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Oct

2023

Explaining Student Loan Forgiveness For Teachers

By SoFi Editors | Building Your Career, Student Loans, student_loan | No Comments

There are several options for teachers seeking to reduce their federal student loan debt, including loan forgiveness and cancellation. For example, teachers may qualify for the Teacher Loan Forgiveness program, Public Service Loan Forgiveness program (PSLF), and/or the Perkins Loan Cancellation for Teachers. Also, there are state and local loan forgiveness, cancellation, and grant programs. We’ll discuss these options in more depth below.

Teacher Loan Forgiveness Program

Amount forgiven:

Up to $5,000 or up to $17,500, depending on the subject area you teach.

Which loans might qualify:

Direct (or Stafford) Loans, both subsidized and unsubsidized, and FFEL Program Loans. For borrowers with Direct Consolidation Loans, 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 may qualify as well. Learn more here .

Qualifications:

• Teaching at a low-income school; you can search for a school in this directory

• Teaching for five complete and consecutive academic years

• Existing student loans cannot be in default

Details:

The maximum amount that can be forgiven under this program depends on the role and subject the borrower teaches. Teachers are eligible to receive up to $17,500, if they are considered “highly qualified” as defined by the program and are full-time math or science teachers in an eligible school. Teachers working in special education that meet specific requirements may also qualify to have $17,500 forgiven.

Teachers are eligible to receive up to $5,000 if they are a “highly qualified” full-time elementary teacher or a full-time secondary school teacher in all other subject areas.

What does “highly qualified” mean? That the borrower has a bachelor’s degree, full state certification as a teacher, and their certification or licensure requirements were not waived on an emergency, temporary, or provisional basis.

If you apply for Teacher Loan Forgiveness, you can’t also apply for Public Service Loan Forgiveness (PSLF) for the same period. So if you receive Teacher Loan Forgiveness, the five-year period of service that supported your eligibility will not count toward PSLF.

How to apply:

Teachers are not eligible to apply until they have completed the five years of service. After completing this requirement, borrowers can fill out the Teacher Loan Forgiveness Application. (It may be helpful to get acquainted with the application now, because it clearly explains who qualifies for what amount of forgiveness.)

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Public Service Loan Forgiveness Program

Amount forgiven:

Up to 100% of the remaining loan balance.

Which loans qualify:

Direct Loans, also known as Stafford Loans, and Direct Consolidation Loans.

Qualifications:

• Must be in certain public sector jobs and employed full-time

• Must have made 120 qualifying payments (this takes 10 years if the borrower makes them consecutively)

• Payments must be made as part of an income-driven repayment plan

• Existing student loans cannot be in default

Details:

Unlike with the Teacher Loan Forgiveness Application , teachers don’t need to teach for a low-income school or within a particular academic subject when applying for the Public Service Loan Forgiveness Program (PSLF).

To be eligible for this program, the borrower must be employed by the local, state, or federal government, or work for certain nonprofit organizations that provide a qualifying public service — such as general education services.

To qualify for PSLF, borrowers must be on an income-driven repayment plan. With an income-driven repayment plan , borrowers are only required to pay a certain percentage (between 10 and 20%) of their discretionary income toward their monthly student loan payments.

Sometimes, there is confusion about whether forgiven loan balances are taxed. If a borrower meets the qualifications for PSLF, the forgiven amount will not be taxed. For borrowers who are on an income-driven repayment plan and expect their loans to be forgiven after 20 or 25 years (but are not participating in the PSLF program), it is possible that the forgiven amount will be taxed as income. To understand more about these tax nuances, consult a licensed tax advisor.

To qualify for PSLF, the 120 qualifying monthly payments do not need to be consecutive. For example, if a borrower has a period of employment with a non-qualifying employer, they will not lose credit for any prior qualifying payments made with a PSLF-approved employer.

While it is possible to partake in both the Teacher Loan Forgiveness Program and PSLF, it’s not possible to do so concurrently. Your five years of service under the Teacher Loan Forgiveness Program does not count toward your qualification for PSLF — you will have to qualify for PSLF under a different period of teaching service. Furthermore, payments made when working toward the Teacher Loan Cancellation Program will not qualify for PSLF — you will have to make 120 additional qualifying payments for the PSLF program.

To apply:

Borrowers may want to fill out the Public Service Loan Forgiveness (PSLF) form with the PSLF Help Tool to be certain that their employment qualifies for the program. Once received by the Department of Education, the borrower will receive a response telling them whether or not they qualify, and if they don’t, what needs to be done to qualify. If the borrower does qualify, the DoE will tell them how many qualifying payments have already been made and how many need to be made.

