Student loan debt can be overwhelming, especially for graduates who enter industries that end up not paying very well. If you find that you have trouble making your student loan payment – or if you just want to speed up the debt elimination process – it’s worth considering debt repayment, forgiveness and cancellation programs.
These programs, which help reduce or eliminate student loan debt in exchange for services and skills, often involve work in poorly served communities. For those who return to the company, the following programs can give you back a little.
Loan forgiveness programs for students to consider
It is important to note that all the programs listed below have important tax implications. Generally, when the debt is forgiven, the IRS considers it taxable income. However, if your debt has been repaid or canceled as part of a job-specific student loan forgiveness program (like many of the programs listed below), it is not taxed.
The main caveat is that if the student loan balance has been canceled due to total disability, then it is considered taxable income and you are on the hook for the IRS. However, there are exceptions to every tax rule, so be sure to see a tax professional to discuss your specific situation.
1. Employees of the public service
The PSLF (Public Service Loan Forgiveness Program) was designed to encourage people to enter and remain in a public service job and, consequently, probably covers most of the careers of all these programs.
- Applicable careers. It includes careers such as public education, military service, social work, public security, law enforcement, public health services, public library services, public utility services and public service for people with disabilities and the elderly.
- Qualifications To qualify, you must have made 120 monthly and timely payments (10 years) after 1 October 2007 while working full-time with a public service employer. With a start date of 1 October 2007, you are not eligible for a student loan pardon until October 2017. If you plan to stay in a public service career, circle that date on the calendar and take advantage when the time comes. Once you reach 120 monthly payments, the maximum amount the loan can be reduced is $ 17,500.
- Types of loans. Federal student loans that qualify for loan forgiveness include Stafford, Ford, PLUS loans and direct consolidation loans. Other federal loans become eligible for forgiveness if they are consolidated into a direct consolidation loan. These include federal Perkins loans, federal PLUS loans and FFEL consolidation loans. It is important to note that, once consolidated, only payments made on the new direct consolidation loan count towards the 120 monthly payments required to take advantage of the PSLF program.
Educators in the United States do some of the most important jobs in the country, but often do not receive adequate pay. Therefore, they are often left with student loan debt that is not easily repaid. By entering these student loan forgiveness and cancellation programs, teachers are in a stronger position to work in low-income schools to educate children who need the most help.
- Forgiveness of federal loan for teachers. If you teach full-time for five consecutive academic years, you can get the loan lost up to $ 17,500 through the Federal Teacher Forgiveness Program. However, you need to work in a qualifying school that serves low-income families and qualifies for Title I funding. In addition, your loan must have originated after October 1, 1998 and you cannot be in default without having set up agreements repayment terms satisfactory. To run a search for eligibility for the school, visit this directory.
- Federal Perkins loan cancellation program. If you received a federal Perkins loan, you may be entitled to a complete debt cancellation through the federal Perkins loan cancellation program. You must currently work as a special education teacher or in a school that serves low-income families. Eligible educators must teach math, science, bilingual education, a foreign language, or work in any field deemed scarce by that particular state.
- Loan sponsored programs sponsored by the state and the city. Make sure you look for state and city loan forgiveness programs: the American Federation of Teachers (AFT) is a great resource.
3. Healthcare professionals
Student loan debt incurred by health professionals, including doctors, nurses, doctors and even veterinarians, can be staggering. While the potential for higher wages exists in these fields, it can still take years to repay educational debts.
Fortunately, the following debt repayment programs can quickly ease the burden on healthcare providers. Most of these programs require a commitment from one to two years in a poorly served community.
- National Health Service Corp (NHSC ). According to the website of the National Health Service Corp (NHSC), “General practitioners, dental and mental / behavioral health physicians can get up to $ 50,000 to repay their loans to health care students in exchange for a commitment of two years”. work in an under-served area and would be compensated in advance so that you can quickly pay off the debt. To search for an under-served facility in your area, or to see if you are currently working in one, check the NHSC search function. There are both part-time and full-time options, with amounts of forgiveness that vary accordingly. In other words, even if you work part-time, you may still be entitled to forgive a portion of your debt.
- Nursing loan repayment program. The nursing loan repayment program pays 60% of the unpaid loan balance in two years, plus an additional 25% of the original loan balance in an optional third year. In exchange for paying the loan, it is necessary to work in a low-income location, in the country or in the city, and get the same competitive salaries as regular nurses. You must also be a US citizen and a full-time licensed nurse at a suitable “critical inventory facility”.
- Loan program for veterinary medicine. If you are willing to work as a vet for three years in an area designated by NIFA with a situation of shortage (NIFA stands for “National Institute of Food and Agriculture”), you can get up to $ 25,000 in loan forgiveness through the Program for forgiveness of the loan for veterinary medicine. Applicants must be US citizens and have a doctorate in veterinary medicine (DVM).
- Loan repayment program for Indian health services. The Indian health services loan repayment program (IHS) pays up to $ 40,000 if you are willing to sign a two-year commitment to practice in a health facility that serves American Indian and Alaskan native communities. Once your two-year commitment ends, you have the option to extend your contract until your qualified student debt is fully paid. Also, if you are a native American or native of Alaska, you receive a priority consideration.
- Loan repayment program for healthcare professions (California). If you live in California, you may be entitled to a maximum of $ 50,000 through the state-sponsored Health Care Profit Reimbursement Program. You must be a certified obstetric nurse, specialist nurse, dental hygienist, dentist, nurse or medical assistant. You must also work directly with patients for 32 or more hours a week and get an exceptional loan from a governmental or US credit institution.
4. Active military
If you choose to join the army and the student loan debt is hanging over your head, you may have some relief with the following repayment programs.
- Army loan repayment program. The army loan repayment program is a special incentive offered to specifically recruited personnel. If accepted, the Army pays one third of the outstanding debt or $ 1,500 a year, whichever is greater (up to $ 20,000 in total). The most popular student loans that are eligible include loans to parents for undergraduate students (PLUS), additional student loans (SLS), Stafford loans, Perkins loans, William D. Ford loans and state-funded loans.
- Navy loan repayment program. Similar to the army’s reimbursement program, the Navy pays one third of the outstanding debt or $ 1,500 a year, whichever is greater. The maximum total repayment is $ 65,000. Your first loan repayment is not eligible until after the first year of active service. Loans that qualify include federal insured student loans, subsidized or unsubsidized Stafford loans, Perkins loans, consolidated loans and PLUS loans.
- Air Force College loan repayment program. The USAF pays up to $ 10,000 in total, divided into annual payments of $ 1,500. To qualify, you must not have previous military experience, agree to enlist for at least four years, and renounce your GI Bill benefits. Depending on the suitability and status of the service, GI Bill’s benefits could include full tuition fees, a housing allowance and up to $ 1,000 per year for books and supplies. Make sure you seek professional assistance before deciding whether to give up your benefits. GI Bill is the right decision for you.
5. Lawyers (public service)
Dozens of law schools, including Harvard, Yale, Stanford and NYU, offer loan repayment assistance programs – see the full list of schools that are currently participating. Programs generally require full-time employment with a public service law firm and an adjusted gross income of less than $ 60,000.
The amount of student loan debt that law schools reimburse varies considerably. For example, the faculty of law at the University of Notre Dame reimburses up to $ 12,000 a year for three years, while Rutgers Law School contributes between 15% and 25% of a graduate’s annual debt payment for five years. The types of loans that most participating law schools repay include Stafford, Perkins and private education loans.
Some volunteer opportunities can also help with student loans. Essentially, these involve being paid by “sponsors” for your competence or ability to perform certain tasks. The payments then go towards your student loans.