Student Loan Forgiveness & Repayment Plans: Complete 2025 Guide for Indiana Borrowers

With the cost of higher education rising and the student loan landscape shifting rapidly, Indiana borrowers need up-to-date guidance on their options for student loan forgiveness, new repayment plans, and the best ways to manage their debt in 2025. This comprehensive guide covers the latest federal and state programs, policy changes, and practical steps to achieve relief from student loan burdens.

2025 Federal Student Loan Policy Updates

• SAVE Plan Expansion: The Saving on a Valuable Education (SAVE) Plan is now fully implemented, offering more generous terms for federal Direct Loan borrowers.
• Streamlined Forgiveness Programs: Policy enhancements in 2025 have made Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness, and other programs more accessible, with simplified application processes.
• Fresh-Start Initiative: Borrowers previously in default now have new pathways to restore eligibility for federal aid and forgiveness programs.

Understanding the SAVE Plan: Indiana’s Key Repayment Option

What Is the SAVE Plan?

The SAVE Plan, which replaced the REPAYE plan, is the newest income-driven repayment (IDR) option for federal student loan borrowers. Its 2025 updates bring even deeper savings:

• Monthly payments capped at 5% of discretionary income for undergraduate loans and 10% for graduate debt
• Loan forgiveness after 10-20 years of qualified payments, depending on original loan amounts
• No interest accumulation if your calculated payment is less than the interest due

This means Indiana borrowers with low-to-moderate incomes may see monthly payments drop dramatically, with any unpaid interest prevented from ballooning their balances.

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

Test Your Expertise: The Complexities of the 1031 Exchange

As a sophisticated real estate investor, you understand that the 1031 Exchange is a cornerstone strategy for tax deferral and wealth accumulation. But beyond the basics, the intricacies of the 1031 Exchange rules can pose significant challenges. This quiz is designed to test your in-depth knowledge and highlight critical nuances that separate casual investors from true experts in 1031 Exchange transactions.

Instructions: Choose the best answer for each question.

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Question 1: Understanding "Like-Kind" in a 1031 Exchange

Which of the following scenarios most likely qualifies as a like-kind property exchange under IRS Section 1031, allowing for 1031 Exchange tax deferral?

a) An investor exchanges a portfolio of publicly traded REIT stocks for a commercial retail building. b) An investor exchanges their primary residence, used for personal living for 15 years, for a duplex intended for rental income. c) An investor exchanges raw land held for appreciation in Texas for a stabilized apartment complex in Florida, both held for investment. d) An investor exchanges a classic car collection (personal property) for a single-family rental home (real property).

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Question 2: Navigating the 45-Day Identification Period for a 1031 Exchange

An investor sells a multi-family property on June 15th for a 1031 Exchange. According to the strict timelines, by what date must they identify their replacement properties to comply with the 1031 Exchange requirements?

a) July 30th of the same year, as the 45-day period includes weekends and holidays. b) August 29th of the same year, allowing for an extra 45 days if needed. c) December 12th of the same year, aligning with the 180-day completion period. d) January 1st of the following year, if they plan to file for an extension.

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Question 3: The Role of a Qualified Intermediary (QI) in a 1031 Exchange

Why is the engagement of a Qualified Intermediary (QI) absolutely critical for the validity of a 1031 Exchange?

a) The QI provides investment advice and helps the investor choose the best replacement property for their 1031 Exchange strategy. b) The QI acts as a liaison with the IRS, directly negotiating tax liabilities related to the 1031 Exchange process. c) The QI holds the proceeds from the relinquished property's sale, preventing the investor from having "constructive receipt" of funds, which would invalidate the 1031 Exchange. d) The QI provides legal and tax advice to ensure the 1031 Exchange is perfectly compliant

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Question 4: Understanding "Boot" and its Impact on a 1031 Exchange

An investor sells a commercial building with $500,000 in equity for a 1031 Exchange. They purchase a replacement property for $450,000, effectively reducing their debt by $50,000. What is the tax implication of this scenario within the 1031 Exchange framework?

a) The entire 1031 Exchange is disqualified because the investor "traded down" in value. b) The $50,000 in reduced debt is considered "boot" and will be immediately taxable as partial gain in this 1031 Exchange. c) There are no immediate tax implications, as the primary goal of the 1031 Exchange is only about the "like-kind" nature of the properties. d) The investor can defer the $50,000 as long as they pay off other personal debts with the funds, still qualifying for a full 1031 Exchange.

