Your future – what do the next 10 – 25 years look like?
Decision
Do you want forgiveness or do you want to pay off your loans?
What if you want to change your decision down the road?
What about taxes?
Maintenance
Following through on your decision year after year for 10, 20, or 25 years.
Benefiting in real time from student loan policy changes over the years.
Documenting everything.
Qualification
To determine your eligibility for different forgiveness and income based programs, the first step is to get a detailed printout of your federal student loans. You can do this by visiting studentaid.gov to download a text file known as your “student loan data file” or “mystudentdata.txt”.
You can upload the mystudentdata.txt file to our custom calculator at hopecredit.net/apply.
You can then see all of your federal student loans.
Compare these loans to all of your outstanding student loans to determine if you have any loans that may be private. Private student loans will not show up in this data file but all federal loans will. This data file is more than 99.9% accurate, with errors being extremely rare.
whether they were taken out for graduate or undergraduate studies
the entire repayment history month by month for each loan
if the loan was consolidated, and if so, on what date
Other factors that determine your eligibility for the various repayment programs
Decision
The most important decision you can make regarding your federal student loans is whether you want to pursue forgiveness or whether you want to pay your loans off.
income based programs (the forgiveness route) are only beneficial if you can anticipate periods in your life for the next 10, 20, or 25 years when your taxable income will be small enough to benefit from a lower payment while earning months toward forgiveness. This includes:
self employed people whose gross income differs substantially from taxable personal income
time in residency
periods of job transition or continuing education
pre-tax deductions and retirement contributions that lower taxable income
secure act 2.0 and IRS circular 2024-63 – recent legislation allows employers to match student loan payments to qualified retirement plan contributions dollar for dollar up to the qualified plan’s annual limits
The second most important decision you can make is your repayment program selection.
there are 9 different repayment programs
your loan details determine eligibility for some programs
your income and family size determine eligibility for some programs
your employment type (private vs. government and non-profit) determine eligibility for some programs
whether or not your loans are consolidated will determine eligibility for some programs
The third most important decision you can make is whether or not to consolidate.
consolidation can reset the clock on previously earned months toward forgiveness
consolidation can affect the number of outstanding line items on a borrower’s credit report
some programs are only available if a borrower consolidates
Maintenance
Pursuing forgiveness requires maintenance. Recertification is required yearly, and there may be other circumstances in which you will need to complete paperwork or document events throughout the year.
a downward change in taxable income entitles a student loan borrower to an immediate downward adjustment to the monthly student loan payment, which lasts for 1 year
borrowers can switch between programs as circumstances change, but there can be financial consequences to switching programs in some cases
recertification periods expire annually in most cases
the Department of Education will by default place a borrower back into the standard rate and term payment when recertification is not completed on time
options are constantly changing, and the dissemination of information regarding these changes has historically been inadequate
secure act 2.0 and IRS circular 2024-63 create massive benefits for retirement contributions when student loan borrowers make monthly payments
Next Steps
Get your hands on your student loan data file (mystudentdata.txt).
