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Because faking your own death is not a solution to legally stop paying your student loans.
Did you know that more than 40 million Americans have student loan debt? Of those borrowers, 5.5 million owe more than $50,000. I do not know about you but seeing a five-figure debt is not only causing me anxiety but taking a financial toll on me.
If you fantasize about running off to a foreign country or faking your own death just so you won’t have to pay back your student loans, know that there’s a real way out, so let’s not take drastic measures just to get our lives back.
Actually, there are eight ways, and the best part is that they’re all legal.
1. Disability Discharge
I for one don’t want to imagine the worst happening, but at times it does. One good thing, if you become disabled and cannot pay back your student debt, the Total and Permanent Disability (TPD) Discharge Program will drop all your student debt. You will not have to pay back a penny.
To see if you qualify, because not all types of loans are accepted. The program does accept most federal student loans. To apply, all you have to do is fix an application and provide the correct documentation proving that you are disabled.
2. Income-Driven Repayment
If you cannot afford your payment than federal student loan borrowers can apply for income-driven repayment or IDR. These plans, which lower student loan payments according to your income, also promise to forgive any remaining balance once the repayment period is up, which can save you thousands of dollars.
The repayment period on most IDR plans lasts between 20 and 25 years, depending on the specific plan. Student loan lawyer Joshua Cohen said the first of four existing IDR plans ― Income-Contingent Repayment ― was first launched in 1994, this means that we won’t see the first wave of loan forgiveness until 2019.
If you’ve been making payments on an income-driven plan, be sure to stick it out until the end otherwise your loan balance will not be forgiven. If you’re struggling with payments today, consider getting on an IDR plan ― just know that you’ll have to wait at least 20 years to get rid of the balance.
I want you to just remember that you will be taxed on the full forgiven amount, the year it’s discharged.
3. Your Boss Can Help
If you do not qualify for any federal programs, you can still get your loans partially paid off. The one way to do that is through your boss.
Did you know about 4% of organizations are currently helping their employees out with their loan payments? That is expected to grow rapidly this year. Employers are always trying to help out their employees, and one way is they are helping with student loans. The only negative of this is that whatever money your boss puts towards repayment will be counted as income when you do your taxes.
Your company might offer a student loan repayment benefit that you don’t know about, so be sure to find out. Some companies might not be offering this, but it doesn’t hurt to ask HR to maybe add it to their benefits package.
4. File For Bankruptcy
One thing I keep hearing about student loans is that it is impossible to discharge in bankruptcy. I think that it may be difficult to do, but certainly not impossible. This is a myth that has gone around for years, borrows just assume they cannot and do not even try to get it discharged. I would fight tooth and nail to get rid of the student debt.
Bankruptcy only stays with you for 7-10 years compared to the other options of 20 years to a lifetime to pay it off.
The key way to have these student loans discharged is to pass the Burner Test. To have student loans discharged, you must be able to prove that you wouldn’t be able to keep up a minimal standard of living due to the payments, that your situation will persist over a significant portion of the repayment period and that you’ve made a good-faith effort to pay back the loans.
Before you file for bankruptcy just remember that as soon as you do your student loans will go in default. That means that they are due now, in full.
Your best course of action if you’re considering bankruptcy? Talk to a lawyer.
Student loan debt is a major responsibility, and it’s also a growing crisis among graduates. You should always only take what you know you can pay back, but if there is a chance to get out of paying your loans, there is nothing wrong with taking it.
5. A Career In Public Service.
One of the fastest ways to get rid of student debt is to work in the Public Service, that way you can apply for Public Service Loan Forgiveness or PSLF. This loan requires you to work for a qualifying employer. If you do not want to wait 20-25 years to pay off your debt this can be another avenue to getting rid of your student loans.
The best part is you won’t be taxed on the amount forgiven. You do have to spend 10 years at a nonprofit or government job. This can mean lower pay for those 10 years.
And though the Donald Trump administration has proposed significant cuts to both IDR and PSLF in the budget proposal and PROSPER Act, any changes would only apply to new borrowers as of July 1, 2019. In fact, 2018 is the first year borrowers have been eligible to have their loans forgiven under PSLF ― and at least one person already has had his loan forgiven.
So if you’ve been working a low-paying job as a public servant while paying off your student loans, you could be rewarded with a tax-free gift from Uncle Sam.
6. Serve your country
In addition to PSLF, there are more programs for those who have served in the military. Each branch has its own set of programs such as the Air Force College Loan Repayment program and the Army Student Loan Repayment program. Of course, joining the military just to get your student loan debt forgiven may not be the smartest move. But if you’re currently serving or considering enlisting, loan forgiveness sure is a nice perk.
If the military isn’t your thing, volunteering your time with AmeriCorps or Peace Corps can also result in loan forgiveness.
7. Loan Repayment Assistance Programs (LRAPs)
Loan repayment assistance programs can help borrowers get some or all of their student loans forgiven.
Many states are willing to help you pay off your student loans if you have certain skills that you can share. This includes programs for teachers and health care providers as the most popular forgiveness programs for student loans.
To qualify, borrowers are often required to work in high-need areas for a certain period of time. This could mean a less-than-desirable location and lower pay. Additionally, many of these programs will tax you on the forgiven debt.
If you have a large amount of debt, an LRAP could provide you much-needed relief. Check out this LRAP search tool to find a program in your location and career field.
Just about everything has been gameified these days, it is no surprise that student loan repayments have as well. Giving is a web-based game that rewards winners by paying off a portion of their student loan or mortgage debt.
How the game works is players get two free rounds every 24 hours. After that, each play costs $0.50. When you join around, you’re assigned to a three-person team and compete in a fast-paced trivia game for points. Members of the highest-scoring team are awarded a cash prize.
Giving is definitely more of a gamble than getting your loans forgiven through a federal program. But if you’re dealing with burdensome debt, it could be worth a shot.