Nelnet Student Loan Forgiveness: How to Get It

The path to student loan forgiveness can be confusing and overwhelming if Nelnet has your federal student loans. Nelnet handles a variety of federal loans, and the eligibility for loan forgiveness programs such as President Biden’s student debt relief plan, income-based repayment plan forgiveness, and the Income-Driven RepaymentIncome-Driven Repayment (IDR)A category of federal student loan repayment plans that calculate monthly payments based on income and family size rather than loan balance. Any remaining balance can be forgiven after 20–25 years of qualifying payments. Waiver depends on the type of loan.

Ahead, learn how to get your NelnetNelnetA federal student loan servicer that manages millions of Direct Loan accounts on behalf of the U.S. Department of Education. student loans forgiven.

Related: Biden Student Loan Forgiveness

What is Nelnet

Nelnet is one of five student loan servicers used by the government. Federal borrowers are assigned a loan servicerLoan ServicerThe company that manages a borrower's federal student loan account, processes payments, and handles applications for repayment plans, deferment, forbearance, and forgiveness on behalf of the U.S. Department of Education., who handles student loan administration including payments and other services for borrowers.

Nelnet services two types of student loans

Nelnet only services federal loans, but they come in two varieties:

• Ed-owned student loans
• Privately held federal student loans

Ed-owned loans are directly owned by the Department of Education and are usually Direct Loans. These loans are eligible for the Biden administration’s payment pause and interest rate freeze.

However privately-held loans are owned by private lenders or guaranty agencies and are backed by the federal government. These loans, usually Federal Family Education Loans and Federal Perkins Loans, haven’t been eligible for Covid-related forbearance and have required payments and accruing interest.

Related: Are Nelnet and Navient The Same?

What Is The Difference Between Nelnet Student Loan Forgiveness and Discharge?

Nelnet student loan forgiveness and discharge share the common purpose of absolving borrowers from their student loan debt, but they do so under different circumstances.

Student Loan Forgiveness

Student loan forgiveness is applicable either after the borrower has made a certain number of qualifying payments over a certain period under and income-driven repayment plan, or based on their profession (e.g., the Public Service Loan ForgivenessPublic Service Loan Forgiveness (PSLF)A federal program that forgives the remaining balance on Direct Loans after 120 qualifying monthly payments made while working full-time for a government or qualifying nonprofit employer. program or the Teacher Loan ForgivenessTeacher Loan ForgivenessA federal program that can forgive up to $17,500 of Direct or FFELP loans for teachers who complete five consecutive years of full-time teaching at a low-income school or educational service agency. program). These programs are based on the borrower’s service or employment situation.

Student Loan Discharge

On the other hand, student loan discharge happens under dire circumstances like permanent disability, school closure before the borrower can complete the program, or due to a case of identity theft leading to a false loan. In these cases, borrowers aren’t usually required to make any payments before the loan is discharged, unlike forgiveness.

In essence, while both result in the removal of student loan debt, the conditions and terms under which they take effect differ significantly.

Related: Student Loan Discharge

OK, So What Is The Nelnet Student Loan Forgiveness Program?

Nelnet does not have its own student loan forgiveness program. Instead, it helps administer different loan forgiveness programs that the United States Department of Education offers to federal student loan borrowers, including the following types of forgiveness programs.

Related: How to Get Parent PLUS Loans Forgiven

Types of forgiveness programs

Nelnet administers several kinds of loan forgiveness programs. These include:

Income-Driven Repayment (IDR) Forgiveness

Under this program, the remaining balance of your loan will be forgiven if your federal student loans aren’t fully repaid at the end of the repayment period. The length of this period depends on the specific plan but can be 20 or 25 years. There are four specific plans launched under the IDR umbrella that are crucial to be aware of. But first, let’s talk a little bit about the time-sensitive IDR Waiver.

The IDR Waiver

Also known as the IDR Account Adjustment gives borrowers loan forgiveness credits they’re owed for mismanagement by student loan servicers. This program also has a hidden benefit that few people know about: if you combine your newer loans with your older ones, your entire loan balance can be forgiven immediately.

But you have to apply by April 30th, 2024.

For the full rundown of this program, check out this article next.

One quick way to determine if your Nelnet loan is eligible for forgiveness is to check the first letter of your Nelnet account number. If it starts with “E,” you have Ed-owned loans that typically meet the eligibility requirements for the IDR Waiver.

But if your account starts with “D” or “J,” those may need to consolidate to qualify.

