4 Options for Student Loan Forgiveness
Wouldn’t it be nice to be able to borrow money–thousands of dollars–and NOT have to pay that money back? You might be surprised to know that (aside from dying unexpectedly) there are indeed ways to qualify for student loan forgiveness in the United States! Of course, getting your federal student loans forgiven is not always a piece of cake and does require a bit of patience, but if you’re interested in the possibility, read on to learn about 4 ways to get your debt forgiven!
First of all, though, it’s important to note that none of these methods will work for student loan forgiveness will work if your loans are in default (i.e., if you haven’t many any payments on the loans in more than 9 months).
It’s also important to mention that this article offers tips for PUBLIC student loan forgiveness. Private loans are NOT eligible for forgiveness.
Furthermore, make sure to verify all of this information, as changes to the way federal student loan forgiveness operates ARE possible, depending on what actions (if any) our government decides to take regarding making college affordable for every American.
With those preliminaries out of the way, let’s explore 4 options for federal student loan forgiveness!
1) Public Service Loan Forgiveness
If you’d like your federal student loans forgiven or simply have a passion for public service, this may be the option for you! In order to be eligile, you must be a full-time worker at a nonprofit organization for 10 years. Jobs such as firefighters, teachers, military personnel, and nurses are some of the jobs that may qualify. Check to ensure that you qualify, though, before putting in 10 years! Be patient. Know that as you wait 10 years, you’re helping to make the world a better place.
The way to save the most money under this plan is to enroll in an income-driven repayment plan. That way, your monthly payments will be no higher than 10% of your monthly income. The public service loan program was implemented in 2007.
2) Teacher Loan Forgiveness
Love kids? Love teaching? Want to make a difference in a low-income public elementary or secondary school? Want your public loans FORGIVEN after just five consecutive years of teaching at such a school? The teacher loan forgiveness program may be right for you! You can have as much as $17,500 worth of federal student loans forgiven after you’ve served five consecutive full-time years at a qualifying school in a qualifying area.
It’s important to note that under the teacher loan forgiveness plan, you also qualify for the public service loan forgiveness plan. The difference? The public service loan forgiveness plan forgives all of your federal direct or Stafford loans, but it takes 10 years, while the teacher loan forgiveness plan only forgives $17,500 worth of loans–but in half the amount of time.
3) Perkins Loan Cancellation
This program only applies to federal Perkins loans, but if you work in a public service job–such as a police officer or a school librarian–you’ll be eligible to have 100% of your federal Perkins loans forgiven after about five years of employment. Teachers are also eligible for the Perkins loan cancellation program, but must teach in a low-income area or a qualifying subject, so be sure to Google for more information when deciding if you qualify.
4) Income-driven Repayment Plan
As I write this, the federal government offers four different income-driven repayment plans. These are Income-based repayment, Income-contingent repayment, Pay as You Earn, and revised Pay as You Earn. Google for more information about each–but know that each of the programs will FORGIVE any outstanding federal student loan balance on your account after 20 to 25 years of payments under the plan.
Be advised that under any of these plans, however, you will likely accrue much more interest! Your monthly payments will likely be lower, though, so if you can make it for 20 to 25 years, one of these four plans could be a good option!
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