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Wednesday, February 8, 2023


Does the Government Sponsor Debt Relief Programs?

When working your way out of debt, you may be asking yourself questions, such as, ”does the government sponsor debt relief programs?’’ Unfortunately, the government does not run any debt relief programs, consolidate debts, or offer grants to help settle debts. But, it has other provisions that you could take up to manage your debt or make the repayment process easier.

Ways the Government Helps You With Debt

The government provides financial protections for consumers by offering the following types of assistance:

Debt Forgiveness

The government offers public service loan forgiveness for student loans if the debt is owed to it and not to a private entity. For example, the Department of Education may forgive, discharge, or cancel federal student loans for specific government employees like nurses, EMTs, firefighters, and first responders.

The IRS also has an ‘Offer in Compromise’ that relieves tax debt, allowing you to pay less than the total amount you owe. But, the relief is only offered based on your capacity to pay, your income, expenses, and your asset equity. An important fact to note is that the forgiven debt is considered a form of income. So, you are obligated to pay taxes on it.


The government, through the FTC, regulates debt collection and debt settlement agencies, banning them from charging advance fees for their services. The Consumer Financial Protection Bureau also protects citizens from unfair treatment by debt collection agencies, banks, or other lenders. In this way, even if you are having trouble paying your debt, the creditors cannot harass you outside the provisions of the law.

Student Loan Disability Discharge

If you have a long-term disability, you could apply for the Total and Permanent Disability Discharge. Although there are many conditions attached to it, you could have your entire student loan balance wiped away if you meet them all.

Credit Card Debt

The one debt that the government is emphatic that it cannot offer relief from is credit card debt. It does not even forgive or minimize it. But, the government works with non-profit consumer credit counseling agencies that rehabilitate consumers and help them resolve their debt problems through their credit counseling services.

Get Help From Debt Relief Companies

If you fail to qualify for the government debt relief programs or have credit card debt, your option is to seek the help of a debt relief company like Freedom Debt Relief at It has provisions and programs that you could sign up for and get help dealing with your debt.

A debt relief company is an entity that you charge to negotiate better terms with your creditors. The company works on your behalf to get the creditors to accept less or give you more favorable terms in exchange for actively working to settle the debt.

The result of the negotiation could be a reduction of the amount you owe or an agreement to repay the debt in lesser amounts every month, for a long period, without incurring heavy interest. With better loan conditions, you can repay your debt with more ease.

Sometimes, the debt relief company may offer debt-counseling services and work with you to come up with a favorable repayment program. The agents may guide you on budgeting to free up some more money for repayment without neglecting your basic needs. When the repayment process becomes easier, you are less troubled.

Our Verdict: Does the Government Sponsor Debt Relief Programs?

No. The government doesn’t sponsor debt relief programs, per se. It does have programs for student debt and IRS back taxes, but consumer debt such as credit cards, mortgages and medical bills are out of its purview. With that said, one government agency does offer debt advice, which you can find at the Federal Trade Commission website

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Synthia Rozario
Synthia Rozario
An editorial staff member at The Eastern Herald. Formerly, correspondent of The Eastern Express, Hong Kong.


  1. That is why many people get personal accountants, in case when it is impossible to control everything in a lot of numbers in the head, plus a lot of paperwork during registration can be easily lost!

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