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.”
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|2.17% – 4.47%6||Undergrad & Graduate|
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1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of Feburary 1, 2021.
2 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 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% 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 October 26, 2020, 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 10/26/2020. 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 protected], or call 888-601-2801 for more information on our student loan refinance product.
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3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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 0.15% effective Jan 1, 2021 and may increase after consummation.
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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 02/17/2021 student loan refinancing rates range from 1.91% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay.
5 Important Disclosures for SoFi.
6 Important Disclosures for PenFed.
Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.99%-5.15% APR and Variable Rates range from 2.17%-4.47% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.