Student Loan Forgiveness Programs
What better news than to find out your student loan has been forgiven! This means you have all or part of your student loan is cancelled and you no longer have to dedicate part of your income towards paying back your student loans. While this option isn’t available for every single student loan borrower, there are certain situations in which all or part of your student loans can be forgiven.
Don’t get too hopeful about having your student loans forgiven. There are only a few specific circumstances in which you can have your loans forgiven.
Volunteering
If you are a volunteer for certain organizations, you may qualify for loan forgiveness.
· When you serve in AmeriCorps for 12 months, you receive $4,725 that can be used toward your student loans.
· Peace Corps volunteers can have their Stafford, Perkins, and consolidation loans deferred and part of their Perkins loans cancelled. For each year of service, 15% of your Perkins loan can be cancelled up to 70% of the total amount of the loan.
· Volunteers In Service to America receive $4,725 for 1700 hours of service.
Teaching
In certain circumstances, students who go on to become full-time teachers can have part of their loans forgiven.
If you become a teacher in an elementary or secondary school with students from low-income families, you can part of your Perkins Loan forgiven for your years of service.
· 15% for year one and year two
· 20% for year three and year four
· 30% for year five
Your school district administration can tell you whether your school is eligible for loan forgiveness under this provision.
Teachers may be eligible for other loan forgiveness programs based on the state in which they teach. You can contact your school district administration to find out if your school is eligible for any type of loan forgiveness.
Legal Professions
Some law schools will forgive your student loans if you take a public service or non-profit position after graduation. You can visit the Equal Justice Works website, www.equaljusticeworks.org, for more information on canceling your law school student loans.
Medical Professions
Certain medical groups offer loan forgiveness if you work in certain medical situations. For example, the National Health Service Corps forgive student loans for registered nurses and physicians who agree to work in areas that are medically underserved.
The criteria for forgiving student loans may differ among the groups forgiving your loan and between federal and private student loans.
If you’d like to ease your payments, but don’t qualify for any forgiveness programs, you may be able to consolidate your student loans. Consolidating your loans allows you to stretch the payments over a longer period of time, lowering your monthly payment.