Every time a borrower changes jobs, they’ll need to send in an updated Employment Certification form. Otherwise, borrowers will be required to submit an Employment Certification form for each of their previous employers when they apply for forgiveness.

Once a borrower has received notification that their PSLF Employment Certification has been approved, they’ll need to continue making those on-time student loan payments. After making 120 payments, they can apply for forgiveness.

Perkins Loans Cancellation for Teachers

Amount forgiven:

Up to 100% of the loan, done in increments over a five-year period.

Which loans qualify:

Federal Perkins Loans (The Federal Perkins Loan program expired in September 2017, but loans disbursed through the program may still qualify.)

Qualifications:

A minimum one year of teaching and at least one of the following requirements:

• Teaching at a low-income school; search for a school in this directory

• Teaching science, math, foreign languages, bilingual studies, or special education

• Teaching a subject that has a shortage of qualified teachers in your state

• Teaching in a school operated by the Bureau of Indian Affairs or on a qualifying Indian reservation

Details:

Those who are eligible for the Perkins Loans Cancellation for Teachers may have all of their Perkins Loans forgiven. Cancellation happens in stair-step increments over five years. Here’s how the incremental forgiveness system works:

• 15% of the original Perkins loan balance is canceled per year for the first and second years of service

• 20% is canceled in both the third and fourth years

• 30% is canceled in the fifth year

In order to qualify for this program, an employee must work directly for the school system — qualifying is entirely contingent on position duties.

To apply:

Each school has its own process, so borrowers should contact the school that administered the Perkins Loan.

State and Local Student Loan Forgiveness Programs

Some states offer loan forgiveness programs for teachers, especially for those who work in subject areas in high demand. One place to start your search for a state and local teacher loan forgiveness program is through this database created by the American Federation of Teachers.

What About My Other Student Loans?

So far, all of the programs we’ve discussed only apply to federal loans. What can be done if a borrower has other loans (like private loans) that don’t qualify for federal teacher loan forgiveness?

One option is to look into refinancing the student loans. When a borrower refinances a student loan or multiple loans, they are essentially paying those loans off with a new loan from a new lender. Ideally, the new loan has a more competitive interest rate than the existing loan(s), which could potentially save the borrower money over the life of the loan.

Borrowers can refinance both private and federal student loans, so it is an option for teachers who don’t have loans that qualify for one of the federal forgiveness or cancellation programs.

If you refinance your federal loans, you will lose access to federal loan benefits such as access to the PSLF program and the Teacher Loan Cancellation Program. There’s always the option to refinance your private loans while keeping your federal loans separate.

The Takeaway

Teachers with federal student loans may be able to pursue loan forgiveness through programs like Teacher Loan Forgiveness or Public Service Loan Forgiveness programs. Borrowers who hold Perkins Loans may also be able to pursue Perkins Loan Cancellation for Teachers. If you also have private loans, refinancing may be a good option, though as stated above, refinancing federal loans disqualifies borrowers from government forgiveness programs.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

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Oct

2023

Student Loan Payments Are Back. Here Are All the Dates You Need to Know

By Jennifer Calonia | Fresh Out of School, Student Loans, student_loan | Comments Off

After more than three years, federal student loan payments have restarted. A lot of new changes have been enacted, such as changes to income-driven repayment (IDR) and loan forgiveness, and some actions are still in the pipeline.

Here’s what’s happened so far – and what’s still to come – for student loan borrowers.

Summer 2023: New SAVE Plan Revealed

What Happened

The Department of Education announced changes to its federal income-driven repayment plans. The Saving on a Valuable Education (SAVE) plan was introduced, replacing the current Revised Pay As You Earn (REPAYE) plan.

Partial benefits under the new repayment plan went into effect before the payment pause ended. This includes benefits that dramatically lower your monthly payment, subsidize any interest that isn’t covered by your payment, and exclude your spouse’s income for your payment calculation.

If you’re already enrolled in REPAYE, your plan should have been automatically enrolled in the new SAVE plan.

Who’s Impacted (and Who Isn’t)

Borrowers who are already under the REPAYE plan, or are interested in getting on the SAVE plan. (If you’d like to be enrolled in SAVE, you can enroll now at StudentAid.gov.)

This doesn’t affect borrowers who are on an alternative repayment plan, or those on an IDR plan who don’t wish to enroll in SAVE.

September 1, 2023: Interest Accrual Resumes

What Happened

The COVID-19 administrative pause officially ended on August 31, and interest charges on federal loans resumed on September 1.

Also, you may have received your student loan bill in September (including the payment amount and its due date), as bills were set to be sent at least 21 days before your payment is due.

