How to Get a Student Loan Forgiven
Student loans absolutely can be forgiven under certain circumstances. In fact, this has been a feature of student loans from the very beginning. Even better, there are a number of different ways to qualify.
Give of Yourself
The old adage “give and ye shall receive” holds especially true in the case of student loans. Serving one of a number of volunteer organizations will qualify you for forgiveness of up to 70 percent of your outstanding loan balances. These include the Peace Corps, AmeriCorps and Volunteers in Service to America — aka VISTA. Forgiveness details vary with each organization, so check the online presences of the one capturing your interest to determine the exact parameters.
Become an Educator
Working full time for five consecutive years in an elementary, middle, or junior high school serving children from low-income families will also get you a break. Up to $17,500 in Federal Stafford loans qualify for this program. Perkins loans can be forgiven in their entirety.
Go into Medicine or Law
Two years of voluntary service at a clinic in need of health professionals will get up to $50,000 of your debt set aside through the National Health Service Corps Loan Repayment Program.
The National Institutes of Health will cover medical students who go into medical disparities, contraception research or clinical practices.
Attorneys from law schools participating loan assistance repayment programs will be given a break for doing non-profit work.
Income-Based Repayment Plan
As the name implies, this strategy ties your monthly loan payment to your income. Under this approach, your monthly payment will be 15 percent (or less) of your monthly income above the federal poverty level. In some cases, this could mean no payments at all.
USA Today cites the following example:
Take, for example, a recent grad who makes $20,000. Because the federal income level within the contiguous United States is $11,490, that means he only makes $8,510 in discretionary income. Under the IBR, he would only have to make payments that were 15% of that $8,510, which equals about $106 a month.
The remaining loan balance is forgiven after 25 years in the program.
This can be particularly beneficial if your fortunes should wane, because public student debt cannot be erased by bankruptcy — nor is it eligible for reduction under debt negotiation or settlement. However, if you’re in serious financial trouble, companies like Freedom Debt Relief can negotiate for terms on your other debts to help make repaying your student loan easier.
Consider Public Service
When you enroll in one of these programs, you’ll be eligible for complete forgiveness of your debt after 120 qualified payments.
According to the U.S. Office of Education’s federal student aid; employment with a federal, state or local government agency, entity or organization — or a not-for-profit organization designated as tax-exempt by the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code (IRC) — qualifies you for the Public Service Loan Forgiveness Program.
Are These Government Handouts? Hardly
Some people might say availing yourself of one of these programs amounts to a government handout. However, the reality is quite different. In every case, you’ll repay a portion of the money forwarded on your behalf before the remainder is forgiven. What’s more, you’ll provide a valuable service in exchange.
These are win-win situations in which you’ll serve our country with your freshly minted diploma, while gaining experience you’ll need to craft a successful career.