How to Benefit From Federal Student Loan Forgiveness 2022

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The United States of America offers federal student loans to assist students cover their educational cost. In the future, if these loans cannot be repaid, you can benefit from various student loan forgiveness programs available. Continue reading to find out more about federal student loans and who benefits from student loan forgiveness 2022.

There are two types of student loans, federal student loans and private loans. However, the federal student loan is preferred in terms of the money available and the various repayment schemes.

Federal Student Loans are one of the financial aids available to undergraduates and graduates in the USA.

Receiving a federal student loan means you’ll have to pay back the money in the future. The government could also decide to cancel your debts through student loan forgiveness.

We’ve got you if you have no idea how to repay loans or what programs to apply for to get student loan forgiveness.

Read this article to know more about federal student loans and student loan forgiveness and who benefits from them.

What Are Student Loans?

According to Wikipedia, Student Loans in the USA are a form of financial aid intended to help students access higher education. 70% of higher education students used loans to finance some or all of their expenses in 2018.

Student Loans are also money or financial aid you get from the federal government or private lenders to help fund your education.

It can cover college expenses like tuition fees, costs of books, and living costs. The loan would be paid back later, along with its accumulated interest. 

What Are Federal Student Loans?

Federal student loans are financial aids funded directly by the federal government. These loans have lower interest rates and flexible repayment plans.

Federal student loan borrowers are undergraduates and graduates who get financial aid from the federal government to fund their educational needs.

You can only get federal student loans if your school or college is accredited. There are various types of federal student loans, and they include:

Stafford Loans

The federal direct loan program is also known as the Stafford loan. These are paid directly by the federal government. These loans are available to undergraduates and graduates.

Stafford loans can be categorized into direct subsidized and unsubsidized loans. This would help determine your maximum loan amount and interest rates.

1. Stafford Loans

The federal direct loan program is also known as the Stafford loan. These are paid directly by the federal government, these loans are available to undergraduates and graduates.

Stafford loans can be categorized into direct subsidized and unsubsidized loans. This would help determine your maximum loan amount and interest rates.

• Direct Subsidized Loan

These are loans available for undergraduates who show financial need based on their FAFSA ( Free Application For Federal Student Loan).

The federal government would pay for your interest until it is time for you to start repaying the loan. 

If you leave school or drop below a specific number of hours, you’ll get a six-month grace before you start repaying the loan and interest builds.

• Direct Unsubsidized Loan

These loans are available to undergraduates and graduates, and you don’t have to show any financial need here. 

If you get this type of loan, the federal government doesn’t cover the interest. The interest starts accumulating immediately after your school receives the loan money. 

There are limits on how many loans you can get because undergraduate and graduate Stafford loans cannot pass $138,500. Only medical students are eligible for the highest limits. 

2Direct Consolidation Loan

A direct consolidation loan simply means one payment to one servicer once a month.

Most students receive loans from different servicers every year or even every semester. This means you can have 6 to 10 loans due for repayment each repayment after graduation. 

You can make it easier by simply applying for the direct consolidation loan, and this comes with a fixed payment with flexible options based on your financial strength.

Though it reduces the stress of repaying multiple loans to different servicers every month, it could also stretch your loan repayment over a longer period.

3PLUS Loans

These loans are available for both parents and graduates. Parent PLUS loans are for parents who have dependent undergraduates, while Grad PLUS is available for graduate students.

PLUS loans are also provided directly by the federal government. Unlike the other types of loans, PLUS loans do not have maximum amounts.

They can be used to cover education expenses not covered by other financial aid. 

How Does Federal Student Loan Work?

If you want to get access to a federal student loan, you’ll have to start by filling out the Free Application For Federal Student Aid (FAFSA).

Students and parents usually share their financial information on the form, which you can then send to your schools of choice.

Make sure the schools you choose are accredited and recognized by the federal government. 

The financial aid department at each school reviews the form and the amount to figure out how much aid the student qualifies for and then sends them an “award letter” with full detail about the financial aid offer.

You can get financial aid in the form of scholarships, grants, or student loans. Federal student loans are backed by the federal government. 

What Is Student Loan Forgiveness?

Student loan forgiveness is freedom or grace from having to repay borrowed money in full or in part. It sets you free from any obligation to repay borrowed money.

If you are eligible for student loan forgiveness, you’ll have part or full sums of your loans canceled or discharged. 

Only federal direct loans are qualified for student loan forgiveness and you can earn this by working in public service.

How Does Student Loan Forgiveness Work?

Loan forgiveness generally means that your debt or part of it has been canceled. Loan forgiveness relieves you from the obligations l of repaying debt.

It is specifically applicable to U.S government-issued or government-sponsored loans, which most of the students in the country apply for.

Student Loan forgiveness does not apply to any private loan. If you want to be eligible for loan forgiveness, you’ll have to apply and until your application is approved, you’ll continue repaying the debt.

Due to the strict eligibility rules, only a few students can access loan forgiveness. The requirements depend on the type of loan. 

Loan forgiveness is mostly offered to people employed or working in public services like teachers, military, or government employees.

You should also remember that not all federal loans are eligible for forgiveness; student loans qualified for forgiveness include direct loans or Stafford loans. 

There are different types of student loan forgiveness, and they are:

1. Service Loan Forgiveness

PSLF is specifically applicable to people who work in public service occupations for either the government or a not-for-profit organization.

You can also get part or all of your debt forgiven if you can show that you’ve done volunteer jobs, military services, or medical practice.

If you want to be eligible for this program, you must make 120 qualifying payments. This means paying the minimum amount due on time. You can only make these payments while working for a qualified employer, which could be a federal, state, local government, or not-for-profit organization.