Who’s Impacted (and Who Isn’t)

All borrowers with federal student loans that were included in the interest rate pause.

This date didn’t affect student loans that were ineligible for the payment and interest pause. That includes private loans and Federal Perkins Loans and Federal Family Education Loans (FFEL) that weren’t owned by the Department of Education.

One thing to keep in mind: During the payment pause, some companies left the federal loan servicing business while new ones were brought into the fold. If you haven’t already, confirm whether your federal loan servicer has changed by logging into your StudentAid.gov account or calling 1 (800) 433-3243 for assistance.

After confirming who your servicer is, create an online account on the servicer’s website to manage your repayment moving forward.

October 1, 2023: First Payments Due

What Happened

Your first payment is due in October, based on the due date stated on your loan bill. However, borrowers who graduated after March 1, 2023 will receive a full six-month grace period before their first payment is due. That means that, for instance, undergraduates who graduated in May 2023 will begin making payments in December 2023.

Who’s Impacted (and Who Isn’t)

Borrowers who left or graduated school before March 1, 2023, and who have an unpaid federal student loan balance. This doesn’t apply to federal borrowers who had non-government held Perkins or FFELs which weren’t included in the emergency forbearance action.

What You Need to Do to Prepare

If you haven’t received your bill yet, log in to your servicer’s website to access your loan to review your payment amount and due date. If you were previously enrolled in autopay before the pause, you’ll need to re-enroll in automatic payments through your loan servicer’s site.

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April 30, 2025: Last Day to Consolidate for IDR Adjustment

What Happened

This is the deadline to consolidate non-qualifying loans into a Direct Consolidation Loan to claim the one-time, temporary IDR Account Adjustment. Claiming this adjustment helps eligible borrowers get credit for past non-qualifying payments.

Borrowers who consolidate their non-qualifying loans by this time can accelerate their track toward loan forgiveness. Generally, if after the adjustment is applied, you made more qualifying payments than needed for loan forgiveness, you’ll have the amount refunded.

Who’s Impacted (and Who Isn’t)

Borrowers who are or were enrolled in an IDR plan, as well as borrowers who are participating in Public Service Loan Forgiveness (PSLF). Also, borrowers aren’t on an IDR plan yet, but want to enroll in one and have government-held Direct or FFEL Loans.

What You Need to Do to Prepare

Don’t wait until the last minute to consolidate your non-qualifying loans. Contact your federal student loan servicer ASAP to get the process started. If your non-qualifying loan is in default, you can still access this adjustment by getting your loan out of default (for instance, through Fresh Start ).

July 2025: Additional SAVE Plan Benefits Available

What Happened

The second wave of SAVE plan benefits started in July 2025. Some key benefits are even lower monthly payments, and an accelerated track toward loan forgiveness.

Borrowers who are only repaying undergraduate loans on the SAVE plan had their monthly payment reduced from 10% of their discretionary income to only 5%. Those with a mix of undergraduate and graduate loans under SAVE now pay a weighted average between 5% to 10% of their discretionary income.

Additionally, borrowers whose original principal loan balance was $12,000 or less will have any remaining loan balance forgiven after making 10 years of repayment — a much faster timeline than SAVE’s usual 20- or 25-year forgiveness period.

Who’s Impacted (and Who Isn’t)

Borrowers who are enrolled in the SAVE plan, or are interested in getting on the SAVE plan. This doesn’t affect borrowers who are on an alternative repayment plan, or those on an IDR plan who don’t wish to enroll in SAVE.

What You Need to Do to Prepare

Make sure your contact information is up to date with your loan servicer so you receive announcements as this date nears. If you want to take advantage of these benefits, but aren’t enrolled in an IDR plan, submit an IDR request to your servicer to see if you qualify for SAVE.

September 30, 2025: End of “On-Ramp” Transition

What’s Happening

The Department of Education is enacting a 12-month “on-ramp” phase from October 1, 2024 to September 30, 2025. During this time, loan accounts that don’t receive a payment won’t be penalized, and although interest will accrue, it won’t capitalize after the on-ramp expires. However, after this date, student loans that are past due on a payment will be reported to the credit bureaus, marked as delinquent or in default, and the account might be sent to debt collection.

Who’s Impacted (and Who Isn’t)

Student loan borrowers who have not made a payment since the restart of federal student loan interest and payments, and borrowers who are struggling with their student loan payment.

What You Need to Do to Prepare

No action is necessary to participate in the on-ramp. However, reach out to your loan servicer if you can’t meet your loan obligation before this date to learn about your options to avoid severe consequences.

For example, you might be able to secure a lower payment under an IDR plan or qualify for temporary deferment or forbearance.

