Ashleigh Allman remembers sitting in class during her master’s degree program, wondering about the weight of her student loan debt. Even after she landed her first teaching position a year later, she was no less concerned.
“On a teacher’s salary, I was like, ‘I don’t know how I’m going to pay this off,” said Allman, whose first-year pay was $42,261.
However, through her efforts, Allman later secured forgiveness for nearly half of her education debt — $17,000 of the approximate $36,000 she’d accrued for her undergraduate and master’s degrees.
Here’s how Allman benefited from student loan forgiveness, plus what you can learn from her experience.
Borrowing student loans for two degrees
Allman attempted to minimize borrowing for her political science degree. She participated in a work-study program and earned a scholarship through the Bonner Program, which provides funding to students for their participation in community service. Still, she left campus thousands in debt.
“It was sort of like, ‘This is just what you do, you take out loans, that’s what everybody’s doing,’” she recalled thinking. “After the grace period, I received a bill, and it said, ‘You owe this much money,’ and I was like, ‘What?’”
After flirting with the idea of law school, Allman instead chose to pursue a career in teaching. She knew either path would require taking on more student loan debt; at least she would be able to defer her payments while returning to school.
Allman’s 15-month program to earn a degree in “education and curriculum,” plus a license to teach elementary school, essentially doubled her loan balance. She moved back in with her parents and started making $360 monthly payments. But she knew another solution was needed.
Piecing together a strategy for student loan repayment
Faced with $36,000 worth of student loan debt, Allman couldn’t come up with one perfect solution. Instead, she took a piecemeal approach to her repayment.
At one point, she, her husband and their sons downsized from their house to a $500 apartment rental. She also worked side jobs, online and off — for example, she used her background in education to serve as a preschool teacher for her local church.
The Allmans threw as much of their savings as possible toward debt. However, seeking loan forgiveness was perhaps the family’s most important strategy.
Perkins loan cancellation
Given her level of financial need, much of Allman’s undergraduate borrowing was from the now-defunct federal Perkins loan program. That paid dividends later, because teachers are among the professionals eligible to apply for Perkins Loan forgiveness.
Unfortunately, Allman was late to the party.
“I worked for a year before I realized I could apply,” said Allman, who ended up teaching for 10 years before transitioning to become a stay-at-home mother and author of Smart Cents Mom.
Thankfully, Allman was also working at a qualifying school when she learned about the possibility of having her Perkins loans forgiven. Through five years of working as an elementary school teacher in Tennessee and Kentucky, her Perkins loan debt was wiped away.
To receive Perkins loan forgiveness, Allman needed to maintain her eligibility by working for a low-income school — and then prod her school’s administration to recertify her employment each year. She had to complete laborious forgiveness request forms, but it was well worth it.
Teachers Loan Forgiveness
With $12,000 worth of Perkins loans taken care of, Allman learned about a way to cancel at least a portion of the Stafford loans she had borrowed as a master’s student.
An elementary school teacher, she learned, could qualify for $5,000 worth of aid via the national Teacher Loan Forgiveness program. Fortunately for Allman, her Tennessee school was easily found in the Department of Education’s directory of eligible, low-income schools.
Secondary school teachers specializing in math or science and special education teachers at both elementary and secondary levels can receive up to $17,500 via the program. But those applying for both the $5,000 and $17,500 levels of forgiveness need to meet eligibility requirements, such as not being in default on outstanding loans at the time of application.
In Allman’s case, after five years of teaching, all she and an administrator needed to do was complete the Teacher Loan Forgiveness application.
Learn from Allman’s repayment experience
With two effective doses of forgiveness, Allman drastically reduced her debt, loosening the stranglehold on her family’s finances. Midway through 2018, she realized she could keep making her monthly payments — or end her debt once and for all.
“I was shocked at how much money I was basically throwing away,” Allman said. “It motivated me to pay one lump sum to take care of it.”
An early-November payment of $956.12 accomplished precisely that.
Of course, Allman still looks back on her repayment with some regret. She wishes she learned about loan forgiveness for teachers earlier so that she could maximize her benefits; for example, she wasn’t able to count her first year of teaching as an eligible experience in her initial forgiveness application.
If you find yourself facing a mountain of student loan debt, investigate your options for repayment assistance. Like Allman, ensure your eligibility for a program before going to the trouble of applying. Generally, loan forgiveness programs have strict, black-and-white requirements.
Also, as Allman learned, you should note that there may not be a magic bullet to easily take care of your entire loan balance. Consider piecemealing your repayment strategy, whether that’s by cutting back on household costs, taking on side gigs or, yes, asking for forgiveness.
“Stick with it until you get your loans paid off,” said Allman. “If you’re able to do loan forgiveness, make a plan for what you would do with that money — don’t just let it waste away.”
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.46% – 6.97%1||Undergrad & Graduate|
|2.57% – 8.44%4||Undergrad & Graduate|
|3.05% – 6.47%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|