Student loan forgiveness programs
Student loan forgiveness programs seem too good to be true. How do you qualify?
BY ROBERT FARRINGTON, FORBES – 07/09/2015
Student loan forgiveness programs are the Holy Grail for student loan borrowers. Everyone wants free money to pay off their loans, but these programs can be hard to find. Yes, there are some programs being offered by the Department of Education, but what many borrowers don’t realize is that there are a lot of specialty student loan forgiveness programs available.
It’s estimated that over 50% of student loan borrowers qualify for some type of student loan forgiveness. While not all programs may pay off the full loan balance, any amount helps. Here are ways to locate student loan forgiveness programs.
Federal Student Loan Forgiveness Programs
The Department of Education maintains several different student loan forgiveness programs. The most popular one is the Public Service Loan Forgiveness Program, which offers student loan forgiveness to individuals that serve the public for at least 10 years. However, there are other popular student loan forgiveness programs that borrowers may be able to qualify for as well.
Along with the stand-alone programs, the Department of Education also combines student loan forgiveness into several student loan repayment plans. These “secret” student loan forgiveness programs offer student loan forgiveness at the end of the repayment term, for any remaining balance on the loan. For example, the Pay As You Earn (PAYE) Plan offers loan forgiveness at the end of 20 years of payments. Income based repayment offers loan forgiveness after 25 years for existing borrowers and 20 years for new borrowers.
State Student Loan Forgiveness Programs
Beyond the Federal student loan forgiveness programs, almost every state in the United States offers various student loan forgiveness programs. There are currently over 120 different student loan forgiveness programs in 45 of the 50 states, and in the District of Columbia. These student loan forgiveness programs cover a variety of borrowers, but focus mainly on specialty professions – such a healthcare fields, legal services, and more.
Some states, like Kansas, have very few restrictions – including one program where you simply must live in a designated county and you can receive loan forgiveness regardless of your career choice.
However, it can be tough to locate all of the different state-sponsored student loan forgiveness programs. Luckily, there is a great resource to connect borrowers with student loan forgiveness programs. The free tool is: Student Loan Forgiveness Programs by State. Simply go to the tool and click on your state, and you can see all of the student loan forgiveness programs that your state offers.
School-Based Student Loan Forgiveness Programs
Many colleges and universities have started offering student loan forgiveness programs as well. These programs are typically designed to help alumni while also fulfilling a public good.
For example, Columbia Law School offers a generous student loan forgiveness program where the university will gradually repay the student loan debt of graduates who remain in the public service for at least three years. Harvard offers a similar program for medical students who completed their residency and are pursuing a career in public service health care.
Most schools don’t typically advertise these programs, and the amount of funds they have are usually limited. For students interested in these programs, contact your alumni office or your financial aid office. The programs are typically handled out of one of these offices, based on where the funds are coming from.
Finally, some counties also offer smaller student loan forgiveness programs tailored to the specific needs of the community. These programs are designed to bring college graduates or professionals with certain skills into the community. When moving into an area, especially a rural area with a need of a special skill set (such as dentistry or nursing), check with your local county offices and see if they offer any student loan forgiveness or incentive programs.
Sometimes these programs fall under a different name as well. Make sure you are checking for student loan forgiveness, student loan assistance, and student loan repayment programs. All of these variations are essentially free money to help you pay down your student loan debt.