Having trouble repaying student loans? These resources can help NC borrowers.
Student loans can be overwhelming. If you feel that way, you’re not alone — 1.3 million people in North Carolina have student loan debt totaling $48 billion, according to the Center for Responsible Lending.
While there’s no perfect debt-relief solution, there are resources out there to help borrowers manage and repay their loans. Here are some of the government and nonprofit programs available to North Carolina residents.
Government programs
Public Service Loan Forgiveness
What it is: A federal government program that forgives student loans for full-time employees of any level of government (federal, state, local or tribal) or 501(c)(3) non-profit organizations.
To qualify, you must have already made at least 120 payments that meet certain criteria.
Only Federal Direct Loans are eligible for forgiveness through this program. Loans from the Federal Family Education Loan Program and the Federal Perkins Loan Program don’t qualify, but restructuring them as a Direct Consolidation Loan could make them eligible.
Private loans are not included in this program.
How it can help you:
The Department of Education has suspended some rules for qualifying payment types through Oct. 31, in an effort to get more people closer to loan forgiveness.
Check out the Help Tool to see if you qualify and learn what next steps to take.
Teacher Loan Forgiveness
What it is: A federal government program that forgives student loans for teachers who have worked at least five consecutive years at a low-income school or other educational organization.
Check the Teacher Cancellation Low Income Directory to see if your school or educational organization is considered low-income.
You must meet the requirements to be a highly qualified teacher in order to be eligible.
How it can help you:
The program forgives up to $17,500 for math, science and special education teachers on Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans. Teachers of other subjects are eligible for up to $5,000 forgiveness.
Income-driven repayment plans
What it is: An income-driven repayment plan takes into account your income and family size to make monthly payments more affordable. The federal government offers four types of income-driven repayment plans. Here’s a breakdown of each one:
Revised Pay As You Earn Repayment Plan: Anyone with Direct Subsidized, Direct Unsubsidized, Direct PLUS loans for graduate students or Direct Consolidation loans that did not repay any PLUS loans to their parents is eligible. Other types of federal student loans can be consolidated to make them eligible. You pay 10% of your monthly discretionary income — money left after you’ve paid taxes and other necessary living expenses like a mortgage or rent — over 20 years for undergraduate loans or 25 years for graduate school loans.
Pay As You Earn Repayment Plan: The same eligibility requirements as the previous plan apply, though some of the consolidation options are different. You pay 10% of your monthly discretionary income, up to but not exceeding what you would pay under a 10-year Standard Repayment Plan. The repayment period is 20 years.
Income-Based Repayment Plan: In addition to the loans eligible under the previous two plans, subsidized and unsubsidized Stafford loans, FFEL PLUS loans for graduate students and FFEL Consolidation loans not repaying PLUS loans to parents are also eligible. Perkins loans are eligible if consolidated. You pay 10% of your discretionary income over 20 years if your loans are from after July 1, 2014, or 15% over 25 years if they are from before. Both payment plans go up to but do not exceed what you would pay under a 10-year Standard Repayment Plan.
Income-Contingent Repayment Plan: Anyone eligible for the first two plans is eligible, plus people with Direct Consolidation loans that did repay PLUS loans to parents. Check the list of loans that are eligible if consolidated. You pay the lesser of either 20 percent of your discretionary income or what you would pay on a repayment plan with a fixed payment over 12 years. The repayment period lasts 25 years.
Nonprofits
Student Debt Crisis Center
What it does: The organization works on two fronts: political efforts to encourage government officials to address student loan debt, and providing borrowers with resources to better understand and pay off their loans.
The crisis center partners with other nonprofits to compile a variety of resources in one place for those seeking help with their debt.
It also offers action items for those looking to get involved politically.
How it can help you:
The organization’s resources include tools in English and Spanish to better understand how to manage your loans.
You can also contact the organization with questions.
InCharge Debt Solutions
What it does: The nonprofit provides a range of debt relief services, not all geared toward student loans. Its website explains different types of debt and what resources are available to help with them.
How it can help you:
The organization offers information on different types of repayment plans and credit counseling. Counselors can help you understand loan options and manage repayment responsibly.
This story was originally published July 8, 2022 at 6:00 AM.