The Takeaway

In the last few years, there have been many changes to help borrowers with federal student loan repayment. However, the many different deadlines and moving parts can make staying on top of your to-do list challenging.

Keeping these dates in your calendar can help you track, and take advantage of, valuable federal programs.

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FAQ

Are student loan payments going to start?

Yes. Interest on federal student loans that were paused during the COVID-19 administrative forbearance will resume on September 1, 2023, and payments will be due in October 2023.

Is Biden going to pay student loan debt?

Certain federal student loan borrowers might have all or a portion of their remaining unpaid student debt canceled. A new administrative action is being put into place to recalculate payment credit toward loan forgiveness for 804,000 borrowers who are enrolled in an income-driven repayment plan.

The administration’s plans to cancel up to $20,000 of federal student loans for eligible borrowers, however, was struck down by the Supreme Court. No further forgiveness actions have been announced as of this writing.

How do I find out if my student loans have been forgiven?

If you received loan forgiveness as a result of recent changes in the federal student loan system, you’ll receive a notice from your loan servicer or the Department of Education.

This might be sent via mail or electronically. Ensure that you can log in to your StudentAid.gov or servicer’s website, and your mailing address and email are correct.

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Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Sep

2023

How Time-Weighted Rate of Return Measures Your Investment Gains

By Samuel Becker | Growing Wealth, invest, Investing | Comments Off

One of the most important and most common methods investors use to measure their returns is the time weighted rate of return formula. That’s because the time-weighted rate of return measures a compound rate of growth.

The time-weighted rate of return incorporates the impact of transactions such as portfolios rebalancing, contributions, and withdrawals. That leaves investors with a clearer picture of their portfolio’s overall performance.

What Is the Time-Weighted Rate of Return?

Starting with the basics, a return on investment (ROI) is a measure of how much money investments earn, or how much they’ve grown in value. Returns can be positive or negative (if a stock loses value following its purchase, for example). But obviously, investors make decisions with the goal of earning positive returns.

A rate of return, then, is a measure of the pace at which investments are accruing value, expressed as a percentage. The higher the rate of return, the better. Essentially, it’s a measure of a portfolio’s or investment’s performance over time. Rates of return can be calculated for certain time periods, such as a month or a year, and can be helpful when comparing different types of investments.

But investment portfolios are rarely static. Many investors make contributions or withdrawals to their portfolios on a regular basis. Many people contribute to their 401(k) with each paycheck, for example, or rebalance when market moves throw their asset allocation out of whack.

During these transactions, investors are buying and selling investments at different prices and times based on their investing strategy. That can make it more difficult and complicated to calculate a portfolio’s overall rate of return.

That’s where the time-weighted rate of return formula becomes useful. In short, the time-weighted rate of return formula takes into account a portfolio’s cash flows, and bakes in their effect on the portfolio’s overall returns. That gives investors a better, more accurate assessment of their portfolio’s performance.

That’s why the time-weighted rate of return calculation is, for many in the financial industry, the standard formula for gauging performance, over both the short- and the long-term.

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The Time-Weighted Rate of Return Formula

The time-weighted rate of return formula can look intimidating for even seasoned investors, but it’s an important step in building and maintaining an investment portfolio. But like many other financial formulas, once the variables are identified, it’s a matter of plug-and-play to run through the calculation.

First, let’s take a look at the basic portfolio return calculation:

Basic portfolio return = (Current value of portfolio – initial value of portfolio) ÷ initial value

While this formula provides a value, it assumes that an investor made one investment and simply left their money in-place to grow. But again, investors tend to make numerous investments over several time periods, limiting this calculation’s ability to tell an investor much about their strategy’s effectiveness.

That’s where the time-weighted rate of return comes in. In essence, the time-weighted formula calculates returns for a number of different time periods — usually additional purchases, withdrawals, or sales of the investment.

It then “weights” each time period (assigns them all roughly equal importance, regardless of how much was invested or withdrawn during a given period). Then, the performance of each period is included in the formula to get an overall rate of return for a specified period.

Calculating the time-weighted rate of return over the course of a year, for instance, would include the performance from each individual month. And, yes, that’s a lot of math. Computers and software programs can help, but it’s also doable the old-fashioned way.

This is what the time-weighted rate of return formula looks like:

Time-weighted return = [(1 + RTP1)(1 + RTP2)(1 + RTPn)] – 1

There are variables needed to calculate the equation:

n = Number of time periods, or months
RTP = Return for time period (month) = (End value – initial value + cash flow) ÷ (initial value + cash flow)
RTPn = Return for the time period “n”, depending on how many time periods there are

Let’s break it down again, and assume we’re trying to calculate the time-weighted return over three months. That would involve calculating the return for each individual month, three in all. Then, multiplying those returns together — “weighting” them — to arrive at an overall, time-weighted return.

