For every second you spend reading this article, student loan debt in America rises by $2,700, according to MarketWatch. Graduates today are more burdened with student loans than at any other time in history.
But it’s not all bad news. If you have private student loans, you could get repayment help from state- and university-sponsored organizations.
Groups around the country offer federal and private student loan forgiveness programs to eligible borrowers. If you qualify, you could receive free money to help repay your student debt.
So, how do you know if you’re eligible for free money toward your private student loans? Here are the top five criteria.
5 ways to qualify for private student loan forgiveness programs
1. You work in a qualifying career
Many repayment assistance programs require that you work in a certain occupation, such as a teacher, doctor, lawyer, or veterinarian. For example:
- The Teach NYC program, for instance, awards up to $24,000 in loan assistance to teachers, school psychologists, and other school-based clinicians.
- Lawyers in New Mexico can receive up to $7,200 per year from the New Mexico Public Service Law Loan Repayment Assistance Program.
- Rhode Island doctors may earn $80,000 over four years from the Rhode Island Educational Loan Repayment Program for Primary Care Providers.
That being said, not all state-based loan assistance programs offer help repaying private student loans. Some, like the Illinois Teachers Loan Repayment Program, only offer money toward federal student loans.
Before applying, make sure to check which types of loans are eligible for repayment assistance.
2. You commit to a service contract
Before giving you any money, some programs require a commitment from you. Many stipulate that you agree to a contract of two years or longer. The Massachusetts Loan Repayment Program, for example, asks for two years of full-time work or four years of part-time work in a healthcare job.
These types of contracts are much more lenient than some federal loan forgiveness programs. The Public Service Loan Forgiveness federal program, for example, requires a full decade of qualified work before you receive any aid.
Many state-based programs only ask for a two-year commitment. After a couple of years, you could choose to continue on or seek employment elsewhere.
3. You serve in a high-needs or critical shortage area or organization
In addition to how long you work for, most repayment assistance programs also care where you work. To qualify, you may have to commit to a high-needs or critical shortage area.
Teachers, for instance, may work in rural or urban schools with limited resources. Doctors might take on hard-to-fill positions and serve low-income populations; lawyers could assume public service jobs with relatively low salaries.
Some programs offer student loan repayment assistance to offset a low salary or encourage graduates to pursue public service jobs. While student loan aid is a great perk, you may also find yourself in a challenging work environment. Before committing, make sure to consider where you want your career to go.
4. You’re a state resident
Some student loan repayment assistance programs require that you live and work in a certain state. State residency may be a secondary requirement that comes after your professional qualifications.
The Alfond Leaders program, for instance, awards up to $60,000 to STEM professionals who live and work in Maine. But the Kansas Rural Opportunity Zones program actually gives money simply for moving to Kansas.
This program offers up to $15,000 to people who establish residency in one of Kansas’s designated counties. With this benefit, the Kansas Rural Opportunity Zones program seeks to encourage people to live and work in Kansas.
Wherever you live, check out what your state offers in the way of loan repayment assistance. If you meet the other requirements, you could get major help repaying private student loans.
5. You graduated from the right university
Not all student loan repayment assistance programs are state-sponsored. Some universities offer student loan help to their graduates.
The University of Denver Sturm College of Law, for instance, offers loan repayment assistance to its alums. You must be a practicing lawyer with an annual income less than $75,000. If you qualify, the program could cover between 15 and 75 percent of your monthly student loan payments for up to five years.
University-sponsored loan repayment assistance programs are not nearly as common as state-sponsored ones, but it can’t hurt to check whether your university offers aid. If you haven’t started college yet, you may prioritize a school that offers loan assistance to its graduates.
Prepare to pay taxes on student loan repayment assistance
If free money toward your student loans sounds great, that’s because it is. But there may be one caveat.
Some rewards from private student loan forgiveness programs are treated as taxable income. Depending on the program, you may have to pay income taxes on assistance you receive. Loan assistance for healthcare professionals is often exempt, but other types may not be.
Of course, the repayment award could still be a lot greater than any tax bill. Just make sure you’re prepared to pay taxes on any awards you get.
Speak to your lender about repayment options
Private student loans tend to have less flexible repayment options than federal ones, but some lenders will help if you’re struggling to make your payments.
If you’ve run into financial hardship, speak with your loan servicer about your options. Some offer interest-only payments or forbearance to help you through a rough patch.
And if you qualify for loan repayment assistance, you could soon earn thousands of dollars to put toward your loans. To find out more and apply, check out our complete list of student loan repayment assistance programs around the country.
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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 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% 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.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
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.
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