Student Loans

• Student Loan Empowerment Network (SLE Network): helps California residents navigate loan repayment. Anyone residing in the state can call (888) 774-2227 or complete an online intake form to receive free, one-on-one services related to managing debt, entering repayment, and financing a future education.  The SLE Network is a partnership between the California Department of Financial Protection and Innovation (DFPI) and 14 community-based and legal aid organizations. For more information and to access support, visit the SLE Network website. 
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• San Francisco Financial Counseling program: provides free, confidential, one-on-one financial guidance – including help with student loan repayment. 
   
• Free Consumer Rights Legal Clinics  (provided by Bay Area Legal Aid): offers assistance with student loan debt problems, including default, income-driven repayment, disability discharge, and other issues. To access support, visit their site or call them at 800-551-5554.
   

• The National Consumer Law Center’s Student Loan Borrower Assistance Project :publishes resource for borrowers and families such as their Student Loan Toolkit, which is a great starting point for those navigating challenges related to repayment.

San Francisco Financial Counseling, formerly known as Smart Money Coaching, has helped nearly five thousand people to address their unique financial challenges and goals, including reducing more than $4 million in debt, establishing credit, improving their credit score an average of 70 points, opening low-fee checking and savings accounts, and increasing savings by nearly $700,000.

Our financial counselors:

• Come from our communities and have similar lived experiences as the people they serve,
• Trust that their clients are the best judges of their own financial situations and needs,
•  Won’t tell you how to spend your money, and instead will empower you to make informed decisions, and
• Are trained by experts, make referrals to trusted community partners, and can escalate issues to City leadership if needed.

Read more about how San Francisco Financial Counseling creates meaningful and life-changing financial outcomes for our community in a report highlighting the five most important lessons we’ve learned since the program launched.

Additionally, stay tuned for the upcoming release of our newest report chronicling the first eight years of San Francisco’s Financial Counseling program, Building On Success: Celebrating Impacts of Smart Money Coaching and Introducing a New Chapter.

A number of current programs enable borrowers to have their loans partially or fully discharged, including:

• Public Service Loan Forgiveness (PSLF) - for full-time government or nonprofit employees who are in repayment for 10 years.
• Income-Driven Repayment (IDR) Forgiveness - for borrowers who have been in repayment for 20-25 years (depending on their loan type and particular repayment plan) under an Income-Driven Repayment (IDR) plan.
  • SAVE Plan- borrowers who took out $12,000 or less and enroll in the new SAVE plan are eligible to have their loans discharged after 10 years in repayment. For every additional $1,000 borrowed, borrowers must remain in repayment for an extra year.
• Borrower Defense to Repayment andClosed School Discharge - for borrowers who took out loans to attend an institution that misled or lied to secure their enrollment or that shut down during or soon after they enrolled.
• Total and Permanent Disability (TPD) Discharge—for borrowers who have a disability that severely limits their ability to work, both now and in the future.
• Teacher Loan Forgiveness (TLF)—for teachers who meet certain criteria including having taught for five consecutive years. Note: this program provides up to $17,500 in loan relief but will reset a borrower’s eligibility for Public Service Loan Forgiveness, meaning that payments credited towards TLF will not also count for PSLF eligibility.

Visit Federal Student Aid’s website for a complete list of pathways to receive student loan relief.

Since the U.S. Supreme Court struck down the Biden Administration’s broad-based loan debt relief plan, the Department of Education has announced that it is exploring alternative paths to provide debt relief to certain borrowers who have difficulty repaying.

In April 2024, the Education Department released a proposal to provide relief to borrowers who:

• Owe more than they did when they entered repayment.
• Have been in repayment for more than two decades.
• Missed out on certain forgiveness programs for which they would have been eligible.
• Borrowed to attend certain institutions that either closed or provided low-quality services.

This proposal has not yet been implemented, but future updates will be available on the Education Department’s website.

Borrowers working in non-profit and government jobs can qualify to have their outstanding student loans discharged after 10 years in repayment. For more information, and to submit an application, visit this site.

To access this benefit, borrowers must:

• Work full-time for a qualifying public service employer.
• Have Direct loans (or have consolidated their federal student loans into a Direct loan).
• Make 120 monthly payments (the equivalent of 10 years). Payments need not be consecutive, but borrowers must meet eligibility requirements for the month in which they made a payment for it to qualify.

Check out our Public Service Loan Forgiveness resources here.

Most borrowers are eligible to enroll in an Income-Driven Repayment (IDR) plan, which allows them to make monthly payments based on their income and family size.

Recently, the Department of Education launched the Saving on a Valuable Education (SAVE) plan, which offers the lowest monthly payments of all current repayment options.

If you qualify, and your income is below a certain threshold, you may even be eligible for $0 payments (which still count toward eligibility for current loan forgiveness programs).

Find out more and enroll in an income-driven repayment plan here.

Note: In July 2024, the SAVE Plan was suspended by a court decision, pending further appeals. The Department of Education is assessing the ruling and will be in touch directly with borrowers about how this will affect them. As of July 19, borrowers enrolled in SAVE will be placed in interest-free forbearance. At this time, those not already enrolled in SAVE are unable to apply for this repayment plan.

The Saving on a Valuable Education (SAVE) plan is a new type of Income-Driven Repayment (IDR) plan, which has replaced REPAYE.  Borrowers enrolled in SAVE make monthly payments based on their current income and family size. This plan provides significant benefits to lower income borrowers, including the lowest available monthly payment.

