting your credit score2
1The rates displayed may include a 0.25% autopay discount.
2To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Earnest Student Loan Refinancing
- Variable rates starting at 2.49% APR (including 0.25% Auto Pay discount)*
- Fixed rates starting at 3.74% APR (including 0.25% Auto Pay discount)*
- Choose your own monthly payment
- No fees of any kind and exceptional customer service for the life of your loan
- Check your rate in under 2 minutes
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.99% APR to 8.74% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.74% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.
*Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance. Not all borrowers will qualify for our lowest rates, and your rate will be based on creditworthiness at time of application.
The information provided on this page is updated as of 8/25/2022. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.