I have never had student loans. I fortunately paid for college with scholarships and working. (I saved by commuting.) While earning my master’s, I had an assistantship, which paid for my tuition and fees.
I know this is not the case for most people. Federal student loan debt is soaring. As of June, it exceeded $1 trillion nationally. But I didn’t escape school debt completely. I married into my husband’s school loan (for better or worse, right?).
I started looking into ways to pay it down faster and learned about two loan forgiveness programs. Both are worth considering, although the parameters are strict and many people will not qualify.
The first is called the Public Service Loan Forgiveness Program (PSLF). This is for people who work in the public service sector. For instance, people working for the City of Toledo could qualify for this if they have a Federal Direct Loan. Someone who works for a nonprofit like the Toledo Area Humane Society would also qualify. The nonprofit has to be a 501(c)(3). Loans under the Federal Family Education Loan Program or Federal Perkins Loan are ineligible, but if people consolidate them into a Direct Consolidation Loan, they could possibly take advantage of PSLF.
The one thing that a lot of people overlook about this forgiveness program is the requirement of making 120 monthly payments while working at a qualifying public service organization. This means nothing will be forgiven until working at a qualifying agency for 10 years and making every payment, every month, on time.
While people might specifically go into jobs to get loan forgiveness, those who are on a 10-year standard repayment plan would obviously not benefit. Those interested in this program should repay on the Income-Based Repayment Plan, Pay As You Earn Repayment Plan or the Income-Contingent Repayment Plan.
An attorney with loads of student debt who wants to be a public defender might be a great candidate for this program, for instance. The impetus behind loan forgiveness is to make sure people can pursue jobs in the public sector, even if they don’t pay as well as a private company.
Chris Greene, spokesman for the Office of Federal Student Aid, said as of June, 48,000 borrowers have sent in their information and “we are tracking their eligibility.” No one has benefited yet because this program started in 2007, which means the first forgiveness will come in 2017.
“Given the investment required to pursue higher education, these are great benefits to help students manage their repayment obligations,” Greene said.
Another possibility is Teacher Loan Forgiveness, which I looked into because my husband is a teacher. This requires five years of teaching in a school that serves low-income families. Up to $17,500 on the following loans would be forgiven: direct subsidized and unsubsidized loans and subsidized and unsubsidized federal Stafford loans. Some teachers might be eligible for loan cancellation if they have a loan through the Federal Perkins Loan Program and they teach at a low-income school or teach a certain subject.
Yes, this is complicated, but that shouldn’t stop people from at least exploring the eligibility. My husband didn’t meet the qualifications, but yours might.
“They should absolutely look into it,” Greene said. “These are great programs and great benefits, but they need to look at the details and the requirements for qualifying. The whole purpose is to help kids manage repayment obligations while pursuing a career they are passionate about.”
For more information, visit http://studentaid.ed.gov and click on Repay Your Loans.
Email Brandi Barhite at bbarhite@toledofreepress.com.