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How to Calculate Time-Weighted Rate of Return

To run through an example, assume we want to calculate a three-month, time-weighted return. An investor invests $100 in their portfolio on January 31. On February 15, the portfolio has a value of $102, and the investor makes an additional deposit of $5. At the end of the three-month period on April 30, the portfolio contains $115.

For this calculation, we wouldn’t think of our time periods as merely months. Instead, the time periods would be split in two — one for when a new deposit was made. So, there was the initial $100 deposit that would constitute a time period that ends on February 15. Then a second time period, when the $5 deposit was made, which constitutes a second time period.

With this information, we can make the calculation. That includes calculating the return for each time period during our three-month stretch. So, for time period one, the basic formula looks like this:

Return for time period = (End value – initial value + cash flow) ÷ (initial value + cash flow)

Now, we plug in our variables and calculate. Remember, there was no additional cash flow during this first period, so that won’t be included in this first calculation.

Time period 1:
($102 – $100) ÷ $100 = 0.02, or 2%

Then, do the same to calculate time period two’s return:

Time period 2:
[$115 – ($102 + $5)] ÷ ($102 + $5) = 0.074, or 7.4%

Now, take the returns from these two time periods and use them in the time-weighted rate of return formula:

Time-weighted return = [(1 + RTP1)(1 + RTP2)(1 + RTPn) – 1

With the variables — remember to properly use percentages!

TWR = [(1 + 0.02) x (1 + 0.074)] – 1 = 0.95, or 9.5%

So, the time-weighted return over this three-month stretch (which included two time periods for our calculation), is 9.5%. If we had simply done a basic return calculation, we’d reach a different number:

Basic portfolio return = (Current value of portfolio – initial value of portfolio) ÷ initial value
$115 – $100 ÷ $100 = 0.15, or 15%

That 15% figure is too high, because it doesn’t account for cash flow. In this case, that was a $5 deposit made in mid-February. The basic return formula folds that into the overall return figure. The time-weighted calculation gives us a more accurate return percentage, and one that accounts for that mid-February deposit.

Other calculations

While the time-weighted rate of return is an important measurement, it’s not the only way to look at a portfolio’s returns. Some investors may also choose to evaluate a portfolio or investment based on its money-weighted rate of return. That calculation is similar to the time-weighted rate of return because it incorporates inflows and outflows, but it does not break the overall investment period into smaller intervals.

Another common measure is the compound annual growth rate, (CAGR), which measures an investment’s annual growth rate over time and does not include the impact of inflows and outflows.

The Takeaway

Having an accurate, timely view of a portfolio’s performance is critical for understanding current investments, planning future investments, and considering changes to your asset allocation. While other rate of return calculations can be useful, it’s important to understand their limitations.

The time-weighted rate of return formula is helpful because it takes into account the numerous inflows and outflows of money over various time periods. Armed with that insight, investors can adjust their strategy to try to increase their rate of return. That may mean reallocating or rebalancing their portfolio to include more aggressive investments or less risky securities.

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Sep

2023

You Can Still Put Off Repaying Your Student Loans. Should You?

By Jennifer Calonia | Fresh Out of School, Student Loans, student_loan | Comments Off

After years of paused federal student loan payments in response to the COVID-19 emergency, payments are starting up again. Interest charges started accruing in September, with first payments due in October.

While some borrowers are financially prepared to make their payments, not all are. If you’re worried about your upcoming federal student loan payment, you have options. A couple of student loan relief programs — the SAVE Plan and on-ramp period — are available to help eligible borrowers ease back into their payment obligations.

SAVE Plan

The Saving on a Valuable Education (SAVE) Plan is a new income-driven repayment (IDR) option that offers the lowest monthly payments among all IDR plans to a wider group of borrowers. In fact, under this repayment plan, more borrowers qualify for a $0 monthly payment.

It replaces the existing Revised Pay As You Earn (REPAYE) Plan and those who are on REPAYE will automatically be transferred to SAVE.

How Does the SAVE Plan Work?

The SAVE Plan offers various benefits that offer immediate relief, although the full advantages of SAVE rolls out in two parts. The second wave of benefits is expected to go into effect in July 2024.

Like all IDR plans, SAVE calculates borrowers’ monthly payments, based on their income and family size. The main advantage of SAVE, however, is its increased income exemption for the payment calculation.

Other IDR plans determine your discretionary income by calculating the difference between your annual income and 100- or 150-percent of your state’s poverty guideline for your family size. The SAVE Plan raises the exemption from REPAYE’s 150 percent of the poverty line to 225 percent. This results in more eligible borrowers having a calculated monthly payment of $0.

