South Dakota Student Loan Forgiveness

South Dakota Student Loan Forgiveness

7 min read


What is student loan forgiveness?

Student loan forgiveness programs work by having the federal government forgive a portion of your student loans based on certain requirements. This may reduce monthly payments and could eventually lead to you paying off your student debt entirely before the end of the 10-year repayment period. In some cases, the amount forgiven equals the total outstanding balance owed on the student loans.

How does South Dakota’s program work?

The South Dakota state legislature passed Senate Bill 183 in 2017, implementing a plan to have the U.S. Department of Education forgive the remaining balance on eligible student loans if borrowers complete a number of conditions related to their employment, career, and borrowing history. These conditions include a minimum six-month service commitment at a nonprofit organization or governmental entity while completing a graduate degree and making 120 qualifying monthly payments.

Who qualifies?

This legislation only applies to direct loans issued between July 1, 2007, and June 30, 2018. Therefore, people who started repaying their loans after July 1, 2013, do not qualify unless they had existing federal student debt prior to that date. Additionally, the borrower cannot have any outstanding fees or other types of nonpayment penalties on their loans.

Does everyone qualify?

NoThere are several income restrictions that apply. First, you need to make 120 qualifying monthly payments (subject to change). Second, you must be enrolled in, and accepted for admission to, an approved school. Third, your family income cannot exceed 150% of the poverty line. Finally, you cannot have any defaulted loans.

Is it possible to consolidate private student loans under the same program?

Private student loans are not included in the new law.

South Dakota Student Loan Forgiveness

The South Dakota student loan forgiveness program (SDSLFP)

The South Dakota resident-run state-based public student loan borrower forgiveness program was established in 2010 under an act of the South Dakota State Legislature. It provides direct relief for eligible borrowers who have defaulted on their federal loans and want to avoid accumulating additional debt due to the deferment period and/or repayment plan. The SDSLFP applies only to federally guaranteed direct loans; therefore, borrowers cannot apply for loan rescission if they have private college career loans.

Qualifying criteria

A borrower must demonstrate financial hardship in order to qualify for the program. If the borrower has been making payments toward his or her student loans for at least five years before filing for loan forgiveness, he or she will receive a partial discharge of the debt. The amount forgiven, however, is limited to no less than 50% of the total balance owed on the first $15,000 of principal.

Borrowers may not consolidate their student loans in order to obtain forgiveness. Borrowers who wish to enroll in income-contingent plans while enrolled in the SDSLFP must do so outside of the program. Borrowers seeking to postpone any payment until after graduating from school should contact their lender directly. A borrower’s loan servicer will provide information about the loan forgiveness options available to them. The Department of Education does not regulate the eligibility requirements for the SDSLFP. Eligibility decisions are left to each individual creditor.

Contacting the SDSLFP

To file a formal application for loan forgiveness, borrowers must complete a Debt Management Program Application, including their name, address, Social Security Number, current employment status, and employer identification number. After completing the DMP application form, borrowers must submit proof of enrollment in a certified counseling agency for three months prior to applying for loan forgiveness. Counselors assess the applicant’s circumstances and then prepare a written recommendation for submission to the SDSLFP, which includes details regarding the applicant’s financial situation. Once the counselor submits the recommendation, the SDSLFP reviews it and decides whether to grant or deny the request.

How much money could I save?

Each year, thousands of students seek assistance from the SDSLFP and are granted loan forgiveness. In 2013, the SDSLFW provided over $8 million in forgivable debt. The average debt discharged was approximately $14,000, and the median amount was around $9,500. The maximum forgiven amount is $85,000.

South Dakota Student Loan Forgiveness


Who Qualifies?

Generally speaking, if you have not earned enough income over a certain amount of time, then you do not qualify for student loan forgiveness. In order to receive student loan forgiveness, you must meet the following criteria:

You must owe no more than $30,000 in total federal education loans.

Your monthly payment cannot be more than 10% of your discretionary income.

You must sign a certification stating that they will use their best efforts to pay off the remaining balance owed.

