The largest portion of the debt loads borne by millennials came from student loan debt. Millennials had an average student loan debt of $16,725. Additionally, data indicated that approximately 330,000 students enrolled in the Repayment Assistance Plan (RAP) as a result of being unable to make their loan installments.
Eligible Candidates For Student Debt Forgiveness
A few programs are offered in Canada to assist students pay their debts. Here is a list of eligibility criteria for student debt Forgiveness:-
Student Debt Forgiveness For Extreme Interest Accrual
There are 25 million borrowers whose interest is accruing at a rate that is greater than their ability to repay it.
In the event that a borrower’s loans “currently exceed what they owed upon starting repayment” as a result of capitalization or excess interest accrual, they may be eligible for automatic student loan forgiveness of up to $20,000. This remedy may be available to all borrowers of federal loans, including those who have consolidated their debts or are in default.
If more borrowers enroll in income-driven repayment plans (like the recently introduced SAVE plan) and make less than the income thresholds—$240,000 for married couples filing jointly, or $120,000 for single people or married filing separately—all accrued interest and capital gains may be completely forgiven.
Student Debt Forgiveness For Those Who Entered Repayment 20 or 25 Years Ago
- Complete student loan forgiveness was available to borrowers with only undergraduate, government-held federal loans that commenced payments on or before July 1, 2005.
- Complete student loan forgiveness is also available to anyone with any graduate student loans and FFEL-program loans that commenced payments on or before July 1, 2000.
Student Debt Forgiveness For Those Who are Eligible For Relief Under Other Programs
This would include:-
- income-driven repayment plans
- Public Service Loan Forgiveness
- disability discharges
Student Debt Forgiveness For Those Who Went To ‘Low Value’ Institutions
Schools that failed to meet requirements for gainful employment or had low graduation rates were officially kicked out of government financial aid programs.
Student Debt Forgiveness For Personal And Financial Hardships
The Education Department indicated that the final version of this rule would reflect the personal and financial hardships.
17 possible “indicators” of hardship include:-
- low income,
- high expenses and
- other debt obligations.