Student Loan Forgiveness: Cancellation Or Forgiveness For PLUS Loans?
It's important to understand the difference between student loan forgiveness and complete debt cancellation when it comes to PLUS educational loans. PLUS loans are given to parents of dependent students as a supplement to what is given with their financial aid package. The parent(s) taking out these loans are ultimately responsible for paying them back. Even if their child is actually making the payment, should they fail to do so at any given time, the parent is solely responsible. As of July 1, 2010, the Direct Loan program (government allocated funds) has been disbursing new PLUS loans, (i.e., Stafford loans). Known as Parent PLUS or Grad PLUS loans, graduate and professional students may also borrow money through the PLUS loan program to fund their education.
Student loan forgiveness allows for the cancellation of any remaining portion of student loans under certain circumstances. Specifically, if the borrower teaches in a low-income school or area, has served in the military, or is a public service worker. Jobs in law enforcement, government agencies, public education, and public health apply. While there are many different paths to student loan forgiveness, each path is different and should be determined based on the borrower's individual situation. The Public Service Loan Forgiveness Program was created in an effort to encourage people to go into public service jobs. Those who wish to apply for loan forgiveness must be employed in public service and make 120 consecutive payments (10 years) before the remainder of their loan can be forgiven. NOTE: PLUS loans do not apply to Teacher Loan Forgiveness programs.
Cancellation of PLUS loans is different than forgiveness. While forgiveness is an incentive for borrowers to go into public service, cancellation completely discharges funds borrowed as a result of certain extenuating circumstances including but not limited to:
*School closed within 90 days of student's enrollment. They were unable to finish program of study.
*School didn't properly qualify student's status before beginning studies.
*Parent didn't receive refund due to them.
*Parent's signature was forged.
*School did not properly evaluate student's ability to benefit from coursework before beginning studies.
*Parent (borrower) becomes totally/permanently disabled.
*Parent or dependent for whom loan was borrowed, dies.
*Loan is discharged due to bankruptcy.
Cancellation does not occur because a parent decides they do not like the school their child is attending, they disagree with what is being taught, they feel training is inadequate or because the school did not provide job placement. Fraudulent activity is not a valid reason for cancellation either.
Consolidating student loans offers borrowers the option to lower their monthly payment by extending the length of their loan from 10 years to a maximum of 30 years. This can lessen the financial burden for parents who have taken out PLUS loans for their child(ren). Consolidation also provides the option for borrowers to apply for student loan forgiveness programs. Consolidation is done through the Department of Education. Borrowers can apply directly with the Dept of Ed or work with a reputable student loan consolidation company. Consolidation is a debt management practice that enables borrowers to bundle federal loans in order to finance their child's college education into a single loan.
Student loan forgiveness allows for the cancellation of any remaining portion of student loans under certain circumstances. Specifically, if the borrower teaches in a low-income school or area, has served in the military, or is a public service worker. Jobs in law enforcement, government agencies, public education, and public health apply. While there are many different paths to student loan forgiveness, each path is different and should be determined based on the borrower's individual situation. The Public Service Loan Forgiveness Program was created in an effort to encourage people to go into public service jobs. Those who wish to apply for loan forgiveness must be employed in public service and make 120 consecutive payments (10 years) before the remainder of their loan can be forgiven. NOTE: PLUS loans do not apply to Teacher Loan Forgiveness programs.
Cancellation of PLUS loans is different than forgiveness. While forgiveness is an incentive for borrowers to go into public service, cancellation completely discharges funds borrowed as a result of certain extenuating circumstances including but not limited to:
*School closed within 90 days of student's enrollment. They were unable to finish program of study.
*School didn't properly qualify student's status before beginning studies.
*Parent didn't receive refund due to them.
*Parent's signature was forged.
*School did not properly evaluate student's ability to benefit from coursework before beginning studies.
*Parent (borrower) becomes totally/permanently disabled.
*Parent or dependent for whom loan was borrowed, dies.
*Loan is discharged due to bankruptcy.
Cancellation does not occur because a parent decides they do not like the school their child is attending, they disagree with what is being taught, they feel training is inadequate or because the school did not provide job placement. Fraudulent activity is not a valid reason for cancellation either.
Consolidating student loans offers borrowers the option to lower their monthly payment by extending the length of their loan from 10 years to a maximum of 30 years. This can lessen the financial burden for parents who have taken out PLUS loans for their child(ren). Consolidation also provides the option for borrowers to apply for student loan forgiveness programs. Consolidation is done through the Department of Education. Borrowers can apply directly with the Dept of Ed or work with a reputable student loan consolidation company. Consolidation is a debt management practice that enables borrowers to bundle federal loans in order to finance their child's college education into a single loan.
Source...