According to a report published by the National Student Loan Data System for Students, an estimated 25% of the American workforce may be eligible to benefit from forgiveness programs. However many people lose out of the benefits of student loan forgiveness simply because they presume they are not eligible.
Taking the time to learn about how student loan forgiveness works and which loan forgiveness programs you are eligible for may take a fair amount of legwork but it is totally worth it when you consider that it can save you thousands of dollars that you do not need to pay back.
4 Government Programs That Qualify You For Student Loan Forgiveness
You may be eligible for student loan forgiveness if you meet any one of these criteria:
- You enlist in the military – Each branch of the military, from the Army to the Marines, to the Air Force, has its own unique student loan forgiveness program. In most cases, the amount of the forgiven loan will depend on the level of rank achieved in their chosen military branch. You will have to contact your preferred branch to find out all details regarding the loan forgiveness and what your options are.
- You become a public school teacher in a low income area – The Teacher Forgiveness Program introduced by the government will forgive 100% of your Perkins loans or up to a limit of $17,500 of your federal Stafford loans if you teach full time for 5 consecutive years at certain low-income schools. If you want to avail of this program, will need to find out which elementary and secondary schools are covered under this scheme.
- You work in public service, the government, or with a non-profit organization – Several humanitarian and public-sector jobs are eligible for loan forgiveness under the Public Service Loan Forgiveness Program. Under this program, individuals who work as full time employees in the public service or non-profit sectors can have the balance of their outstanding debt forgiven if they meet two requirements—the money is borrowed under the William D. Ford Federal Direct Loan program and the borrower has already made 120 qualified loan payments.
- You apply for the income-based repayment plan – Experts advise all students to apply for this program. The income-based repayment plan adjusts your monthly loan payments so that it is never more than 15% of your discretionary income. This is the amount of money you earn that falls above the federal poverty level. Some new graduates earn so little, they qualify to make zero dollar payments. After 25 years of making these adjusted loan payments, your remaining balance will be completely forgiven.
One of the most important things to keep in mind is that student loan debt forgiveness is only applicable to federal student loans. You may not be eligible for student loan forgiveness if you have taken a private loan.
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