If you qualify for a $0 monthly SAVE payment, you’ll need to recertify your income and family size. The SAVE Plan lasts 20 or 25 years, depending on whether you have undergraduate or graduate debt. After the plan term ends, your remaining balance is forgiven.

Other SAVE Plan features

• Any unpaid interest accrued each month is entirely subsidized by the Department of Education.

• Married borrowers can also now exclude their spouse’s income from the plan’s payment calculation. Not having to report your spouse’s income improves your chances at a lower payment.

Some borrowers who are enrolled in SAVE can also look forward to even lower payments 2024 when the remaining benefits are enacted.

Firstly, the program provides a fast track toward student loan forgiveness which also goes into effect. For example, borrowers whose original principal balance was $12,000 or less and have made 10 years of payments will have any remaining balance forgiven.

Other benefits include being automatically enrolled in IDR after 75 days of non-payment thus avoiding delinquency, and receiving credit for past months of non-payment, like during forbearance, which usually don’t count toward forgiveness.

SAVE Plan Eligibility

The only eligibility requirement for enrolling in the SAVE Plan is that you must have eligible student loans, and the loans can’t have been a parent PLUS Loan.

Eligible loans include Direct subsidized and unsubsidized loans, graduate or professional PLUS loans, and Direct Consolidation Loans that don’t include parent PLUS Loans.

If you choose to undergo a Direct Consolidation Loan first, the following federal loans might also be eligible:

• Federal Perkins Loans

• Subsidized and unsubsidised Stafford Loans via FFEL Program

• Graduate or professional FFEL PLUS Program Loans

• FFEL Consolidation Loans that didn’t include parent PLUS Loans

SAVE Plan: Pros and Cons

Generally, the SAVE Plan is expected to be the most advantageous of all income-driven repayment plans. Although there are a handful of benefits, there are still some potential downsides to consider.

Pros

• Offers lowest or $0 payment option. SAVE’s new poverty line adjustment broadens the exemption for borrowers who can qualify for a zero-dollar monthly payment.

• Caps interest. Interest in excess of a borrower’s calculated payment will not be charged, preventing your loan balance from growing.

• Faster progress toward loan forgiveness. The new approach to how past non-qualifying payments and non-payments are counted toward forgiveness helps borrowers get out of debt faster.

• Helps avoid delinquency or default. The SAVE Plan offers a long-term solution for low or no payments to avoid the impact of delinquency or default.

Cons

• Only the lowest income earners get $0 payment. Not all borrowers qualify for $0 payments. Payment amounts are based on income and family size; for example, a single borrower who earns $32,800 or less won’t have a payment requirement, but your payment amount increases as you earn more.

• Requires annual recertification. Like all IDR plans, you must recertify your income and family size each year, and if you don’t, you’ll be removed from the plan. (Note, however, that auto-recertification will be available starting in July 2024, saving plan participants from having to manually re-submit their income every year.) As with any IDR plan, the result of the recertification may be that your monthly payment amount may change if your income increases over time. If your income rises enough, it may transpire that SAVE no longer offers the lowest monthly payment as compared to other repayment plans or refinancing options.

• Faces political opposition. Critics of the SAVE Plan argue that the new repayment option is unfair and is an overreach of presidential powers. With the SAVE Plan still in its infancy, there’s no telling where it will land in the following months.

💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

On-Ramp Repayment Program

As a way to ease student loan borrowers out of the payment pause, the Department of Administration is implementing what it calls the “on-ramp repayment program”. This timeframe temporarily gives borrowers more time to sort out their financial situation before the negative consequences of non-payment takes effect.

How Does The On-Ramp Work?

The Department of Education’s on-ramp program spans 12 months. It begins on October 1, 2023 and is in effect through September 30, 2024. During this one-year period, any borrower who misses a payment, whether the first one that’s due in October or in the middle of the on-ramp, won’t be considered delinquent.

This means that the non-payment won’t be reported to the credit bureaus, and it won’t affect your credit score and ability to borrow other consumer loans or lines of credit. And if you continue to not make your monthly payments during the entirety of the on-ramp, your loan won’t go into default status. This means you can avoid debt collections and federal payouts, like Social Security benefits and tax refunds, won’t be withheld by a treasury offset.

It’s important to understand that although you’ll get short-term respite from the major consequences of non-payment, payments are still technically due and interest still accrues during this forbearance.

On-ramp program eligibility

The on-ramp repayment program is available to any borrower with unpaid federal student loans held by the Department of Education. It’s an automatic warming-up period that doesn’t require any additional steps to participate in.

