As the cost of a college education continues to rise, students are more and more reliant on student loans to pay for their schooling. Unfortunately, many graduate with thousands of dollars worth of debt that they realistically cannot repay. In response to this problem, and the growing need for good community servants, the government has offered a 10-year loan forgiveness program for those college graduates who use their careers to aid the general public.
For instance, a student’s loans can be forgiven after 10 years serving in a field of public service. These include education, the military, social work, public safety, and a variety of other fields outlined by the Department of Education. Once the 10 years have been served, the remaining portions of the student’s federal loans will be written off. Until the 10-year period has been served, however, the student will have to continue paying the debt. This only applies to loans taken out or consolidated through the federal Direct Loan Program, which means the money is coming directly from the government, not a bank or other lender.
There are some stipulations attached to this program. The most obvious is the fact that you will have to be working in a public service career for 10 years. If you switch careers or quit your job before the 10 years are up, you will not qualify for the loan forgiveness. Also, you must have made 120 monthly payments towards your loan before it will be forgiven. These must be monthly payments towards the Direct Loan Program, not any payments you made before consolidating your loans.
Additionally, the payments you make must be under a qualifying repayment plan. The catch for many students is that these required payments and the standard repayment plan often leave them with nothing left for the government to forgive. This is not a big deal, of course, because the debt is gone, but students may be frustrated at being stuck in a particular career in hopes of receiving a benefit, only to find that they get nothing when the 120 payments have been made. Only those students on the income-based or income-contingent repayment plans will likely still have money owed that the government can forgive.
If you are interested in helping society, live in a lower income bracket, and have a decent amount of student loan debt, this program could be helpful. Just do your homework first to make sure that you stand to benefit from the forgiveness after you are done serving your 10 year community service time. If so, the student loan forgiveness plan could be the answer to your student debt problem.