Pay As You EarnPay As You Earn (PAYE)A federal income-driven repayment plan that caps monthly payments at 10% of discretionary income and forgives remaining debt after 20 years. It is only available to borrowers who took out their first federal loans on or after October 1, 2007. (PAYE)

Income Based Repayment (IBRIncome-Based Repayment (IBR)A federal income-driven repayment plan that caps monthly payments at 10% or 15% of discretionary income, depending on when the loans were taken out. Remaining debt is forgiven after 20 or 25 years of qualifying payments.)

The Income-Based Repayment (IBR) plan is only slightly different from PAYE as it sets your monthly student loan payments at either 10% or 15% of your discretionary incomeDiscretionary IncomeFor federal income-driven repayment plans, a borrower's adjusted gross income minus a set percentage of the federal poverty guideline for their family size. Monthly IDR payments are calculated as a percentage of this amount. depending on when you took out your loans, with any remaining balance forgiven after either 20 or 25 years.

Income Contingent Repayment (ICRIncome-Contingent Repayment (ICR)The oldest federal income-driven repayment plan, with payments generally set at 20% of discretionary income or a fixed 12-year amount, whichever is lower. It is the only IDR plan available to Parent PLUS borrowers after consolidation.)

SAVE PlanSAVE Plan (SAVE)The Saving on a Valuable Education Plan, a federal income-driven repayment plan introduced in 2023 to replace REPAYE. Its implementation has been subject to ongoing litigation, and enrolled borrowers have faced court-ordered forbearance periods. Forgiveness (previously REPAYERevised Pay As You Earn (REPAYE)A former federal income-driven repayment plan that capped payments at 10% of discretionary income, with forgiveness after 20 or 25 years. REPAYE was replaced by the SAVE Plan in 2023.)

The SAVE Plan Forgiveness is a specific loan forgiveness program geared towards those who have used SAVE Plan loans to finance their education.

Eligibility criteria and the amount forgiven can vary depending on factors like employment sector, repayment history, and financial hardship. For more specifics, check out our latest YouTube video on this one or visit www.studentaid.gov/SAVE.

Related: Income-Driven Repayment

Public Service Loan Forgiveness (PSLF)

This program forgives the remaining balance on your Direct Loans after you have made 120 qualifying payments under a qualifying repayment plan while working full-time for a qualifying employer, typically a government or non-profit organization.

Even if you haven’t completed 120 payments, if you work for a qualifying employer, you’ll want to submit an Employment Certification Form to the MOHELAMOHELAThe Missouri Higher Education Loan Authority, a federal student loan servicer that currently handles accounts for borrowers in Public Service Loan Forgiveness and other federal loan portfolios. address listed on the form. Just FYI, if you do this and your qualifications are confirmed, your student loans will be transferred to MOHELA, the official loan servicer of the PSLF program.

Nelnet will likely try to suggest that you keep your loans with them while pursuing PSLF – we do not recommend keeping your student loans with Nelnet during this process.

This is because your qualifying payments for future loan forgiveness will be tracked more accurately once your loans are transferred to MOHELA. Once they reach 120 qualifying payments, borrowers can apply for PSLF by submitting the Public Service Loan Forgiveness (PSLF): Application For Forgiveness. If approved, any remaining federal student loan debt will be forgiven tax-free.

If you need more help with this book a call with me, and we’ll review your loans and the process together.

Related: Public Service Loan Forgiveness

Teacher Loan Forgiveness

Also known as the Perkins LoanPerkins LoanA low-interest federal student loan for borrowers with exceptional financial need, issued by schools under a now-discontinued program. New Perkins Loans have not been made since 2017, but many existing balances are still in repayment. Cancellation and Discharge program, this forgiveness option provides full or partial loan forgiveness to eligible teachers with Nelnet-serviced student loans. Depending on the subject taught, they may be eligible for up to $17,500 or $5,000 in loan forgiveness. However, specific requirements must be met:

• Full-time employment for five consecutive years as a highly qualified teacher,
• Completion of those years in a qualifying low-income school or educational service agency after the 1997-98 academic year,
• Having obtained your loan before the end of your five academic years of service.

It’s important to note that the Public Service Loan Forgiveness (PSLF) provides an alternative route for loan release, and depending on your total debt amount, it may offer a more beneficial option. Hence, both programs should be considered closely to identify the best solution for you.

To chat about it, book a call with me, and we’ll review your loans and the process together.

Related: Teacher Loan Forgiveness

How to Qualify for Nelnet Loan Forgiveness

While the specifics of each forgiveness program can vary widely, all are designed to help ease the burden of student loan debt for those who have devoted their careers to serving others or who have financial hardship, the requirements of which are outlined above.

