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”.

1. You can upload the mystudentdata.txt file to our custom calculator at app.hopecredit.us.
2. You can then see all of your federal student loans.
3. 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.
4. The analysis available at app.hopecredit.us will also show:
   • how old your student loans are
   • 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

1. Get your hands on your student loan data file (mystudentdata.txt).
2. Upload the file to app.hopecredit.us.
3. Take some time to review your loan history and details.
4. Find a reliable taxable gross income number for the last 3 months from either your tax return, pay stubs, or self employment income.
5.  Click to schedule some time with a Hope Credit enrollment advisor to talk through your options.