‘I can’t afford to pay the loan because I’m on a fixed income.’ I’m a 57-year-old widow with $67K in student loan debt. Can you help me get rid of it?

Question: I’m a military wife, and my husband died on active duty, so I’m now a widow. My student loan is sitting at $67,000. I’m 57 and I can’t afford to pay the loan because I’m on a fixed income. I’m a daycare teacher and have been on an income driven payment plan until COVID hit and everything was put on pause. I need to get my loan forgiven, I just don’t know where to start. Can you help?

Answer: First, we’d like to extend our deepest sympathies for the loss of your husband. We are grateful for his service. Let’s try to help you with your student loan by outlining forgiveness options, as well as help that’s specific to military spouses that could provide you with financial compensation.

Consider loan forgiveness

As a teacher, you may be eligible for Teacher Loan Forgiveness and Public Service Loan Forgiveness (PSLF). “Teacher Loan Forgiveness provides forgiveness for up to $17,500 in Federal Stafford Loans for teaching for five years in a low-income school. PSLF forgives any remaining debt after 120 payments in an income-driven repayment plan in the Direct Loan program while working full time in a qualifying public service job or for a nonprofit organization,” explains Mark Kantrowitz, author of Who Graduates From College? Who Doesn’t?. Eligible jobs include working for a government agency like a public school or a 501(c)(3) organization.

If your loans are in the Federal Family Education Loan Program (FFELP), there’s a Limited PSLF Waiver in effect through October 31, 2022 that allows payments on FFELP loans to count, if the FFELP loans are consolidated into a Federal Direct Consolidation Loan and the borrower files a PSLF form using the PSLF Help Tool by the deadline.

If you work in a Head Start program and have federal loans, Kantrowitz says those loans may be eligible for a loan forgiveness program too. “The Federal Perkins Loan program ended in 2017-2018 but the loan forgiveness options are still available for outstanding Federal Perkins Loans,” says Kantrowitz.

While there are no student loan forgiveness programs for military spouses, Anna Helhoski, student loan expert at NerdWallet, says an income-driven repayment plan is the best option to keep your payments at a manageable level since the amount you pay is tied to how much you earn. “If your income has changed since you last re-certified your payment, make sure to update the amount you earn with your student loan servicer. For a limited time, borrowers can self-certify over the phone,” says Helhoski. And at the end of your income-driven repayment term, which lasts 20 or 25 years depending on your loans, whatever amount remains would be discharged.

Have a question about getting out of student loan or other debt? Email [email protected].

Understand benefits for military spouses

While there are loan forgiveness programs for members of the U.S. Armed Forces, not all are available to spouses — even when the service member is killed in action. “The Servicemembers Civil Relief Act (SCRA) provides certain benefits for loans made to members of the U.S. Armed Forces, including joint loans with their spouses, for the duration of their active duty service plus one year. This includes a 6% cap on the interest rate, but these protections end when the service member is killed in action,” explains Kantrowitz.  And though there are certain education benefits under the Post-9/11 GI Bill that can be transferred to a spouse or dependent, these benefits cover part of the cost of future education and cannot be used to repay student loans. 

“There are, however, a variety of other benefits for survivors such as the death gratuity, Survivor’s Pension, Dependency and Indemnity Compensation (DIC), Survivor Benefits Plan (SBP) and Dependents Educational Assistance (DEA). These programs provide financial support but do not forgive student loans,” says Kantrowitz. Survivor’s Pension is a tax-free benefit payable by the Department of Veterans Affairs to a low-income, un-remarried spouse and unmarried dependent children of a deceased wartime veteran. DIC is a tax-free monthly benefit paid to eligible survivors of service members who died in the line of duty. SBP provides financial support to military spouses and children when a military member dies while on duty or after retirement. DEA offers education and training to qualified dependents of veterans who are permanently and totally disabled because of a service-related condition or who died while on active duty as a result of a service-related condition. Though these programs won’t help you get rid of the student loans, they might help boost your income so it’s easier for you to repay them.