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Students with Smaller Loans Are Getting Debt Forgiveness – What Can Graduates Who Don’t Qualify Do?
By LARREN SMITH 217 views

Students with Smaller Loans Are Getting Debt Forgiveness – What Can Graduates Who Don’t Qualify Do?

The Biden administration’s student debt forgiveness plan has recently taken a significant step forward, particularly benefiting borrowers who took out $12,000 or less in student loans. One of the key features of this plan is the accelerated timeline for debt cancellation.

Under the previous repayment plans, borrowers had to wait 20 to 25 years to qualify for loan forgiveness. However, the new initiative promises relief after just a decade of repayment.

The U.S. Department of Education has announced that it will start cancelling the debt for eligible borrowers as early as February, six months ahead of the initially scheduled timeline.

The new plan, Saving on a Valuable Education (SAVE), was introduced as the “most affordable repayment plan ever created.” It offers more favorable terms, such as a reduced forgiveness timeline for borrowers with small balances.

To qualify for early debt forgiveness, borrowers must meet specific criteria:

  • Enrollment in the SAVE plan
  • A total student loan debt of $12,000 or less
  • A repayment period of a decade or more

It is advised that individuals not yet enrolled in the SAVE plan do so promptly to expedite their eligibility for early debt forgiveness.

This initiative will positively affect specific groups, stating that it will particularly assist community college borrowers, low-income individuals, and those facing challenges in repaying their loans.

However, graduates who don’t qualify may still be struggling with their student debt or afraid to take any more financial support due to the fear of falling into more debt. What can graduate students with loans from a few years ago, that need further financial help, do in this case?

Seeking Employer Assistance

Some employers offer student loan repayment assistance as part of their benefits package. This trend is growing among companies aiming to attract and retain top talent. Graduates with smaller loans should inquire about these programs with their employers or consider negotiating such benefits during job offer discussions.

During salary negotiations or discussions about benefits, candidates can tactfully raise the topic of student loan assistance, potentially negotiating a more favorable compensation package that includes this benefit. Furthermore, graduates already employed should regularly check with their HR departments or benefits administrators to stay updated on any changes or additions to the company’s benefits offerings, ensuring they take advantage of any available assistance.

Explore Income-Driven Repayment Plans

One option for those with smaller loans is to explore income-driven repayment plans. These plans adjust monthly payments based on income and family size, relieving borrowers facing financial challenges. By enrolling in such a plan, graduate students may find more manageable monthly payments, freeing up funds for other essential expenses.

Graduates should also stay informed about any updates or changes to federal loan forgiveness programs, as enrolling in an income-driven repayment plan could impact eligibility for future forgiveness opportunities.

You should regularly reassess their financial situation and explore alternative repayment options if their circumstances change, ensuring they continue to manage their student debt effectively.

Consider Lines of Credit

Exploring lines of credit may be an option for graduate students who need additional financial support to accelerate their careers, manage low incomes, or handle emergency expenses. Consider exploring your borrowing options through a service provider like CreditFresh and take the time to learn if this is a viable option for your current financial status. This line of credit offers a flexible payment system where charges are incurred solely on the borrowed amount.

Once approved, you can request a draw online at your convenience, given you have available credit and your account remains in good standing. Managing an outstanding balance requires regular payments, usually synchronized with your pay schedule. The request process is designed to be uncomplicated, swift, and fully transparent, ensuring clarity in repayment terms without hidden costs.

While this approach requires careful consideration due to potential risks, it can provide the needed funds to cover educational expenses.

Explore Additional Sources of Income

Supplementing income through part-time work, freelance opportunities or side hustles can provide graduates with the extra funds needed to chip away at their student loan debt more quickly. With the rise of the gig economy and remote work opportunities, there are numerous ways for graduates to earn additional income outside of their primary employment. Graduates can accelerate their debt repayment journey and achieve financial freedom sooner by dedicating time and effort to exploring these alternative income streams.

However, balancing additional work commitments and personal well-being is essential, ensuring that any supplementary income efforts do not compromise overall health and happiness. Graduates should prioritize opportunities that align with their skills, interests, and schedules to maximize their earning potential while maintaining a healthy work-life balance.


Each strategy has its own set of considerations and risks, requiring careful evaluation based on individual circumstances. However, by proactively exploring these alternatives, graduates can take steps towards managing their student debt burden more effectively, paving the way for a more financially secure future.

larren SMith

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