Right after you’ve graduated, and the adventures of your post-college life begin, there comes the crushing student debt.
You are now tied to a boring job for the paycheck alone, and what happens if a misfortune befalls and you cannot pay back your debt anymore?
The pressure and anxiety of student debt age you before your time. One way to escape this is loan forgiveness.
But, is that even a possibility for an international student? It’s tough, but possible.
You have either taken a student loan in the U.S., or from your home country. There are avenues to loan forgiveness in both cases. Let’s find out how student loan forgiveness for international students works, for both government and private loans.
Handling Student Loan Forgiveness in the U.S.
Federal Loan – Highest Chances of Forgiveness
Obtaining a federal student loan is a thorny path for an international student. You can only get one if you are a citizen, or an eligible non-citizen.
If you manage it somehow, numerous paths of loan forgiveness open up for you.
There are three types of federal student loans, namely Perkins loans, direct loans, and FFEL program loans. Each puts forward unique criteria for loan forgiveness. Let’s discuss all of the avenues of federal student loan forgiveness for international students.
1. Public Service Loan Forgiveness
Available for: Direct Loans
Criteria:
- Employment by a government or a nonprofit organization.
- Working full time for a qualifying employer.
- 120 qualifying monthly payments already made under a qualifying repayment plan (like IDR).
2. Teacher Loan Forgiveness
Available for: Direct Loans, FFEL Programs, and Perkins Loans
Criteria:
- Teaching full-time for five complete and consecutive academic years.
- Working at a low-income elementary school, secondary school, or educational service agency.
3. Closed School Discharge
Available for: Direct Loans, FFEL Programs, and Perkins Loans
Criteria:
- If the college closes while the student is enrolled.
- If the college closes soon after the student has withdrawn.
4. Perkins Loan Cancellation and Discharge
Available for: Perkins Loans
Criteria:
- Teacher (special requirements)
- Early childhood education provider
- Employee at a child or family services agency
- Faculty member at a tribal college or university
- Firefighter
- Law enforcement officer
- Librarian with a master’s degree at Title I school
- Military service
- Nurse or medical technician
- Professional provider of early intervention (disability) services
- Public defender
- Speech pathologist with master’s degree at Title I school
- Volunteer service (AmeriCorps VISTA or Peace Corps)
5. Total and Permanent Disability Discharge
Available for: Direct Loans, FFEL Programs, and Perkins Loans
Criteria:
- Total and permanent body disability
6. Discharge Due To Death
Available for: Direct Loans, FFEL Programs, and Perkins Loans
Criteria:
- Death of the borrower
- Death of student on whose behalf the loan was taken (for parent borrowers)
7. Discharge In Bankruptcy
Available for: Direct Loans, FFEL Programs, and Perkins Loans
Criteria:
- In rare cases, after the declaration of bankruptcy by a bankruptcy court.
8. Borrower Defense to Repayment
Available for: Direct Loans
Criteria:
- The college has misled the borrower or engaged in other misconduct
- The college has violated state law related to the loan or the educational services that the loan was intended to pay for
9. False Certification Discharge
Available for: Direct Loans, FFEL Programs
Criteria:
- The school has falsely certified borrower’s loan eligibility
10. Unpaid Refund Discharge
Available for: Direct Loans, FFEL Programs
Criteria:
- The borrower has withdrawn, but the college hasn’t returned the required loan funds to the loan servicer
If you think you qualify, contact your loan servicer immediately.
Private Student Loan Forgiveness – Way Trickier
Unfortunately, receiving loan forgiveness for private student loans is much more complex. There are no official private student loan forgiveness programs, so there is no chartered path to follow.
Complete forgiveness is out of the question, but if you are in a tough spot, it is best to have an honest conversation with your lender. Together, you can work out a suitable repayment plan that works for both parties.
Here are some alternatives that would ease the process for you:
1. Deferments
You can apply for loan deferment if you are going back to school or entering the military. Deferment allows the borrower to put off the start date of loan payments until after they finish their degree or service. Interest continues to accrue during the deferment period.
2. Forbearance
If you’re struggling with loans due to unforeseen circumstances, such as illness or loss of employment, you can appeal to your lender for forbearance. It allows you to temporarily stop making payments. Interest continues to accrue during the forbearance period.
3. Refinancing
You can take a new loan to pay off all your old loans. This is called loan refinancing. With this, you just have one loan repayment on your hands. A financial marketplace like Credible can assist you with this.
To opt for refinancing, you will require good credit, verifiable income, low debt to income ratio, and loan information. The top advantages of this approach are:
- Lower interest rates.
- Reduced monthly payments.
- Combination of multiple loans.
- Flexible repayment tenure.
- Removal of cosigners.
Although international students can get a private student loan in the U.S, getting out of it is a can of worms. We advise you to only take one when you are sure about your ability to repay.
Managing Student Loans in Your Home Country
If you have taken a student loan from your home country to study in the U.S, loan forgiveness might be an uphill battle. You have essentially relinquished all options of higher studies within your country for the promise of a brighter future in the U.S. That promise comes with a price tag. One that your lenders might not be willing to forgo.
Having said that, a blanket statement cannot be made for all countries. Apart from usual conditions for loan forgiveness, like death and permanent disability, student loan forgiveness for international students can vary from country to country.
It’s best to check specific loan forgiveness programs within your country that apply to your respective loan. You might have to jump through some hoops, though. Don’t let that be a reason to lose hope. Our best wishes are with you.
Is A Medical Emergency Going to Write Off Your Student Debt?
Let’s discuss the worst-case scenario now. You are in the hospital and you do not qualify for loan forgiveness. So, you are now paying both your medical bills and your student debt.
Unless you are dead or permanently disabled, forget about student loan forgiveness or discharge. While you cannot control loans, you can control financial setbacks from hefty medical bills in the U.S.
International student medical insurance is your best friend through all medical emergencies.
- Head to Insubuy,
- compare and purchase a suitable plan,
- fill out the compliance form, and
- Leave the rest to Insubuy’s efficient customer service team.
The next time you fall sick, money won’t be a burden, no matter how much student debt you have. Just glance over the provider directory and choose a suitable provider. Get the treatment you deserve.
