There can be no better news for a student loan borrower than to hear that their loan has been forgiven. This means that a portion, or perhaps all of the loan is cancelled and you no longer have to budget part of your income towards making your monthly student loan payments. Keep in mind that this option is not available to every student loan borrower, but there are special situations in which all or part of a loan can be forgiven.
You must remain realistic and realize that there are only a few specific circomstances in which your student loans may be forgiven. These situations are outlined below.
Volunteering
If you volunteer for certain organizations, you may qualify for loan forgiveness.
-$4,725 can be used toward your student loans if you serve in AmeriCorps for 12 months or more.
-Peace Corps volunteers can have 15% of their Perkins loan cancelled for each year of volunteer service, up to 70% of the total loan amount. They can also have their Stafford and consolidated loans deferred.
-For 1700 hours of service, Volunteers in Service to America may receive $4,725.
Teaching
Students who become full time teachers may have part of their student loans forgiven in certain circumstances.
If you become an elementary or secondary school teacher with students from low-income families, a certain portion of your Perkins Loan can be forgiven, depending upon the length of your service.
- 15% for years one and two
- 20% for years three and four
- 30% for year five
Check with your school district administration to determine whether your school is eligible for loan forgiveness under these provisions. Teachers may also be eligible for other loan forgiveness programs depending upon the state in which they teach.
Legal Professions
If you take a public service or a non-profit position after graduation, some law schools will forgive your loans. Visit the Equal Justice Works website for more details regarding cancelling your law school loans.
Medical Professions
The National Health Service Corps will forgive student loans for registered nurses and physicians who work in medically underserved areas.
Be aware that the criteria for forgiving student loans may differ between federal and private student loans, and among the groups forgiving the loans.
If you find you don't qualify for any of these forgiveness programs, but you would still like to lessen your payments, consider consolidating your loans. This will allow you to spread out the payments over a longer period of time, thus lowering your monthly payments.
