year in consolidating their loans.
Who Is Eligible For Student Loan Forgiveness?
Your eligibility for student loan forgiveness depends on the type of student loan in question. If you have a federal Stafford loan, you may be able to get all or part of your loan forgiven through certain types of volunteer work, public service, military service or medical practice.
Another option for Stafford Loan forgiveness is the Army National Guard’s Student Loan Repayment Program, which can help you earn up to $10,000 toward loans.
Law school graduates may earn Stafford Loan forgiveness by working in a public interest or nonprofit position.
By volunteering with the Peace Corps, 15% of your Perkins Loan balance will be forgiven for each year of service.
As a full-time elementary or secondary school teacher in a low-income community, you can have 15% of your Perkins Loan forgiven for years one and two of employment, 20% in years three and four, and the remaining 30% in year five. Stafford or Perkins loans may also be forgiven if you teach an understaffed subject such as math, science, or special education or work in a school in a low-income neighborhood.
For medical school graduates and nurses, working in undeserved areas can qualify you for student loan forgiveness under state programs.
Student loans are also forgiven upon death.
If you work for a federal agency, your employer may repay up to $10,000 of your loans per year, with a maximum of $60,000, through the Federal Student Loan Repayment Program. Also, by working full-time for 10 years in certain public service jobs and making at least 120 loan payments on your own, your remaining student loan debt may be forgiven. Potentially-eligible positions include those in nursing, government, police, fire, social work and nonprofit organizations.
Many programs that offer student loan forgiveness offer lower pay than what you could earn in a regular job. You might be able to repay your loans more quickly through a job with greater earning potential, even if it doesn’t offer loan forgiveness. Regardless of your employer or profession, however, there are also income-based programs that will forgive your remaining loan balance once you’ve made payments for 25 years.
If you do have all or part of your student loans forgiven, be aware that the IRS may consider the forgiven debt as income and you may have to pay tax on that amount. Also, if you choose to participate in any loan forgiveness program, make sure to obtain written verification before you begin of what amount will be forgiven and under what circumstances.