Month: October 2016
5 Government Programs Compliment Student Loan Forgiveness to Repay Your Loans
Loan borrowers are always on a look out for a friendly loan repayment or loan forgiveness program. It is actually possible for a student loan borrower to apply for loan forgiveness and repayment based on the specific requirements. Doctors, teachers and nurses are top professionals vouching for the Student Loan forgiveness programs.
Here are three really easy options available in the Loan Forgiveness programs. They work in tandem with the directives from the Department of Education (DoE) and the government-sponsored loan programs.
1. Teacher Loan Forgiveness
If you are a full-time teacher and have complete five consecutive years of service, you are eligible for this Student Loan Forgiveness for teachers. There are two specific types of loan forgiveness programs for teachers—
- Teacher loan forgiveness on Direct Loans (subsidized/unsubsidized, both) and Federal Stafford Loans (subsidized/unsubsidized, both)
- Cancellation program for Perkin Loans
Teachers from the low-income families can earn a combined repayment support of up to $17,500.
2. Public Service Loan Forgiveness (PSLF)
This is a great option for volunteers as well as professionals serving in the public sector in government office or in NGO. Once you make the 120 monthly qualifying payments or 10 years of payments, the loan borrower can subscribe for a forgiveness on the remaining balance of the Direct Loans.
3. Income-driven plan
There are four income-driven repayment plans—
- Revised Pay As You Earn Repayment Plan (REPAYE Plan)
- PAYE Plan
- IBR Plan
- ICR Plan
These student loan forgiveness plans are driven by an incentive to reduce the monthly interest based on your income. Depending on the income, monthly expense and number of dependents in the family, the monthly loan interest is deduced as some percentage of that available income.
The repayment period is usually between 20-25 years depending on the choice of IDR plan. The remaining loan amount is forgiven after the end of the repayment period.
The eligibility to earn entry into the IDR plan depends on your borrowing date.
4. Join a military service
The federal government provides ample benefits and incentives to the Student Loan borrowers joining the military services as teachers, trainers, physiotherapists, doctors, nurses and other professional occupations. The DoE and the Department of Defence cap the interest to be paid every month for a certain period of time, thus earning a respectable forgiveness during the service.
The student loan benefits for the members of the armed forces are available for both federal and private loan borrowers. Here are 4 benefits offering Student loan forgiveness for nurses, doctors and teachers engaged in military services.
- Service members Civil Relief Act (SCRA) Interest Rate Cap
- Military Service Department
- Deferments after Active duty
- PSLF
- IDR Plans
- HEROES act waiver
The student loan servicer waives off full or part of the loan sum as per the military orders.
Student loan forgiveness for teachers, nurses and military personnel can be further guaranteed through regular interest payments, even if there is a deferment available against your account.
How to Take Advantage of Student Loan Forgiveness Program?
The Congress made massive inroads into resolving the increasing debt volume from Student loan portfolio way back in 2007. In 2007, the launch of the Public Service Loan Forgiveness program (PSLF) paved the way for student loan borrowers to plan their repayment strategy spread over a span of 10 years and more. The flexible income-based repayment plan was readily accepted by the low-income debtors who had a rather slow career growth. Inspired by the response of the PSLF, Loan forgiveness for teachers and other professionals were also introduced, making it possible for the low-income debtors to pay off the loan in time, but over a longer period of time.
If you are a Student Loan borrower, here are some really smart ways to take full advantage of the forgiveness program.
1. Work diligently as a volunteer
If you are working in a for-profit organization, you can double up your chances of loan forgiveness by volunteering for public service and NGO activities in rural and acute shortage areas or hamlets. Public health, education and law enforcement organizations are encouraged to employ teachers, nurses and military personnel with an incentivised loan forgiveness program and annual repayment bonuses for completing a year at service.
2. Work for 30 hours minimum
Employment requirements play a major part in deciding loan forgiveness for teachers and nurses. The loan servicers contact the employer for the number of hours worked in a week for a year before sanctioning the loan forgiveness for nurses and teachers.
3. Get ready for an underserved area
Federal health care service providers offer attractive incentives on loan forgiveness for nurses willing to work in an approved underserved region for a certain period of time. In addition to the salary and bonuses, the Federal Government encourage the nurses and doctors with respectable repayment bonuses. Before taking advantage of the loan forgiveness program for nurses working in rural areas, you should actually know the site well.
A site covered under the Health Professional Shortage Area (HSPA) list is a great place to start off a career, as they provide loan repayment assistance through numerous programs. One of the major loan forgiveness programs for nurses in HSPA is the National Health Service Corps (NHSC) Loan repayment plan, where an individual has to serve 2 years in full service or 4 years in half-service as a dentist, doctor, or mental health personnel.
4. Check eligibility in PSLF Partial Hardship Plan
When the annual amount due on a student loan borrower exceeds 15% of the discretionary income, the borrower can apply for entry into PSLF’s Partial Financial Hardship assistance. A public service with high debt to income ratio readily qualifies for the program. In order to earn forgiveness, most federal loan borrowers make reimbursements through Income-driven repayment plans. If you have really low income, you could be eligible for a repayment as small as $0 per month!
Obama Student Loan Forgiveness 