Government assistance programs: What are your options?
If you’re struggling with money, the U.S. government has programs that could help
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.
- 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.
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
- Public Service Loan Forgiveness program
- The Public Service Loan Forgiveness program is available to people who:
- Make 120 monthly payments under their student loan repayment.
- Working full-time for nonprofit entities or the government.
- Have Direct Loans.
After you meet all the program requirements, your remaining student loan balance is fully forgiven by the U.S. Department of Education.
Keep in mind that your student loan payments, repayment plan and employer must qualify for the program. For instance, your federal student loan must be a Direct Loan, you must have made the required number of payments, your loan can’t be in default, you must have made payments under an income-driven repayment plan and your employer must qualify.
Notably, the U.S. Department of Education offered limited PSLF waivers through Oct. 31, 2022, allowing borrowers to receive credit for payment periods that previously didn’t qualify (e.g., periods of forbearance due to issues like economic hardships). This was a helpful way to allow more people to qualify for forgiveness than would have otherwise been able to.
While the regular PSLF program requirements went back into effect on Nov. 1, 2022, those who don’t already have a Direct Loan can apply for consolidation of their other federal student loans with the U.S. Department of Education by May 1, 2023, and potentially receive PSLF credit for qualifying payments they previously made.
Additionally, permanent changes to the PSLF program will go into effect on July 1, 2023. These changes include giving borrowers credit for late payments, partial payments and large payments they made during periods of qualifying employment. The changes also include giving credit for periods where the loans were either deferred or in forbearance (e.g., you were dealing with a serious illness or serving on active duty in the military).
- Teacher Loan Forgiveness program
- The Teacher Loan Forgiveness program offers forgiveness of up to $17,500 on federal student loans issued through the Direct Loan or Federal Family Education Loan (FFEL) Program. To qualify, you must teach full-time for five complete, consecutive academic years at a low-income primary or secondary school or at an educational service agency. Note that you can’t use the same payments to qualify for forgiveness under both the PSLF and the TLF.
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 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 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.
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).
- Temporary Assistance for Needy Families
- The TANF program provides families with financial support during temporary times of need while they work toward achieving independence. You’ll apply with the TANF office in your area and will generally need to prove your need (e.g., job loss). Some of the benefits include help with food costs, housing, child care and even job training.
You can contact your local TANF office to begin applying for assistance under this program.
- Low Income Home Energy Assistance program
- The LIHEAP program is meant to help those who can’t afford to pay their homes' heating and cooling bills. It’s commonly available to those who qualify for welfare and other needs-based programs (like food stamps).
Not only do the benefits include support with paying your heating and cooling bills, but you can get emergency help if your utilities get turned off. Plus, you might even be able to make energy-efficient improvements to your home.
You can contact your local LIHEAP office to look into applying for assistance via this program.
- The Lifeline program, offered by the Federal Communications Commission (FCC), helps low-income families get discounted or free phone service via cell phones or landlines.
To qualify for the Lifeline program, you need to either participate in a needs-based government program (e.g., food stamps, Medicaid, etc.) or your income needs to be no more than 135% of the federal poverty guidelines.
You can apply for the Lifeline program with your phone provider or internet company or directly with the FCC.
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.
- Homeowner Assistance Fund
- The Homeowner Assistance Fund (HAF) is a $9.961 billion program included in the American Rescue Plan Act of 2021. Each state was awarded at least $50 million in funding for eligible homeowners facing financial hardship after Jan. 21, 2020, and with a mortgage balance at or below the FHFA conforming loan limits.
Some of the HAF funds are targeted at low-income homeowners (e.g., income at or below the median income where they live). A portion of the HAF funds is also targeted at those who are socially disadvantaged (e.g., people belonging to groups subject to prejudice).
Funding from the HAF program can be used to provide assistance with such things as:
- Making your mortgage payments
- Reducing the principal balance on your mortgage
- Paying costs related to a mortgage default, delinquency or forbearance
- Helping reduce your interest rate
- Paying for utilities or internet service
- Making insurance payments for your home (e.g., property, flood)
- Covering HOA fees
- Preventing foreclosure, eviction, mortgage delinquency, loss of utilities, etc. due to the COVID-19 pandemic
- Providing other types of housing stability assistance to homeowners
You can apply with your state and visit the Homeowner Assistance Fund website to see if HAF program funds are still available where you live. HAF funding is available until it runs out in your state or Sept. 30, 2025, whichever comes first.
- FHFA and HUD Mortgage Assistance Programs
- If you experienced a financial hardship related to COVID-19 that led to difficulties making your mortgage payment, the Federal Housing Finance Agency (FHFA) and U.S. Department of Housing and Urban Development (HUD) both have mortgage assistance programs.
