Nelnet does not have its own student loan forgiveness program. Instead, it helps administer different loan forgiveness programs that the United States Department of Education offers to federal student loan borrowers, including the following types of forgiveness programs.
Related: How to Get Parent PLUS Loans Forgiven
Types of forgiveness programs
Nelnet administers several kinds of loan forgiveness programs. These include:
Income-Driven Repayment (IDR) Forgiveness
Under this program, the remaining balance of your loan will be forgiven if your federal student loans aren’t fully repaid at the end of the repayment period. The length of this period depends on the specific plan but can be 20 or 25 years. There are four specific plans launched under the IDR umbrella that are crucial to be aware of. But first, let’s talk a little bit about the time-sensitive IDR Waiver.
The IDR Waiver
Also known as the IDR Account Adjustment gives borrowers loan forgiveness credits they’re owed for mismanagement by student loan servicers. This program also has a hidden benefit that few people know about: if you combine your newer loans with your older ones, your entire loan balance can be forgiven immediately.
But you have to apply by April 30th, 2024.
For the full rundown of this program, check out this article next.
One quick way to determine if your Nelnet loan is eligible for forgiveness is to check the first letter of your Nelnet account number. If it starts with “E,” you have Ed-owned loans that typically meet the eligibility requirements for the IDR Waiver.
But if your account starts with “D” or “J,” those may need to consolidate to qualify.
Pay As You Earn (PAYE)
The Pay As You Earn (PAYE) plan caps your monthly federal student loan payments at 10% of your discretionary income, where payments can be spread out over 20 years, after which any remaining balance is forgiven.
Income Based Repayment (IBR)
The Income-Based Repayment (IBR) plan is only slightly different from PAYE as it sets your monthly student loan payments at either 10% or 15% of your discretionary income depending on when you took out your loans, with any remaining balance forgiven after either 20 or 25 years.
Income Contingent Repayment (ICR)
The Income-Contingent Repayment (ICR) plan is yet another Income-Driven Repayment (IDR) plan serviced by Nelnet, which calculates your monthly student loan payments based on 20% of your discretionary income or what you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income, and any remaining balance is forgiven after 25 years.
SAVE Plan Forgiveness (previously REPAYE)
The SAVE Plan Forgiveness is a specific loan forgiveness program geared towards those who have used SAVE Plan loans to finance their education.
With Student Loan Repayments resuming in the fall of 2023, a joint coalition co-led by Massachusetts Attorney General Andrea Joy Campbell and Washington Attorney General Bob Ferguson encouraged student loan borrowers to enroll in this plan as it could reduce their payments significantly even if they were previously enrolled in an IDR plan.
Eligibility criteria and the amount forgiven can vary depending on factors like employment sector, repayment history, and financial hardship. For more specifics, check out our latest YouTube video on this one or visit www.studentaid.gov/SAVE.
Related: Income-Driven Repayment
Public Service Loan Forgiveness (PSLF)
This program forgives the remaining balance on your Direct Loans after you have made 120 qualifying payments under a qualifying repayment plan while working full-time for a qualifying employer, typically a government or non-profit organization.
Even if you haven’t completed 120 payments, if you work for a qualifying employer, you’ll want to submit an Employment Certification Form to the MOHELA address listed on the form. Just FYI, if you do this and your qualifications are confirmed, your student loans will be transferred to MOHELA, the official loan servicer of the PSLF program.
Nelnet will likely try to suggest that you keep your loans with them while pursuing PSLF – we do not recommend keeping your student loans with Nelnet during this process.
This is because your qualifying payments for future loan forgiveness will be tracked more accurately once your loans are transferred to MOHELA. Once they reach 120 qualifying payments, borrowers can apply for PSLF by submitting the Public Service Loan Forgiveness (PSLF): Application For Forgiveness. If approved, any remaining federal student loan debt will be forgiven tax-free.
If you need more help with this book a call with me, and we’ll review your loans and the process together.
Related: Public Service Loan Forgiveness
Teacher Loan Forgiveness
Also known as the Perkins Loan Cancellation and Discharge program, this forgiveness option provides full or partial loan forgiveness to eligible teachers with Nelnet-serviced student loans. Depending on the subject taught, they may be eligible for up to $17,500 or $5,000 in loan forgiveness. However, specific requirements must be met:
Full-time employment for five consecutive years as a highly qualified teacher,
Completion of those years in a qualifying low-income school or educational service agency after the 1997-98 academic year,
Having obtained your loan before the end of your five academic years of service.
It’s important to note that the Public Service Loan Forgiveness (PSLF) provides an alternative route for loan release, and depending on your total debt amount, it may offer a more beneficial option. Hence, both programs should be considered closely to identify the best solution for you.
To chat about it, book a call with me, and we’ll review your loans and the process together.
Related: Teacher Loan Forgiveness
