25 Oct, 2013
There are times when student loans get taken out with the best of intentions to pay them back, but circumstances prevent that from happening as originally anticipated. When circumstances come up, there are some options for lowering student debt after graduation. Here are some common loan forgiveness programs that may be able to help you if you have come across a situation where you need help with your debt.
Public Service Loan Forgiveness
When you are a public servant, you are able to get help with your loans under many circumstances. This works for people who work for both non-profit agencies and government-style employees for multiple different levels. Anyone that has a job that falls under the right criteria can have whatever debt they still owe after ten full years of payments completely forgiven. This type of student debt forgiveness usually goes to those who provide the general public some type of necessary service.
This can include military, law enforcement, education, library services, hospital employees, or even people who help out disabled citizens. The work done to qualify for this position must be considered full time, and the student must have been making those ten years’ worth of payments during their employment from this organization. If you have paid off your debt prior to the ten-year mark, then this type of debt forgiveness will not work for you.
Teacher Loan Forgiveness
There are a few programs that help relieve student debt for those who go to school to teach. Some areas of teaching have a tremendous shortage, so if a student goes to teach in one of those fields, they may qualify for debt forgiveness up to 100%. Most teachers do not realize these types of forgiveness programs exist, so the programs are often under-utilized. Teachers also have the option of working as a teacher and deferring their Perkins loans, with each successful year of teaching forgiving a specific percentage of their loans until after the fifth year, all of the Perkins loans are completely forgiven.
Income-Based Repayment Forgiveness
This type of loan forgiveness program was created as a way for low-income people to be able to pay a smaller portion of their loans at once instead of risking falling behind and defaulting on their loans. What this program offers is for those who fall under 150% of the poverty level, depending on their family size, is a way to decrease the expected amount of money owed each month.
If you qualify under the program restrictions, your payments can be broken up over 25 years instead of ten, and if you still owe money after 25 years, the rest of the debt is forgiven. Each year you must go through and re-qualify, proving your income, and the amount you owe each month will be calculated based on how much you make each month and what your other bills total up to. For example, if you make under $20,000 a year and you have even one other dependent, you may not have any payment at all to make that year.
Healthcare Employee Forgiveness
This loan forgiveness program helps significantly cut down on the student debt owed by those who went to college for nursing, and then worked for two consecutive years in a facility that was critically short of qualified nurses. This program can pay for as much as 60% of the debt incurred from going to school, so long as the qualifying criteria are met. Most types of student loans are accepted under this forgiveness program, so long as the student used them to obtain a degree in nursing.