Loan Forgiveness

There are various loan forgiveness programs available for students who have borrowed Federal Student Loans. Below is a list of programs Southwestern College graduates can qualify for after graduating and obtaining their professional licenses.

Federal Student Loan Debt Relief

Students can now apply for federal student loan forgiveness, up to $20,000! The Biden Administration recently launched a simple application on the Student Aid website, and it takes less than 5 minutes to apply. 

You may qualify for:

• Up to $20,000 in debt relief if you received a Federal Pell Grant in college and meet the income requirements
• Up to $10,000 in debt relief if you didn’t receive a Federal Pell Grant in college and meet the income requirements
• For more information, go to:  https://studentaid.gov/manage-loans/forgiveness-cancellation/debt-relief-info
• To apply for Federal Student Loan Debt Relief:  https://studentaid.gov/debt-relief/application

*Debt forgiveness only applies to loan balances held prior to June 30, 2022.  Loans disbursed on or after July 1, 2022, do not qualify for forgiveness.

Loan Forgiveness Programs

Public Service Loan Forgiveness Program (PSLF)

The PSLF Program (https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service ) forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

PSLF Waiver Opportunity: (https://studentaid.gov/announcements-events/pslf-limited-waiver ) Under the new temporary rules, any prior period of repayment will count as a qualifying payment, regardless of loan program, repayment plan, or whether the payment was made in full or on time. But you do continue to need qualifying employment.

This change will apply to borrowers with Direct Loans, those who have already consolidated into the Direct Loan Program, and those who consolidate into the Direct Loan Program by Oct. 31, 2022

What Federal student loans are eligible for forgiveness?

• Direct Subsidized
• Direct Unsubsidized
• Direct PLUS
• Direct Consolidation – Non-eligible loans could possibly be consolidated in order to qualify for PSLF

What are the specific repayment requirements?

• Be employed full-time by a qualified public service organization
  • Full time defined as least an annual average of 30 hours per week
  • A non-profit, tax-exempt organization under the section 501 (c)( 3) of the Internal Revenue Code, not matter what services are provided
  • Government organization (including a federal, state, local, or tribal organization, agency, or entity; a public child or family service agency or tribal college or university.
  • Private, not-for-profit organization could qualify if providing a qualifying public service.
• Borrower has made 120 on-time separate monthly payments after October 1, 2007, on Direct Loans. On-time meaning no later than 15 days past the due date.
• U.S. Department of Education regulations determine if borrower meets all criteria for PSLF.

How is my eligibility tracked and what do I need to submit to qualify?

• FedLoan Servicing is the only servicer tracking PSLF, www.myfedloans.org
• Employment Certification Form (ECF) should be submitted to servicer after each year of full time employment. Employer completes ECF, borrower submits documents to servicer.
• Once an ECF is received by FedLoan Servicing, if borrower’s loans are not with FedLoan Servicing, loans will be transferred to FedLoan Servicing.

Periods of repayment on parent PLUS loans are not eligible under the limited PSLF waiver.

Complete the Public Service Loan Forgiveness (PSLF) Form With the PSLF Help Tool

The PSLF Help Tool helps determine whether you work for a qualifying employer for the PSLF or Temporary Expanded Public Service Loan Forgiveness (TEPSLF) programs, suggests actions you can take to become eligible for PSLF, and guides you through the PSLF form and submission process.

https://studentaid.gov/pslf/

Additional information about PSLF can be obtain at www.myfedloan.org/PSLF or 1-800-699-2908

Teacher Loan Forgiveness

Under the Teacher Loan Forgiveness Program, if you teach full time for five complete and consecutive academic years in a low-income school or educational service agency, and meet other qualifications, you may be eligible for forgiveness of up to $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans.

If you have a Direct Consolidation Loan or a Federal Consolidation Loan, you may be eligible for forgiveness of the outstanding portion of the consolidation loan that repaid an eligible Direct Subsidized Loan, Direct Unsubsidized Loan, Subsidized Federal Stafford Loan, or Unsubsidized Federal Stafford Loan.

National Health Service Corps

This program is open to licensed primary care providers in dental, mental, and behavioral health who are employed at an NHSC-approved site. To qualify for this program, you must: be a U.S. Citizen or U.S. National, be in an eligible discipline and primary care specialist, have unpaid federal or state loans, and work at a National Health Service Corps approved service. Two years of service allows the opportunity to receive up to $50,000 in loan repayment. In 2019 the program was expanded to include a Substance Use Disorder Program  to combat the nation’s opioid crisis. The Substance Use Disorder Workforce Loan Repayment Program (SUD Workforce LRP) offers eligible clinicians up to $75,000 in student loan repayment in exchange for a three-year commitment to provide substance use disorder treatment services at NHSC-approved sites.

Loan Forgiveness and required service commitment: $50,000 for an initial two-year service; $up to $75,000 for a three-year service commitment.

Indian Health Service

The Loan Repayment Program (LRP) funds Indian Health Service (HIS) (link for underlined portion: https://www.ihs.gov/loanrepayment/ ) clinicians to repay their eligible health profession education loans — up to $40,000 — in exchange for an initial two-year service commitment to practice in health facilities serving American Indian and Alaska Native communities. Opportunities are based on Indian health program facilities with the greatest staffing needs in specific health profession disciplines. As an LRP participant, you are eligible to extend your contract annually until your qualified student debt is paid. Many health professionals enter this program because of the financial benefits but find the cultural and professional rewards to be so great that they spend their entire careers working in Indian health.

Allied Health Loan for Service Program and More

This program is specifically for New Mexico residents who plan to practice as a health professional (behavioral health and social services included) in a designated shortage area within the state. For every year of service, a portion of the loan will be forgiven, penalties will be assessed if the service agreement is not satisfied. Student must have submitted a FAFSA to qualify and apply for this program. Additionally, program recipients will need to apply each year for funding (up to 4 years). The application opens every year on May 15^th and closes on July 1^st

Students must apply for this program before or during school (before graduation). Refer to http://www.hed.state.nm.us/students/alliedheatlh_lfs.aspx for more information. To see if your state offers a loan forgiveness program go to: https://thecollegeinvestor.com/student-loan-forgiveness-programs-by-state/

Please note some of these agencies require that you hold a license by the date funding begins. Some of the licensure requirements include, a Licensed Professional Clinical Counselor (LPCC), a Licensed Marriage and Family Therapist (LMFT) or a Licensed Alcohol and Drug Abuse Counselor (LADAC)