The FHFA mortgage assistance program is intended for those who have a conventional Fannie Mae or Freddie Mac mortgage, while the HUD program is for homeowners with an FHA loan. Under these mortgage assistance programs, you may be able to request loan forbearance and have your payments temporarily paused or reduced.
You can contact your loan servicer to apply for relief under both programs. You must request relief from your loan servicer by no later than May 11, 2023, for the HUD program. To determine the availability of mortgage assistance under the FHFA program, you can use the Fannie Mae loan lookup and Freddie Mac loan lookup tools to investigate your specific situation.
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.
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.
- Article sources
- ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page. Specific sources for this article include:
- Consumer Financial Protection Bureau "Get Homeowner Assistance Fund help." Accessed March 8, 2023.
- Consumer Financial Protection Bureau, "Help for homeowners." Accessed March 8, 2023.
- Consumer Financial Protection Bureau, "The Servicemembers Civil Relief Act (SCRA)." Accessed Feb. 17, 2023.
- Consumer Financial Protection Bureau, “Submit a complaint about a financial product or service.” Accessed Feb. 17, 2023.
- Federal Housing Finance Agency, "COVID-19 INFORMATION AND RESOURCES." Accessed March 8, 2023.
- U.S. Department of Education, "Do you have questions about the different types of income-driven repayment plans?” Accessed Feb. 17, 2023.
- U.S. Department of Education, "If your federal student loan payments are high compared to your income, you may want to repay your loans under an income-driven repayment plan.” Accessed Feb. 17, 2023.
- U.S. Department of Education, "Income-Driven Repayment Account Adjustment." Accessed Feb. 17, 2023.
- U.S. Department of Education, "Public Service Loan Forgiveness (PSLF).” Accessed Feb. 17, 2023.
- U.S. Department of Education, "Search Employer Eligibility for Public Service Loan Forgiveness (PSLF)." Accessed Feb. 17, 2023.
- U.S. Department of Education, "Student Loan Forgiveness." Accessed Feb. 17, 2023.
- U.S. Department of Education, "Teacher Loan Forgiveness." Accessed Feb. 17, 2023.
- U.S. Department of Education, "The Biden-Harris Administration’s Student Debt Relief Plan Explained.” Accessed Feb. 17, 2023.
- U.S. Department of Education, "The Limited PSLF Waiver Opportunity Ended on Oct. 31, 2022." Accessed Feb. 17, 2023.
- Federal Trade Commission, "Debt Collection FAQs." Accessed Feb. 17, 2023.
- Federal Trade Commission, "Report to help fight fraud!" Accessed Feb. 17, 2023.
- HealthCare.gov, "Medicaid & CHIP coverage." Accessed Feb. 17, 2023.
- HealthCare.gov, "Saving money on health insurance." Accessed Feb. 17, 2023.
- IRS, "Topic No. 431 Canceled Debt – Is It Taxable or Not?" Accessed Feb. 17, 2023.
- National Archives, "124.103 Who is socially disadvantaged?" Accessed March 8, 2023.
- National Attorneys General Training & Research Institute, "Consumer Protection." Accessed Feb. 17, 2023.
- National Council of State Housing Agencies, "Homeowner Assistance Fund." Accessed March 8, 2023.
- National Council of State Housing Agencies, "NCSHA Summary of Homeowner Assistance Fund." Accessed March 8, 2023.
- Office of the Assistant Secretary for Planning and Evaluation, "Poverty Guidelines." Accessed Feb. 17, 2023.
- U.S. Department of Education, "Education Department Announces Permanent Improvements to the Public Service Loan Forgiveness Program and One-time payment Count Adjustment to Bring Borrowers Closer to Forgiveness." Accessed Feb. 17, 2023.
- U.S. Department of Health & Human Services, "LIHEAP Map State and Territory Contact Listing." Accessed Feb. 17, 2023.
- U.S. Department of Health & Human Services, "Help for Families." Accessed Feb. 17, 2023.
- U.S. Department of Housing and Urban Development, "COVID-19 Resources for Homeowners." Accessed March 8, 2023.
- USAGov, “Help with Bills.” Accessed Feb. 17, 2023.
- USAGov, "How to Apply for Medicaid and CHIP" Accessed Feb. 17, 2023.
- USAGov, "Medicare" Accessed Feb. 17, 2023.
- USAC Lifeline Support, "Do I Qualify?" Accessed Feb. 17, 2023.
You’re signed up
We’ll start sending you the news you need delivered straight to you. We value your privacy. Unsubscribe easily.