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Question 5: Advanced 1031 Exchange Strategies & Flexibility

An investor aims to sell a highly appreciated single-tenant retail property and replace it with multiple smaller, diversified multi-family units to spread risk. Which of the following 1031 Exchange identification rules best allows for this diversification strategy, maintaining eligibility for a 1031 Exchange?

a) The "Three Property Rule," where the investor can identify up to three properties of any value, regardless of the relinquished property's value, for their 1031 Exchange. b) The "200% Rule," allowing identification of any number of properties, provided their aggregate fair market value does not exceed 200% of the relinquished property's value for the 1031 Exchange. c) The "95% Rule," which states that if more than three properties are identified, the investor must acquire at least 95% of the aggregate value of all identified properties to qualify for the 1031 Exchange. d) All of the above are valid identification rules within a 1031 Exchange, offering flexibility for various investment strategies.

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The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

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How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

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What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

Page 4 of 5

Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

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Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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Who Is Eligible?

• Must have federal Direct Loans (Stafford, Grad PLUS, Consolidation)
• Parent PLUS borrowers remain ineligible for SAVE but may access other IDR plans after consolidation
• No income cap; open to all qualifying borrowers

How to Enroll in the SAVE Plan

1. Log in to Federal Student Aid (FSA) with your FSA ID.
2. Navigate to “Manage Loans” > “Repayment Plans.”
3. Select “Apply for Income-Driven Repayment” and choose SAVE when prompted.
4. Submit your income information using recent tax returns or pay stubs.
5. Monitor your servicer’s website for confirmation and new payment amounts.

SAVE Plan Success Story

Angela from Fort Wayne had $62,000 in federal Direct Loans after earning her Master’s in Social Work. As a non-profit employee, her SAVE Plan payment dropped to $124/month in 2025. With PSLF, she’s on track for full forgiveness after 6 more years. Without SAVE, she would pay over $400/month — this switch saves her over $20,000 before forgiveness!

Public Service Loan Forgiveness (PSLF): Updates for Indiana in 2025

What Is PSLF?

PSLF forgives the remaining balance on Direct Loans for borrowers who work for qualifying government or non-profit employers after 120 qualifying monthly payments (typically 10 years), under a qualifying IDR plan like SAVE.

2025 PSLF Enhancements

• Simplified Employer Certification: The new PSLF Help Tool and expanded list of qualifying employers make it easier than ever for Indiana borrowers to verify eligibility.
• Retroactive Credit: Temporary 2023-2024 waivers and ongoing adjustments ensure that past non-qualifying payments (including certain deferments/forbearances) may now count toward your 120 total.

Application Steps for PSLF

1. Consolidate all federal loans into a Direct Loan, if not already Direct Loans.
2. Enroll in the SAVE or another IDR plan.
3. Submit the PSLF Employer Certification Form annually on studentaid.gov.
4. Track qualifying payments in your loan servicer portal.
5. Apply for full PSLF forgiveness after your 120th payment.

PSLF Success Story

✅ Small Business Resources 

• SBA – Small Business Administration
  https://www.sba.gov

• SCORE Mentors (Free Mentoring & Workshops)
  https://www.score.org
• Small Business Development Centers (SBDC)
  https://americassbdc.org

Are You an SBA Real Estate Loan Expert?

Test your in-depth knowledge on using SBA Loans for owner-occupied commercial Real Estate acquisition. These questions delve into the critical details that can impact your business's growth and financial strategy.

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Page 1 of 5

For an existing commercial property, what is the minimum owner-occupancy percentage required for an SBA 7(a) real estate loan, and does this specific scenario qualify?

A manufacturing company plans to acquire a 30,000 sq ft industrial real estate facility using an SBA 7(a) Loan. The company initially needs 18,000 sq ft for its operations and intends to lease out the remaining 12,000 sq ft.

A) 60%; Yes, it qualifies. B) 51%; Yes, it qualifies. C) 75%; No, it does not qualify. D) 60%; No, it does not qualify, as they are leasing out a portion.

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Which of the following sets most accurately represents additional cost categories that can typically be financed within an SBA 504 Loan for a commercial real estate project?

Hint: Beyond the straightforward purchase of a commercial real estate property, an SBA 504 Loan is highly effective for comprehensive projects.

A) Business inventory, working capital, and employee salaries. B) Building renovations, long-term machinery essential to operations within the property, and soft costs like architectural fees. C) Advertising expenses, short-term equipment leases, and utility deposits. D) Personal real estate investments, vehicles for personal use, and stock market investments.

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Between an SBA 7(a) Loan and an SBA 504 Loan, which program generally offers the lowest typical borrower down payment for a commercial real estate acquisition, and what is that common minimum percentage for established businesses?

A highly profitable professional services firm in a competitive market wants to purchase its office real estate with minimal upfront capital. The firm's owners prioritize cash flow and liquidity.

A) SBA 7(a) Loan; 15% B) SBA 504 Loan; 10% C) SBA 7(a) Loan; 5% D) SBA 504 Loan; 20%

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For new construction, what is the initial minimum owner-occupancy percentage required, and what is the maximum timeframe to meet the full owner-occupancy threshold, for an SBA Real Estate Loan?