There are a few exceptions to this rule, including public service jobs and military service. However, these exceptions do not apply to private schools. Private schools are considered any school that does not provide direct instruction towards the field of study that you are enrolled in and, therefore, may not qualify for direct loan forgiveness. There are some schools, however, that offer financial assistance along with educational services. These schools tend to focus on specific fields, such as nursing or business management. Therefore, check with your college/university about possible financial aid before enrolling. You should always find out how much money you will need to take home after paying for expenses such as rent, food, clothing, etc. If you have already taken out a loan and paid back the full amount, you may still qualify for loan forgiveness under certain conditions.

Eligibility requirements

In order to receive loan forgiveness, you must fulfill each of the following requirements prior to July 1st of each year:

Make 120 installments.

maintain at least a half-time enrollment at an eligible institution for a period of six years;

not fail to make any payments; and

Completely repay your loans.

If you fail to meet any of those four requirements, then you will not be able to receive loan forgiveness. In addition, you must satisfy one of the following three options to continue receiving loan relief:

For five years, make minimum payments on your loans.

South Dakota Student Loan Forgiveness

South Dakota student loan forgiveness is a program supported by the U.S. Department of Education with the purpose of helping public service workers obtain higher education. Those who have met the eligibility requirements may qualify for help to reduce their debt payments. In order to apply, borrowers need to submit proof that they have worked in public service fields for at least two years. Additionally, they must meet other criteria, including making 120 monthly payments on their loans and having no defaulted accounts.

Eligibility requirements

Borrowers must have graduated from high school, earned a GED certificate, or served at least two years of active duty military service.

Have not had any federal collections placed due to an inability to make repayments on their loan(s).

must have obtained a bachelor’s degree before July 1, 2008 (unless the borrower attended an approved postsecondary institution after June 30, 2006), or completed 24 credit hours toward a baccalaureate degree after December 31, 2005.

Lenders must verify a borrower’s employment history.

Borrowers may complete a free application online at

Once submitted, applicants will receive a notification email from the Department of Education regarding processing times.

How Does It Work?

Borrowers who qualify for South Dakota student loan forgiveness may request that their remaining balance owed on these federally guaranteed loans be forgiven.

A total of $23 billion was granted under the Public Service Loan Forgiveness Program in 2012. Loans that were forgiven totaled $4.8 billion. Of those, $1.9 million went to people in South Dakota.

South Dakota Student Loan Forgiveness

South Dakota Student Loan Forgiveness

The U.S. Department of Education’s (ED) single loan repayment program was launched in July 2010 under the Obama Administration. The program forgives loans if eligible students complete certain requirements. Working at least half-time while in college; maintaining satisfactory academic progress; repaying their student loans on time; and making 120 payments on their federal student loan debt are among these requirements.On top of these requirements, a borrower who works 50% or more than half time must complete three years of employment before they are considered for forgiveness. Students who have completed these criteria can receive a total of $57,500 over 10 years. Borrowers must work 80 hours per month and make six consecutive monthly payments on their student loan debts to qualify for 100 percent loan forgiveness.

A majority of states have a separate state-based loan forgiveness program. Borrowers may receive relief from paying back their student loans after meeting specific eligibility requirements.

In addition to the federal loan forgiveness program, some private lenders also offer student loan forgiveness. For example, Discover Bank offers borrowers who graduate from accredited undergraduate schools with no defaulted loans the opportunity to apply for loan forgiveness.

Many employers also offer student loan forgiveness. Some companies, including Walmart, Wells Fargo, and American Express, provide incentives to workers that help them pay off their student loans. Other companies, like Starbucks, allow employees to take advantage of lower interest rates when they repay their student loans.

Eligibility requirements

To be eligible for the U.S. Department of Education’s loan forgiveness program, students need to meet the following requirements.

Borrowers must have borrowed from the Department of Education. However, they do not need to hold a direct loan from the government agency.

The borrower must work at least half time and have earned a bachelor’s degree from an accredited institution. Accredited institutions include public colleges and universities; trade schools; vocational training centers; and technical institutes. A borrower does not necessarily need to attend school full time.

Borrowers must also meet the following requirements:

The borrowing period should last between seven and ten years. This means borrowers should begin repaying their loans by August 1st of 2006 and should finish paying off their loans by August 1st of 2016.

Borrowors’ income must be below 150% of the poverty line each year. The poverty line varies based upon area.

The borrower’s income must increase at least two times above the previous year. If borrowers have not been employed for at least two years, they are ineligible for this benefit.

Students who want to file for loan forgiveness should be aware of the following terms:

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