The federal government has programs available where you can receive a partial or full forgiveness for your student loans if you meet certain qualifications. Here is a closer look at how these programs work and what you would need to qualify.
Teacher Loan Forgiveness
One of the more popular options available is for teachers that opt to work in low-income areas. The National Defense Act entitles these teachers to have up to $17,500 of their PLUS or Stafford loans forgiven if they serve in a low-income area full time for five years. To find out if the school you teach at qualifies under this program you can look it up in the directory.
Income-Based Repayment Plan
While this program won't forgive all your debts, you can use it to better manage your monthly payments. You can enroll in this plan by contacting your lender. What makes this an enticing option is you only pay 15% of your discretionary income monthly. In some instances, you might have $0 payments if you work a job with a low income. After making payments for 25 years through this plan you will have your remaining debt forgiven.
Public Service Loan Forgiveness Plan
If you borrowed money for school using the William D. Ford Direct Loan program and plan to work in public service, you can have some of your debt forgiven. Careers covered under this plan include full-time employment with a public service company, a government organization such as a college or agency, law enforcement, nursing, teaching and military service. You can access the full list of qualifying careers here. It's important to note that to qualify for this program you must make 120 payments (10 years) on your student loans. Once you make these qualifying payments you have the remainder of your debt forgiven.
Total and Permanent Discharge Program
In the unfortunate event you become permanently disabled, you might have the ability to have your total debt forgiven. The Total and Permanent Discharge Program can assist you with this by calling them at 888-303-7818. It's important to note that you will have to supply documentation, which might include:
- A letter from the Social Security Administration that states you receive disability benefits and your next review with be in the next five to seven years.
- For veterans, you will need to provide a letter from the U.S. Department of Veterans Affairs stating you can't receive employment due to a disability during military service.
- Your personal physician can also provide a letter on your behalf. In it they should state the reasons why your disability prevents you from having a job.
You can qualify for a loan discharge for multiple reasons. For starters, if the school you attended closed, falsified their education benefits or failed to provide you a refund when one was due, you could qualify. Furthermore, if you had a spouse or parent that was a victim of the terrorist attacks on 9/11/2001, you could qualify as well.
It's important to stay up to date on loan forgiveness programs, as they can change qualifications quickly. By doing so, you can identify a program you might qualify for, which could save you a significant sum of money.