Government assistance programs: What are your options?

With the cost of living steadily on the rise, it can be a struggle for many to afford basic necessities and pay their debts, and people often look to the government for help. While government debt relief programs aren’t available, there are programs that can help offset or reduce the cost of necessities like utilities, medical care and housing. There are also programs to help with student loans and other debts, and if you’re active-duty military, there are additional options available to you while you serve.

Before applying, make sure you read through what types of services and assistance these programs offer, as well as eligibility requirements.

Key insights:

• You may qualify for federal student loan forgiveness via such programs as the Public Service Loan Forgiveness program and the Teacher Loan Forgiveness program.
• The Medicaid, CHIP and Medicare programs support those who need help getting medical services.
• Individuals and families in need can get help paying their bills via programs like the Temporary Assistance for Needy Families (TANF) program, Low Income Home Energy Assistance Program (LIHEAP) and the Lifeline program.

Student loans

If you have federal student loans, there are a few student loan forgiveness options to consider. For instance, you might qualify for the Public Service Loan Forgiveness (PSLF) program if you work for the government or a nonprofit, or the Teacher Loan Forgiveness (TLF) program if you work at a low-income primary or secondary school. If you qualify for loan forgiveness under either of these programs, you’ll no longer need to pay the amount of your loan that’s forgiven.

If you’ve signed up for an income-driven repayment plan, your remaining federal student loan balance (after at least 20 to 25 years) may be forgiven. The length of time your loan needs to be in repayment depends on factors like the type of income-driven repayment plan you have and when you first got your student loans.

Additionally, the Biden administration proposed a student debt relief plan that is, as of this writing, on hold until litigation regarding the proposal is resolved. If the proposed debt relief program is approved as currently drafted, individuals who received Pell Grants could receive up to $20,000 in loan forgiveness, and those with federal student loans outside the Pell Grant program could receive up to $10,000 in relief.

Remember that these debt relief programs only apply to federal student loans, not private ones. If you have multiple private student loans and need relief, consider getting a debt consolidation loan, particularly if your current interest rates are high.

» MORE: Best Student Loan Companies

Health care assistance

If you need help with medical bills, you might be able to get support through various government programs. Medicaid, the Children’s Health Insurance Program (CHIP) and Medicare all provide medical insurance to those who qualify, such as people who earn a low income, uninsured children, seniors and people with disabilities.

Medicaid

Medicaid is a health insurance program offered by the government at the state and federal level to people who earn a low-income level. This program provides free or reduced-cost medical benefits to adults, children, pregnant people, seniors and individuals with disabilities.

Qualifications are based on factors such as your age, your income each year, how many people are in your household, if you’re pregnant or if you have a disability. What it specifically takes to qualify for the Medicaid program varies by state.

You can find out if you qualify by visiting HealthCare.gov and providing details about the state you live in, the number of people in your household and how much money you expect to make this year. To apply for Medicaid, you can complete an application online by visiting the Health Insurance Marketplace or through a local Medicaid office.

Children’s Health Insurance Program 

The Children’s Health Insurance Program works exactly like Medicaid, except it’s available to children who are members of households with income that’s too high to qualify for Medicaid. The CHIP program provides dental care and medical coverage to children under 19 years of age who are otherwise uninsured.

You can see if your children qualify for CHIP by visiting HealthCare.gov and entering details about where you live, how many people live in your household and your expected household income for this year. Visit the Health Insurance Marketplace to apply online, or you can apply through your local Medicaid office.

Medicare

Medicare is a program offered by state and federal governments to people over 65 years old, those who have a disability and people nearing the end of kidney disease. The program offers health insurance and helps pay for prescription drugs. You can enroll in Medicare online or at your local Social Security office.

» MORE: Best Medicare Supplemental Insurance

Cash assistance

Federal programs are designed to offer assistance if your family needs relief. You might be able to get help paying for your everyday needs like food and housing, covering some of your energy bills and even helping to pay your phone bill. Specific programs include the TANF program (welfare), LIHEAP program (energy assistance) and Lifeline program (phone service).

Help for active-duty military

If you’re an active-duty military member and need help with your debt, the Servicemembers Civil Relief Act (SCRA) was developed for just this reason. The SCRA is a regulation that requires lenders to provide you with extra support when you’re serving on active duty. Plus, if you can’t personally attend to the issues, anyone with a valid power of attorney can handle them for you.

Several of the debt relief actions you may receive under the SCRA include:

THE SCRA helps military members, NOAA and Public Health Service officers with debts, foreclosures and other financial issues while they’re on active duty.

• Reduced interest rates: You can receive reductions in the interest rates on the loans you received before entering into active duty service. These protections apply to the debt you got before you went into active duty, and they last until 180 days after your service ends.
• Pauses on foreclosures or repossessions: You can receive protection against foreclosure or repossession of your home, automobile or other personal property. These protections apply to loans you got before you went on active duty and extend for up to a year after your service ends, depending on the type of property being seized.
• Allowances to terminate leases: This provides you with a means to end the leases on the residences or cars you’re leasing without paying any penalties. These protections apply to leases you got before you entered active duty and generally apply if you’ll be on activity duty for 90 to 180 days (depending on the type of lease).

The protections under the SCRA apply to active duty members of the armed forces, including the Army, Air Force, Navy, Marine Corps and Coast Guard. It also applies to National Guard members who receive federal orders requiring them to mobilize for more than 30 days and to reservists serving on active duty.

Furthermore, SCRA coverage extends to any commissioned National Oceanic and Atmospheric Administration or Public Health Service officers serving during active duty.

Mortgage assistance programs

If you’re a homeowner and are experiencing financial hardship, you may be able to get help from several government mortgage assistance programs.

Protection from debt collectors

While the Fair Debt Collection Practices Act (FDCPA) doesn’t offer debt relief, it protects consumers from shady debt collectors. Gates Little, the president of The Southern Banking Company, explained, “The FDCPA is a federal law that aims to regulate the business practices of third-party debt collectors.”

“It outlines rules and regulations that debt collectors must follow in order to reduce the incidents of abuse and harassment against consumers,” Little said. Even though the FDCPA doesn’t provide debt relief, it helps protect you from debt collectors who might otherwise try to take advantage of your difficult circumstances.

For example, the FDCPA requires debt collectors to provide details about the debt they’re trying to collect (e.g., amounts and original creditor name), send you an initial written notice giving you time to dispute the debt, only contact you at reasonable frequencies (not repeatedly) and only call you during normal hours (e.g., 8 a.m. to 9 p.m. in your time zone).

If you believe you’ve been the victim of unfair, abusive or deceptive treatment by a debt collector, there are ways to get help. You can start by filing a complaint with the Federal Trade Commission or the Consumer Financial Protection Bureau. Plus, you can file a complaint with your state’s attorney general.

Bottom line

While there is no specific government debt relief program, many different programs and services are designed to help people and families in need.

Government programs offer federal student loan forgiveness for people who work for the government, nonprofits or schools; help needy families cover their bills; provide support for energy and phone bills; offer medical coverage for those who can’t otherwise get it; provide protections to active-duty military members; and protect consumers from being mistreated by debt collectors.

If you need financial support, there are many places to get help. These government programs are all designed to provide help when needed. So, don’t hesitate to apply if it seems like any of the programs might be right for you.