The Administration advises that those who can afford to pay their student loan payments in October should plan to do so.

On-Ramp Program: Pros and Cons

The on-ramp forbearance offers an extended reprieve from making a student loan payment, if you’re not in a financial position to do so. However, there are considerations to be aware of before missing a payment.

Pros

• Interest charges won’t capitalize. Any interest charges that are unpaid won’t be added to your principal balance after the on-ramp. This prevents your unpaid loan balance from ballooning.

• Account status won’t affect credit. The non-payment data won’t be reported to credit bureaus or debt collection agencies. Taking advantage of the on-ramp timeline, won’t adversely affect your credit score or influence treasury offsets.

• Avoids delinquency or default. The on-ramp lets you keep your loan in a status that doesn’t require monthly payments, but also avoids the negative repercussions of missing payments, like debt collection and credit-related penalties.

Cons

• Interest continues accruing. Although the on-ramp forbearance defers your payment requirement, interest is still charged each month. While the interest won’t capitalize, it will still need to be paid off when the on-ramp ends.

• No progress toward forgiveness. Months of non-payment don’t earn you credit toward loan forgiveness. The on-ramp further prolongs your timeline toward having your debt forgiven.

• Account becomes delinquent after on-ramp. When the on-ramp period expires, the missed payments are still due. In addition to not moving the needle forward, accounts with missed payments after the on-ramp are considered delinquent and can affect your credit.

What To Do If You’re Worried About Payments Due In October

There’s no one federal student loan repayment solution that works for everyone. Whether you’re exploring your options because you can’t afford payments or are hoping to earn loan forgiveness along the way, everyone’s situation is different.

If the impending restart of student loan payments is looming over your shoulders, contact your loan servicer immediately. Discuss where your finances are and the relief options available to you. Addressing your student loans head on can keep your debt in good standing while avoiding more severe outcomes later.

Student Loan Refinancing

Refinancing your federal student loans is another option for student loan borrowers to consider, especially if your existing loans carry a high interest rate. If you don’t qualify for the low monthly payments of the SAVE Plan, refinancing could be another avenue to a lower monthly payment (though you may pay more interest over the life of the loan if you refinance with an extended term). It’s also important to be aware that refinancing replaces your federal student loan with a private one, which means that you’ll lose access to income-driven repayment and other federal benefits.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

Photo credit: iStock/Ridofranz

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

SOSL0923053

Sep

2023

Who’s Eligible for the Nurse Corps Loan Repayment Program?

By Rebecca Safier | Debt Payoff, Student Loans, student_loan | No Comments

Working as a nurse can be a fulfilling career with plenty of job opportunities. However, working as a nurse also requires you to meet specific educational and certification requirements, which could mean taking on student loan debt.

Fortunately, the federal government anticipated this issue, and it’s trying to put nurses in places with the most need while helping them get out of debt. If you commit to working in a high-need or shortage area for a certain period of time, you could qualify for forgiveness of your student loan debt.

The Nurse Corps Loan Repayment Program , one of the student loan forgiveness programs for nurses, can be a great help for nurses who find themselves overwhelmed by student loan debt . Read on to learn how the program works, including how much loan forgiveness it offers and how to qualify.

Requirements for the Nurse Corps Loan Repayment Program

To be considered for the Nurse Corps Loan Repayment program, there are some key requirements you have to meet. Checking off as many of the eligibility requirements as possible will give you the best chance of success.

So, what are the requirements? They include:

• Being a U.S. citizen, U.S. national, or permanent resident who is licensed as a registered nurse.

• Working full-time at one of the Critical Shortage Facilities the government recognizes in an underserved area or at a nursing school.

• Graduating with a nursing degree from an accredited nursing school in the U.S. or its territories.

Since the program is so competitive, the government gives preference to nurses with the greatest financial need. For nurse faculty applicants, it gives preference to those who work in a school where at least 50% of the students are from a disadvantaged background.

💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

Nurse Corps Loan Repayment Program Service Commitment

Many U.S. residents go without needed treatment because there’s a shortage of healthcare workers where they live. By participating in the Nurse Corps Loan Repayment program, you can realize your passion for providing care to people who really need it.

Specifically, you must commit to working in a Critical Shortage Facility full-time for two years. In some cases, nurses can elect to continue for an additional year.

Once your service commitment to the Nurse Corp Loan Repayment Program is complete, the program will pay 60% of your unpaid nursing debt. If you can get a one-year extension, the government will pay back 25% of the original loan balance. Keep in mind you’ll have to pay taxes on the amount of the loan repayment you receive.

Are There Other Loan Repayment Options for Nurses?