Borrowers enrolled in SAVE have the greatest share of their income protected when their monthly payment amount is calculated (225% of the federal poverty line). For example, a CA borrower with a family size of two would have their first $44,370 of income disregarded—If they earn less than $44,370, their monthly payment would be $0.

Once fully implemented, the SAVE plan will also support low-income borrowers through the following provisions:

• Reducing monthly payments to 5% of discretionary (none-protected) income for borrowers with loans taken out for undergraduate study, which is half of the level used by the most generous current IDR plans (a CA borrower with a family size of 2 repaying undergraduate loans would pay 5% of their income above $44,370).
• If a borrower’s monthly payment is less than the interest they accrued for that month, the difference between these amounts is subsidized. As a result, borrowers who pay what they owe on time will no longer see their outstanding balance grow.
• Borrowers who took out $12,000 or less in federal student loans can access a new path to have their loans discharged after 10 years in repayment (120 monthly payments including months during which a borrower had a $0 payment). For every $1,000 in original student loan debt above $12,000, borrowers must be in repayment for an additional year before their outstanding balance is canceled. Regardless of the original debt level, all borrowers enrolled in SAVE qualify for full cancellation after repaying for 20-25 years, depending on whether the loans were taken on for undergraduate or graduate study.

For more information on the SAVE plan and other IDR plan options, visit Federal Student Aid’s website.

Note: although SAVE is the most affordable plan for low-income borrowers having trouble repaying, it may not be the best option for you. You can use Federal Student Aid’s Loan Simulator to compare options and select the plan best suited to your needs.

For a limited time, most borrowers who defaulted on their federal student loans can access Fresh Start to return their loans to good standing.

Fresh Start is a one-time program offered by the Department of Education. To qualify, borrowers must act before October 1, 2024 to exit default.  Borrowers must contact the entity that currently “holds” their loans. If you’re unsure who this is, call 1-800-621-3115.

For loans held by the Department of Education, borrowers can reach out online, by phone (1-800-621-3115), or by mail (P.O. Box 5609, Greenville, TX 75403). Learn about Fresh Start and get instructions on how to sign up here.

Borrowers who enroll in Fresh Start qualify for the following benefits:

• Restored access to federal loans and grants.
• End to withholding of tax refunds, wage garnishment, withholding of Social Security payments, and collection calls.
• Restored eligibility for certain government-backed loans such as mortgages.
• Access to Income-Driven Repayment (IDR), student loan forgiveness—such as Public Service Loan Forgiveness (PSLF), and short-term relief—such as forbearance and deferment.

More information about exiting default (once Fresh Start has ended) is available here.

You can find information about current loans and identify your loan servicer by logging into StudentAid.gov using your Federal Student Aid (FSA) ID. If you haven’t logged into the Federal Student Aid website since May 2015, you probably don’t have an FSA ID, but can easily create one.

To manage your student loan payments, enroll in a different repayment plan, or take other actions such as requesting a forbearance or deferment, log into your student loan servicer’s website.

The Office of Federal Student Aid’s Loan Simulator tool can help to estimate monthly payments under various plans and choose a repayment option tailored to your needs and goals—such as qualifying for Public Service Loan Forgiveness, making the lowest monthly payments, or minimizing costs over the life of the loan. It can also help you determine whether to consolidate your student loans.

Access the tool here.

If you are entering repayment for the first time, you will need to:

• Update your contact information on StudentAid.gov as well as your loan servicer’s website (you can identify your servicer by logging into StudentAid.gov).
• Choose a loan repayment plan best suited to your needs. You can compare plans using Federal Student Aid’s Loan Simulator.
• Enroll in autopay or manually make a payment on your loan servicer’s website.

The Office of Federal Student Aid offers further guidance on what to expect and important actions to take.  Access step-by-step guidance, FAQs, and get support here.

If you left school within the past 6 – 9 months, you may still be in your automatic grace period, meaning that payments are not yet due (note: depending on the type of loans borrowed, interest can still accrue during this time).

The U.S. Department of Education announced it would conduct a one-time adjustment to accurately reflect borrowers’ progress toward Income-Driven Repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF).

The adjustment is ongoing and expected to conclude by September 1, 2024. Some borrowers have already been notified that they have loans that qualify to be discharged—no further action is required unless specified by the Education Department or loan servicer. Others may face a smaller number of outstanding payments to qualify for relief because of the adjustment.

Borrowers with certain older loans, such as privately held FFEL and Perkins loans must have applied for a Direct Consolidation Loan by June 30, 2024, to qualify.

To ensure that you receive information related to the Payment Count Adjustment, make sure to keep your contact information up to date with your loan servicer and on StudentAid.gov

As borrowers return to repayment, the Department of Education has created a temporary “on-ramp,” during which some of the consequences on nonpayment will be lessoned. This period is set to expire on September 30, 2024. 

For most borrowers, payments are now due, and interest will continue to accrue. However, during the “on-ramp” unpaid interest will not capitalize (be added to the outstanding loan principal). Additionally, borrowers will not be reported to credit bureaus, considered in default, or referred to collection agencies for late, missed, or partial payments.

Borrowers who can pay should do so, but the on-ramp period affords others the necessary time to adjust. Borrowers do not need to take any action to qualify for these benefits.

Those concerned about their ability to make monthly payments should consider enrolling in the SAVE Income-Driven Repayment plan, which option offers the lowest available monthly payments based upon income and family size.