This article comes from the Campus Contributor Network. Over the course of the semester, students from across our campus outreach program will analyze their school’s finances and assess the overall return students see on their educational investments.
As we have discussed in my past few posts, going to college is pretty expensive. In order to finance their education, many students have to take out thousands of dollars in student loans that they are expected to pay off after their graduation. This places a heavy burden on students that are already dealing with their transition from college to the workforce.
However, there are programs that can help students make their debt more manageable for them to pay off after gradation. Loan forgiveness programs are two examples of programs that all Penn State students should know about because they can be crucial to helping students repay their debt.
Student loan forgiveness
Student loan forgiveness programs are programs that allow former students debt relief based upon a range of criteria including income levels and career fields. Loan forgiveness programs almost always only apply to government-based loans and as opposed to private loans.
Forgiveness for Teachers:
Loan forgiveness programs are generally offered for careers that include an element of public service. Both Pennsylvania Higher Education Assistance Agency (PHEAA) and Federal Student loans are subject to forgiveness programs based upon the graduate’s work in teaching or other forms of public service.
There are two loan forgiveness programs for teachers. There is Teacher Loan Forgiveness for “Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, and Unsubsidized Federal Stafford Loans” and Teacher Cancellation for Federal Perkins Loans.
The Teacher Loan Forgiveness Program can help teachers to get a total of up to $17,500forgiven from their Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, and Unsubsidized Federal Stafford Loans. In order to qualify for this loan forgiveness, teachers must teach in a low-income school district for five years and apply for the program through the federal government after you have met the five year teaching requirement.
The Teacher cancellation for Federal Perkins Loans Program can help borrowers have all of the Perkins Loans forgiven. In order to qualify, teachers have to teach in either a low-income school district or must teach in certain designated subjects or services. Such services may include teachers who teach in special education and subjects include those in which there are a shortage of teachers nationwide.
Forgiveness for Public Service:
There are also loan forgiveness programs for graduates who are entering public-service-orientated careers. The Public Service Loan Forgiveness Program (PSLF Program) forgives the remaining balance on your student loans after you have paid 120 specified payments on them while working in a job in public service.
For the purposes of the PSLF Program, public service is defined as jobs that involve work for government, non-profit agencies, or programs such as AmeriCorps of the Peace Corps.
In terms of the repayment logistics, it is not necessary for the 120 payments to be consecutive payments. If you are on the right track to receiving loan forgiveness for your public service career, it should take at least ten years for you to make the necessary payments so that you qualify for loan forgiveness. After you make your 120th payment, you are eligible to…