Student Loans Forgiveness
Student Loans Forgiveness – Other Options You May Not Be Aware Of
There are many programs for student loans forgiveness and Public Service Loan Forgiveness is but one of them. These programs were designed to help student loan borrowers who are having financial difficulty in repaying their loans.
A couple of the popular student loans forgiveness programs are in the fields of health care and teaching, and are offered by many states across the nation. Many, if not most, student loan borrowers are aware of the federal student loans forgiveness programs, such as the PSLF, and also the repayment programs that are income driven.
However, there are many other options available that students may not be aware of. As a matter of fact, an e-book was written describing these options. For your reference it is called “100 Ways to Get Rid of Your Student Loans without paying them“”. The following are a few examples that we have taken from this book.
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- Loan forgiveness based on your profession – Medical personnel, attorneys, and teachers qualify because these professions are sorely needed in the low income areas. Plus, their overall student loan debt tends to be substantially higher.
Because of that, these graduates must choose the higher paying jobs in more lucrative areas to repay their loans. They simply can’t afford to accept the lower paying jobs in low income areas.
Over the years, a number of student loan repayment programs have been started to help these high demand professionals. As an example, a highly qualified teacher is eligible to receive up to $17,500.00 in student loans forgiveness, as long as they teach in a low income serving school for five years. If the graduate is a Perkins Loan borrower, and agrees to the same type of service, their entire loan can be forgiven.
Another example is certain health care professionals who are eligible for up to $40,000.00 in student loans forgiveness. This program requires a two year service commitment for providing health care to the American Indian and the Alaska Native Committee. Those who sign up with the National Health Service Corps for a similar two year commitment, can receive up to $50,000.00. Serving beyond the two year period makes them eligible for more awards. These options will pay federal as well as private loans and are a significant benefit.
- Loan forgiveness based on where you live – This is without a doubt, the largest category – and it is the state based student loans forgiveness programs. These programs are also designed to help those who live in rural and/or low income areas. Again, they target health care professionals who treat people and animals, teachers, and attorneys.
One of the favorite programs is in California and is the CDA Foundation. A dental graduate can serve three years and be eligible for up to $105,000.00 in student loans forgiveness. Another one in Michigan, will repay federal or private loans up to $200,000.00 for eight years of medical service. This includes dentists, certified nurse midwives, physicians, psychologists, nurse practitioners, psychiatric nurses, and many others.
Here’s one for farmers who graduated from a New York college or university. If you received an undergraduate degree and agree to operate a farm for five years full time, you will be eligible for student loans forgiveness for up to $50,000.00 of Federal, private, or state loans. In North Dakota, a loan program for veterinarians will repay up to $15,000.00 for the first two years of service and for the third and fourth years, up to $25,000.00. This would be for serving in areas for large food animals that are in high need.
- Loan forgiveness based on how you give back – Most individuals are familiar with the student loan repayment programs sponsored by the military. The original GI Bill was the beginning of the concept of government financial aid. If a career in the military isn’t for you, you can still find other ways to serve where you can receive student loans forgiveness.
You can become a member in AmeriCorps and receive various amounts that are based on the year and program where you serve. For the year 2015, $5,700.00 is the most you can earn under those programs.
There are many other types of short term programs available if you can’t make any long term commitment. For instance, the website Sponsorchange.org will match sponsors and volunteers. In these cases, the sponsors agree to pay certain amounts towards the volunteer’s student loans when they provide various services at nonprofit participating organizations.
Don’t sign any of these contracts where you agree to serve and perform various services in exchange for student loans forgiveness before reading all of the fine print. Non-performance on some of these contracts may generate taxable income, and in many, if you don’t fulfill your service commitment, you still have your student loan to repay. Are the amounts of student loans forgiveness guaranteed or can they be changed because of budget restraints? What types of student loans are eligible for these repayment programs?
These questions and others are critical for you to know prior to agreeing to any type of commitment of your services or in your financial planning for them. And one very important note to remember above all – NEVER and we mean NEVER, assume any type of student loan debt thinking that some program will be established later to forgive that debt.
Remember this as well – All of these student loans forgiveness programs are tied into federal and state budgets that are subject to change at the whim of politicians, some of whom are self-serving
Gust Lenglet is the CEO of HBS Financial Group, Ltd., an accounting & tax preparation firm in Maryland. He has more than 25 years of experience in the banking and financial industry. Gust started his career as a loan officer at a major national bank, and then moved on to become controller of a multi-state law firm. In recent years, he has written many financial articles that have been published on Ezine Articles and many websites.