Eligible positions for this type of student loan forgiveness include nursing, military, social work, and government positions.

Until Oct. 31, 2021, the department of education expanded what type of payments on federal student loans qualify as PSLF through a limited waiver. 

Currently, Perkins loan and FFEL, late payments, and payments made on any repayment plan will subsequently count as eligible payments.

The Joe Biden administration also announced the expansion of income-driven repayment programs on April 19th, 2022.

2. Repayment Plans with Loan Forgiveness

If you are not or haven’t gotten a job in a public service organization, you can still get parts if not all of your debts forgiven, however, it would take a while. Federal income-driven repayment plans were created to assist graduates who might encounter issues making repayment within the standard 10-year time frame.

Plans under this program include:

• Income-Based Repayment

The maximum monthly payment will be 10% to 15% of discretionary income. To be eligible for this student loan forgiveness 2022, you’ll require 20_25 years of qualifying payments.

• Pay As You Earn (PAYE) or Revised Pay As You Earn (REPAYE)

The maximum monthly payment will be 10% of discretionary income. The forgiveness eligibility requires 20 years of qualifying payments.

• Income Contingent Repayment

Here payments are recalculated yearly using gross income, family size, and unique federal loan balance. They’re normally 20% of discretionary income and you need 25 years of qualifying payments to be eligible for forgiveness. Since your student loan servicer would be handling the repayment of your federal student loans, you can collaborate with the servicer to enroll in a repayment plan.

3. Specialized Loan Forgiveness Programs

If you also participate in volunteering jobs or work as a volunteer for some specific organizations, you might be qualified for additional plans that will forgive or lessen your student loans.

Some jobs that could get you qualified for this forgiveness program include:

• Army National Guard

You can get student loan forgiveness through the army national guard, through this program, you can earn up to $50,000 towards the loan. The student loans here include Perkins, Federal Direct, and Stafford loans.

• Medical and Nursing School Graduates

Getting a job as qualified medical personnel or nursing staff in underserved locations can get you eligible for loan forgiveness under some state programs.

• AmeriCorps VISTAAmeriCorps NCCCor AmeriCorps State

If you volunteer for this program, you can get up to the maximum Pell Grant award towards the repayment of qualified student loans.

You can also receive student loan forgiveness through the Teacher Loan Forgiveness Program by working as a full-time teacher in low-income schools or educational service agencies.

Who Benefits From Student Loan Forgiveness Programs?

Getting a student loan forgiveness program is determined by:

1. Neighborhood Income

Looking at those who benefit from student loan forgiveness by income, if you happen to reside in a high-income neighborhood, there are greater chances of you owing federal student loans with higher balances. While borrowers residing in low-income neighborhoods might likely owe lesser federal student loans.

The Fed’s research found that borrowers living in high-income neighborhoods would likely get about 30% loan forgiveness, while those in low-income neighborhoods would receive 25%.

They also discovered that using the $50,000 forgiveness policy, the average student loan debtor living in a high-income neighborhood would receive $25,054 in loan forgiveness, while the average borrower residing in a low-income neighborhood would receive $22, 512.


Most young people below 40 years are likely to receive student loan forgiveness. Over 60% of borrowers who receive student loan forgiveness are below the age of 40.

As a young borrower, you’re might have smaller debt balances compared to older people who have larger balances.

Older people tend to have larger balances because they’re likely to borrow for graduate schools. Those who are 60 and above only get about 6% of forgiven loans.

3Credit Score

You’re also likely to benefit from student loan forgiveness if you have a low credit score. Student loan borrowers tend to have lower credit scores compared to the rest of the population. Credit score differs amongst generations, with the older generation having a higher credit score.

Only 11% of student loan borrowers have a credit score above 760. Loan forgiveness tends to favor people with low credit scores.

If you have a credit score that is below 660 you’re likely to benefit from student loan forgiveness programs.

4Neighborhood Demographics

The Fed’s study showed that student borrowers living in majority white and majority-minority neighborhoods are likely to owe student loans.

Close to 67% of student loan borrowers live in majority-white neighborhoods. Under a $10,000 forgiveness policy, 33% of student loan forgiveness would go to majority-minority neighborhoods, while 67% would go to majority-white neighborhoods.


1. How do I get student loan forgiveness?

You can get student loan forgiveness by consolidating all your loans into one debt and then applying for forgiveness by filling out a special application.

2Who pays for student loan forgiveness?

The federal government of the United States of America pays for all or part of the debts borrowed by undergraduates or graduates.

3. What are the drawbacks of student loan forgiveness?

One of the major disadvantages of student loan forgiveness is that its policies are subject to change with the unpredictable political environment.

You shouldn’t put all your financial future on the hopes of student loan forgiveness especially if it has to do with the government.

4What can I benefit from student loan forgiveness?

You can get relief from financial obligations, it facilitates engagement in public services and volunteering jobs as well as increases disposable income or expenses.


In this article, we covered the most important information you need to know about federal student loans and student loan forgiveness 2022. There are various types of federal student loans available to both undergraduates and graduates you can apply for to foot your education cost.

Student loan forgiveness is a relief from financial obligations and the federal government handles it. You can benefit from student loan forgiveness by either working in public service occupations, volunteering jobs, or in the military.


Gregory Nyesom

I'm Nyesom Gregory, the Founder, and CEO of Examspot. My love for education and career is the drive behind this blog. I hold a bachelor's degree in Economics and Development Studies. I am an educationist, avid reader, a researcher, and data scientist.