A fast-growing tech startup plans to construct a new 50,000 sq ft headquarters using an SBA Loan. They will immediately occupy 35,000 sq ft and have a definitive plan to occupy the remaining 15,000 sq ft within two years as their team expands.

A) Initial 51%, full 80% within 5 years. B) Initial 60%, full 80% within 3 years. C) Initial 75%, full 100% within 1 year. D) Initial 51%, full 100% within 2 years.

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What is this crucial requirement, and what fundamental principle does it underscore for the lender?

When securing an SBA Loan for a commercial real estate purchase, principal owners with a 20% or greater ownership stake are almost universally required to provide a specific type of assurance beyond the collateral of the real estate itself.

A) A fixed-rate interest payment commitment, demonstrating long-term stability. B) A first-lien position on all personal assets, ensuring full recovery. C) A personal guarantee, signifying the owners' personal commitment to loan repayment. D) A business plan with projected revenue growth of at least 15% annually, showing future viability.

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Michael, an Indianapolis public school teacher, owed 7,000 in federal loans after earning his M.Ed. He made 10 years of IDR payments while working for IPS, submitted annual employer certifications, and in 2025 received $47,500 in remaining debt forgiven under the improved PSLF program.

Other Federal Forgiveness & Repayment Options

Income-Driven Repayment (IDR) Plans in 2025

• PAYE and IBR: Remain available for borrowers with older loans or preferences for those terms.
• Income-Contingent Repayment (ICR): Available for Parent PLUS borrowers after consolidation.
• Yearly Income Recertification: Now streamlined with online IRS access for most borrowers, keeping payments affordable and eligibility managed entirely online.

Teacher Loan Forgiveness Program for Indiana Educators

✅ Real Estate Investor Resources

• AirDNA (Short-Term Rental Data)
  https://www.airdna.co

• Rentometer (Rent Comps)
  https://www.rentometer.com
• Zillow Research & Data
  https://www.zillow.com/research

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

Page 2 of 3

If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

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Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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Indiana K-12 teachers serving in low-income schools may qualify for up to $17,500 in federal loan forgiveness after five years of teaching in a qualifying subject area. Teachers can pursue Teacher Loan Forgiveness first, then PSLF for the remainder.

• Apply after completing five academic years of service via studentaid.gov
• Eligible for Stafford and Direct Loans

Indiana-Specific Student Loan Relief Programs (2025)

While Indiana lacks a dedicated state-run student loan forgiveness program, several profession-based initiatives can provide partial loan repayment:

• Indiana Primary Care Loan Repayment Program: Offers up to $20,000/year for physicians, nurses, and mental health professionals committing to work in underserved Indiana regions. More info
• Rural Teacher Recruitment & Retention Grant: Assistance for teachers relocating to high-need rural counties, with up to $4,000 in loan repayment.

And don’t forget federal programs like the National Health Service Corps (NHSC) and Nurse Corps Loan Repayment, which Indiana clinicians frequently use.

Common Borrower Questions & Concerns (2025)

• Will I owe taxes on forgiven student loan debt?
  Federal: Through at least 2025, forgiven federal student loan debt under PSLF, IDR, and related programs is not taxed federally. Indiana currently conforms to this tax treatment for state taxes, but check for updates before filing.
• How often must I recertify my income for SAVE or other IDR plans?
  Annually; failing to recertify switches you to higher payments based on standard plan rates until you update your information.
• Is student loan forgiveness automatic?
  No — you must apply and submit all employer and income certifications as required. Monitor your servicer’s portal and use FSA’s “Loan Simulator” to check progress towards forgiveness.

Step-by-Step: Applying for Forgiveness

1. Check your loan type(s). Only federal Direct Loans are eligible for most forgiveness programs.
2. Use studentaid.gov to consolidate if necessary.
3. Enroll in the SAVE or other appropriate IDR plan.
4. Submit annual PSLF or Teacher Loan Forgiveness certifications as needed.
5. Track all progress and contact your loan servicer if any payments or periods are missing from your record.
6. File forgiveness applications via FSA or your servicer when all requirements are met.

Additional Resources for Indiana Borrowers (2025)

• Federal Student Aid (studentaid.gov): Main portal for applications, IDR enrollment, and PSLF tracking.
• Indiana Commission for Higher Education: State education and aid resources.
• Student Loan Ombudsman for dispute resolution or loan problems.
• NHSC and Nurse Corps: Health professional loan repayment details.

Conclusion: Navigating Forgiveness in 2025

Indiana student loan borrowers have more avenues to relief than ever in 2025, especially under the SAVE Plan and expanded federal forgiveness initiatives. By staying current with annual income certifications, utilizing profession-based programs, and seeking guidance when needed, you can maximize your chances for significant debt reduction or even full loan forgiveness. For personalized advice, connect with your loan servicer, the Federal Student Aid website, or Indiana’s Commission for Higher Education.

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