For the record, the decision for forgiveness comes from federal programs established by the U.S. Department of EducationU.S. Department of Education (ED)The federal agency that oversees federal student aid programs, issues regulations for federal student loans, and is the ultimate lender on Direct Loans. as opposed to from the loan service company.

There are also programs designed to relieve student loan debt based on circumstances outside of your control. These are called discharge programs and are detailed a little bit further on.

Related: Student Loan Forgiveness

How to Apply For Loan Forgiveness

The application process for Nelnet Loan Forgiveness can vary depending on the specific program. Generally, here are some steps to follow:

Step 1: Determine Eligibility. First, determine which forgiveness programs you may be eligible for. This could be based on your occupation, loan repayment plan, or financial hardship.

Step 2: Complete the relevant form. Print and fully complete the forgiveness application form for the relevant program. Each form is specific to its program, you can get those forms from Nelnet or on StudentAid.gov.

Step 3: Employer certification. For programs like PSLF, you will need to get your employer’s certification. The form usually requires your employer’s signature and verification of your employment dates and full-time status.

Step 4: Submit the Form. Once the form is completed and signed, submit it as instructed. Some programs require annual submission, while others require submission every time you change employers.

Step 5: Follow up with Nelnet. After you submit your application, Nelnet will inform you if they require additional documentation from you. They will also confirm whether or not your loans qualify for forgiveness.

Note that while applying, you must continue making your student loan payments until you receive confirmation of approval for loan forgiveness.

Types of Nelnet student loan discharge

Bankruptcy Discharge

While it’s rare, you might qualify for a discharge if you file Chapter 7 or Chapter 13 bankruptcyChapter 13 BankruptcyA form of federal bankruptcy in which the debtor follows a three-to-five-year court-approved repayment plan. Student loan balances remaining after the plan are not automatically discharged and require a separate adversary proceeding. and the court determines that repayment would cause undue hardshipUndue HardshipThe legal standard a borrower must meet to discharge federal student loans in bankruptcy under 11 U.S.C. § 523(a)(8). Courts apply different tests, most commonly the Brunner Test or the Totality of the Circumstances Test..

Borrower Defense to RepaymentBorrower Defense to RepaymentA federal process for discharging Direct Loans when the school misled the borrower or engaged in misconduct related to the loan or the educational services it promised.

This could include scenarios where the school made false claims about job placement rates or fees, failed to provide resources they promised, or provided misleading education services.

For the record, it is rare to qualify for this one. Less than 20% of the applications were accepted for this program as of the end of 2020.

School Closure Discharge

If the school closes while you’re enrolled or soon after you withdraw, you may be eligible for the discharge of your federal student loan.

Death or Total and Permanent Disability DischargeTotal and Permanent Disability Discharge (TPD)A federal loan discharge for borrowers who are totally and permanently disabled, as documented by the Department of Veterans Affairs, the Social Security Administration, or a physician's certification.

In the unfortunate event of a borrower’s death, or if the borrower becomes permanently disabled and unable to engage in any substantial gainful activity.

False Certification Discharge

This applies if the school falsely certified your eligibility to receive the loan based on your ability to benefit from its training, or if you were a victim of identity theft.

Unpaid Refund Discharge

If you withdrew from the school and the school didn’t make a required return of loan funds to the lender.

Related: What Disabilities Qualify for Forgiveness?

How to Qualify for Nelnet Student Loan Discharge

As you can see, to qualify for a Nelnet student loan discharge, borrowers must meet specific criteria that typically revolve around circumstances beyond their control. Those scenarios are as detailed above.

If you are still unclear about your discharge eligibility and want to have a chat about it, feel free to book a call with me.

Should You Refinance Your Nelnet Student Loans?

My position is that the only people who should consider refinancingRefinancingTaking out a new private loan to pay off one or more existing student loans, usually to lower the interest rate or change the repayment term. Refinancing federal loans into a private loan eliminates federal benefits like IDR and PSLF. are those who are unlikely to get their loans forgiven or discharged and have enough income to afford the monthly payments on their refinanced loans.

This is because once you refinance your loan, it becomes a private loan and therefore not eligible for any federal forgiveness or discharge programs any longer. So give this some serious thought.

Bottom Line: Will My Nelnet Student Loans Be Forgiven?

While the Biden Administration was shot down by the Supreme Court last summer (2023) in some of its student loan forgiveness goals, there are still several Nelnet student loan forgiveness options available. The right one for you depends on your loan type, career, payment history and student loan balance.

Need help deciding the best path for your Nelnet loans and determining whether your student loan debt could be forgiven? Book a call with me, and we’ll review your loans and develop the right forgiveness program for you.

UP NEXT: Can Private Student Loans Be Forgiven?