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When you have student loans there are ways to get all or part of the loan forgiven. The goal of the student loan forgiveness programs is to encourage public service in various defined ways. The service can take different forms including as volunteer work, non-profit positions and teaching to name a few.
Volunteer Service
Federal student loan forgiveness is available for specific types of volunteer work. The government programs that offer loan forgiveness include AmeriCorps, the Peace Corps and Volunteers in Service to America (VISTA).
If you serve at least 12 months with AmeriCorps, you can receive a $7,400 stipend and a $4,725 loan payment.
If you join the Peace Corps as a volunteer, federal loans can be deferred and partially forgiven at a rate of 15% for each year of volunteer work. The maximum amount that can be forgiven is 70%.
VISTA volunteers work with the poor, homeless and illiterate. If you volunteer for 1700 hours of service, you can earn $4,275 to be used as a loan payment
The volunteer student loan forgiveness programs are designed to encourage volunteer work
Public Loan Forgiveness Service
The newest federal student loan forgiveness program was created by the College Cost Reduction and Access Act of 2007. This program will lead to debt forgiveness after you work 10 years in a public service job. Other requirements include:
- Must make at least 120 loan payments on a Federal Direct Loan
- Payments made after 10/1/2007 count towards the 120 loan payments
- Deferment and forbearance periods do not count towards the 120 loan payments
- Must be employed in a public service position during the period the 120 loan payments are made
Military Service
The National Guard offers a $10,000 Student Loan Repayment Program. You must contact the National Guard to find out if you are eligible for this program.
Legal and Medical Studies
Yet another student loan forgiveness program is tied to law and medical study programs. You can find out more about the various loan repayment assistance programs at Equal Justice Works and the American Bar Association. These forgiveness programs are managed by the individual law schools so that should be your first point of contact.
There are also a number of loan repayment assistance programs for medical students. Following is an example of the types of student loan forgiveness opportunities:
- National Health Service Corps (U.S. Department of Health and Human Services)
- Nursing Education Loan Repayment Program (U.S. Department of Health and Human Services)
- NIH Loan Repayment Programs (National Institutes of Health)
- Veterinary Medicine Loan Repayment Program (U.S. Department of Agriculture)
There are many others and a good place to begin searching for additional opportunities is through the colleges and universities, medical professional groups, medical foundations and national health agencies. In addition, when looking for a job you should ask medical facilities if they have a loan forgiveness program.
Many of the student loan forgiveness program requirements include working in an economically disadvantaged area or with special needs groups.
Teaching
Partial forgiveness of a student loan is possible for teachers who work in schools located in low-income areas. The National Defense Education Act allows for forgiveness of 15% of the Perkins Loan for each of the first 2 years of service. In the third and fourth years, 20% of the loan can be forgiven each year. For the fifth year, 30% of the loan is forgiven.
The U.S. Department of Education offers a number of teacher loan forgiveness programs.
You can check with the American Federation of Teachers for additional student loan debt forgiveness programs.
Other Routes to Forgiveness
There are many other programs for student loan forgiveness.
- Cancellation of Perkins and Stafford loans for working in designation jobs serving children, families, the disabled and others (U.S. Department of Education)
- Federal Student Loan Repayment Program gives federal agencies the right to create forgiveness programs so they may attract qualified employees
- Math and science teachers teaching in high need secondary schools can have part of their Stafford loans forgiven
- State loan forgiveness programs for those working in medical fields or law enforcement
There are many different loan forgiveness programs and the ones listed are just a sample. You have to shop around for the loan forgiveness programs because there is not a single location where they are all listed. A good place to start is by contacting the college or university financial aid office. You can also contact the federal and state education agencies.
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