Loans on The College Grind

Complete list of student loan forgiveness, cancellation, discharge, and repayment assistance programs

Sat, 11 Nov 2023 06:10:58 +0300

Key Points

Most true forgiveness and discharge programs apply to federal student loans, not private loans.
Public Service Loan Forgiveness (PSLF) is the best-known program, but many other federal, state, and profession-based programs also provide relief.
Some programs forgive loans for working in certain jobs (for example, public service, teaching, or health care), while others cancel or discharge debt because of school problems or serious hardship such as disability, death, or bankruptcy.
States operate dozens of loan repayment assistance programs (LRAPs), especially for doctors, nurses, dentists, teachers, public defenders, and other public servants, often in rural or underserved areas.
Private student loan forgiveness is rare; private loans generally do not qualify for federal forgiveness programs and rely instead on contract-based policies, settlements, or bankruptcy in limited cases.
Many private lenders will consider discharging loans after death or permanent disability, but policies are lender‑specific and sometimes still leave cosigners or estates liable.
Before making major career, consolidation, or refinancing decisions, borrowers should verify loan type and program rules directly with Federal Student Aid, servicers, and official program administrators.

Forgiveness vs. Cancellation vs. Discharge vs. Repayment Assistance

Federal Student Aid and servicers often say that forgiveness, cancellation, and discharge all mean you no longer have to repay some or all of your student loan, but they use the terms in different contexts.

How to read a financial aid offer and spot the traps that lead to debt

Sun, 05 Nov 2023 12:04:19 +0300

Key Points

A financial aid offer is a marketing document, not a final bill — and colleges are free to format them however they want.
Grants and scholarships are free money; loans and work-study are not — even when they’re all listed together as “aid.”
The only number that really matters is your net price: cost of attendance minus grants and scholarships.
Many offers inflate “aid” by counting loans, Parent PLUS loans, and work-study in the total, making packages look more generous than they are.
To compare schools, strip out loans and work-study, focus on net price, and project what you’d pay — and borrow — over four years, not just freshman year.

Colleges know that financial aid offers can make or break a student’s decision, so they design them to look as attractive and “affordable” as possible. That often means mixing free money with loans and work earnings in a way that makes packages look bigger and clearer than they really are.

Parent PLUS Loans explained. The most misunderstood (and risky) way to pay for college

Sat, 04 Nov 2023 11:36:27 +0300

Key Takeaways

Parent PLUS loans are federal loans taken out by parents—not students—to cover college costs that remain after other aid is applied.
Eligibility is based on being a biological, adoptive, or sometimes stepparent of a dependent undergraduate, and passing a basic adverse-credit check; there are no formal income limits.
These loans carry the highest interest rate among federal education loans and a sizable origination fee, and historically have allowed borrowing up to the full cost of attendance minus other aid.
Repayment typically begins about 60 days after the loan is fully disbursed, but parents can request deferment while the student is in school—interest still accrues the entire time.
Compared with student loans, Parent PLUS loans give parents more responsibility but less repayment flexibility and more exposure to long-term debt, especially for retirement.
Policy changes taking effect around mid‑2026 sharply limit income-driven repayment access for new Parent PLUS borrowers and introduce annual and lifetime borrowing caps.
Families should treat Parent PLUS loans as a last resort after cheaper schools, grants, scholarships, student federal loans, work, and realistic payment plans have been fully explored.

Why Parent PLUS Loans Matter More Than You Think

Many families first encounter Parent PLUS loans buried inside a college financial-aid offer, often listed as if they are just another part of the “aid” package. Because these loans are federal and offered through the U.S. Department of Education, parents often assume they are safe and low-risk, similar to the loans in a student’s name.

Student loans explained. How they work, types, and what to know before you borrow

Sat, 29 Jul 2023 08:03:38 +0300

Paying for college in the United States often requires more than savings, scholarships, and grants, so many students turn to loans to fill the gap. Student loans can feel intimidating, especially if you are the first in your family to attend college, but they are simply a tool for spreading the cost of education over time.

This guide explains in plain language what student loans are, the main types you might see on your financial aid offer, how much you can borrow, how interest and repayment work, and how to avoid common mistakes. It is designed for beginners who may have no prior experience with credit, loans, or financial jargon.