Careers that allow for cancellation of Student Loans
Though many people believe it is not possible to avoid paying a student loan there are many exceptions to this and one important one is related to the employer the student chooses after graduation. There are many federal programs that allow for debt forgiveness and cancellation that are offered by a variety of employers for a variety of different types of student loans. There are also state specific programs that any student should review prior to choosing a career and employer within their particular state.
The public service program for loan forgiveness and cancellation is very simple. It is allowed for Federal Direct Loans that are being paid using one of the repayment plans that allow for the public service forgiveness program. Under this program the borrower continues to make their payment and remain current on that payment for 10 years. There are specific rules relative to any payment default and these rules are subject to change but under normal circumstances after the 120th payment the loan can be forgiven without tax consequence to the borrower. This program is not available for Federal Family Education Loans (FFEL) nor is it available for Perkins loans unless those loans are consolidated into a Federal Direct Loan. Private non-federal student loans are not eligible for this program nor are they eligible to be consolidated into a Federal Direct Loan.
There are several popular student loan forgiveness programs that are available for teachers. Most of these credit the loan balance for each year of service up to a maximum amount. Many Perkins loan programs allow for the loan balance to be paid in full. Once such program that is available to FFEL, Direct loans, and some consolidation loans is the partial credit for each year that is taught in a low income qualified school up to a maximum of $17,500. Another is the teacher grant program called TEACH GRANTS program that provides $4,000 annually to those that are teaching within specially identified special needs areas within at risk schools. And yet another way for teachers to achieve full forgiveness is if they direct their career to operate under the public service 10 year full cancellation program. For those that chose teaching as an occupation there are numerous ways to reduce if not fully eliminate student loan debt.
Perkins Full Debt Cancellation
The following are some but not all of the ways in which a Perkins loan borrower can possibly qualify for full debt forgiveness. Of course each item has specific restrictions and ways in which to qualify but this list gives a good overview for items to research further:
- Full time educator in identified low income schools.
- Full time educator in subject areas that have been identified as having a shortage of teachers.
- Full time special education instructor in a not for profit secondary or not for profit elementary school.
- Full time nonprofit, public, or family service employee that serves at risk communities, families, and children.
- Some full time medical professions such medical technicians and nursing.
- Full time correctional or public law enforcement officer.
- Full time employee of the educational division of the federal Head Start Program.
- Active duty military with 50% or greater of their time deployed to a hostile environment.
Americorps & The Peace Corps
Depending on your service to Americorps or the Peace Corps you can be eligible for partial loan forgiveness, forbearance of payments or full loan forgiveness. Each is a specific situation and is affected by the way in which you interact with and serve the public through these organizations. The full loan forgiveness would be if your association and service qualifies under the 10 year public service program for federal loan forgiveness. If a student is considering these organizations for service it would be advisable for them to understand that ways in which their service can gain credits toward their outstanding student loan balance.
There are countless other programs that are available to those that are interested. One such program is through service in the National Health Service Corps and another is through private employers. It is important to always investigate and look for available programs that are offered and to make certain every student takes advantage of every program that is made available to them.
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