As a nurse, there are other repayment options worth exploring that could help you manage your student debt. Here are a few options to check out:

• National Health Service Corps Loan Repayment Program: If you’re a nurse practitioner, you can tap into this program. In exchange for working two-years at an approved site , the National Health Service Corps Loan Repayment Program provides up to $50,000 in loan repayment to full-time workers and up to $25,000 to half-time workers. If you’re selected to continue past the service term, you can get more debt paid off.

• Apply for income-driven repayment. If you’re having trouble keeping up with payments on your federal student loans, consider applying for an income-driven plan like the SAVE Plan. These plans adjust your monthly payments to a percentage of your discretionary income while extending your loan terms. If you still owe a balance at the end of your term, it will be forgiven.

• Consolidate your federal loans. Federal Direct loan consolidation involves combining your federal loans into one new loan with a new interest rate. You can also choose a new repayment plan and may qualify for terms as long as 30 years, depending on your loan amount.

Another Option: Refinancing

With competition so high for loan repayment programs, many applicants won’t be selected. And if you’re not working at a Critical Shortage Facility, you’re not going to qualify. Others may complete their service commitment, but still struggle with student loan debt. But there’s another option to consider that can help you manage student loan debt beyond the Nurse Corps Loan Payment Program or the National Health Service Corps Loan Repayment Program.

Refinancing your student loans can make sense for borrowers who are established in their careers and have built up a solid credit rating. Depending on your credit score and other factors, you could qualify for a lower interest rate than you have now.

You also have the option of choosing a fixed-rate loan or a variable-rate loan. If you like the idea of having a set payment amount, month after month, a fixed-rate loan fits the bill. If you can live with flexibility, a variable-rate loan follows the market, which means it could start lower but then rise. Of course, when rates rise, so does your payment amount.

All that said, refinancing federal student loans can have a major downside. If you refinance federal loans with a private lender, you’ll lose eligibility for federal programs, including income-driven repayment and federal loan forgiveness programs. Make sure you’re not relying on any federal benefits before refinancing federal loans, since you can’t reverse the process after it’s done.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

Explaining Student Loan Forgiveness For Teachers

Teacher Loan Forgiveness Program

Amount forgiven:

Which loans might qualify:

Qualifications:

Details:

How to apply:

Public Service Loan Forgiveness Program

Amount forgiven:

Which loans qualify:

Qualifications:

Details:

To apply:

Perkins Loans Cancellation for Teachers

Amount forgiven:

Which loans qualify:

Qualifications:

Details:

To apply:

State and Local Student Loan Forgiveness Programs

What About My Other Student Loans?

The Takeaway

Student Loan Payments Are Back. Here Are All the Dates You Need to Know

Summer 2023: New SAVE Plan Revealed

What Happened

Who’s Impacted (and Who Isn’t)

September 1, 2023: Interest Accrual Resumes

What Happened

Who’s Impacted (and Who Isn’t)

October 1, 2023: First Payments Due

What Happened

Who’s Impacted (and Who Isn’t)

What You Need to Do to Prepare

April 30, 2025: Last Day to Consolidate for IDR Adjustment

What Happened

Who’s Impacted (and Who Isn’t)

What You Need to Do to Prepare

July 2025: Additional SAVE Plan Benefits Available

What Happened

Who’s Impacted (and Who Isn’t)

What You Need to Do to Prepare

September 30, 2025: End of “On-Ramp” Transition

What’s Happening

Who’s Impacted (and Who Isn’t)

What You Need to Do to Prepare

The Takeaway

FAQ

Are student loan payments going to start?

Is Biden going to pay student loan debt?

How do I find out if my student loans have been forgiven?

How Time-Weighted Rate of Return Measures Your Investment Gains

What Is the Time-Weighted Rate of Return?

The Time-Weighted Rate of Return Formula

How to Calculate Time-Weighted Rate of Return

Other calculations

The Takeaway

You Can Still Put Off Repaying Your Student Loans. Should You?

SAVE Plan

How Does the SAVE Plan Work?

Other SAVE Plan features

SAVE Plan Eligibility

SAVE Plan: Pros and Cons

Pros

Cons

On-Ramp Repayment Program

How Does The On-Ramp Work?

On-ramp program eligibility

On-Ramp Program: Pros and Cons

Pros

Cons

What To Do If You’re Worried About Payments Due In October

Student Loan Refinancing

Who’s Eligible for the Nurse Corps Loan Repayment Program?

Requirements for the Nurse Corps Loan Repayment Program

Nurse Corps Loan Repayment Program Service Commitment

Are There Other Loan Repayment Options for Nurses?

Another Option: Refinancing

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