Student Loan Forgiveness Basics
Student Loan Forgiveness Programs
Believe it or not, there are ways to get large portions of student loan debt completely forgiven. They are legitimately allowed to simply dissolve as though they were paid off. Of course, there is no magic wand, there are qualifications that must be met, it takes some time and some work, but student loan forgiveness programs do exist, and they can help get college grads out of debt well before the loans would have been naturally paid off.
Student loan forgiveness is a process by which student loans are forgiven, wiped clean off the slate with no negative ramifications whatsoever, in exchange for certain types of service for certain people that qualify or meet certain specifications. As of now, student loan forgiveness programs only exist for federal student loans, but still, that can equate to a substantial amount of money and years of payments that are simply washed away.
Essentially there are two types of student loan forgiveness programs, a federal program and state programs. Both types as mentioned only forgive federal loans, but if all qualifications are met, then the entire balance of the loan is forgiven, and both types of programs can be used at the same time so long as qualifications are met and the applicant is accepted. They take time and it is not guaranteed, but it can certainly help anyone burdened by student debt. Here are quick overviews if the two types of student loan forgiveness programs.
Public Service Loan Forgiveness Program:
This is the federal program that was started by President Obama. Essentially the entire amount of the loan will be forgiven so long as a person works in a public service occupation that is approved for this student loan forgiveness program. Also, the applicant must make 10 years of on time payment on the qualified student loan while working at that public servant job to meet the specifications. There are certain debt to income ratios that must be met as well as some other stipulations, but those are the basic requirements for the Public Service Loan Forgiveness Program. Again not all applicants are accepted so if interested and this type of student loan forgiveness program can help, it is best to get the application process started as soon as possible.
Loan Repayment Assistance Program:
These are the state run programs. These do vary based on your specific state, but they do not have as strong of requirements generally as the federal program. This student loan forgiveness program generally only requires a short term membership in a state run organization or a short term public service commitment of an approved form through the state. This program can be used in conjunction with the federal program in the case of multiple loans or while working on meeting requirements for the federal student loan forgiveness program. In both cases, student loan forgiveness can greatly help ease the impact and burden of long term debt associated with student loans, and can greatly improve a family’s finances.