Did you know seven in 10 college students take out loans to pay for school, graduating with an average balance of more than $35,000?
This isn’t exactly the ideal way to start out your professional life. But with skyrocketing tuition costs, most students don’t really have a choice. People need to either skip college altogether, or take out loans to cover the costs. It’s a tough choice.
What if I told you it wasn’t the only choice? There are ways to get the degree of your dreams and have at least some, if not all, of your student loan debt forgiven.
No, really — it’s true. More than 40 million Americans and counting have student loan debt, and those sky-high debt loads are negatively affecting certain job markets.
Since no one wants to graduate college with $30,000 in debt to take a job in which they only earn $30,000 per year, necessary community roles are going unfilled. If you are willing to take a low paying and/or high-risk public service job, you may be eligible for a federal student loan forgiveness program to pay off some or all of your student loan debt.
These forgiveness opportunities have emerged as a way to entice new workers into less glamorous and less appealing job markets. Here’s a list of careers that offer student loan forgiveness.
1. Federal Agency Employees
Here’s a little-known fact that applies to all federal agencies: if they are having a hard time finding new employees to fill open slots, they are allowed to offer student loan repayment assistance. To qualify, the new employee must sign a contract to work for the federal agency for a minimum of three years. The agency is allowed to pay up to $10,000 per year per employee for federally insured loans, but the total assistance given cannot exceed $60,000 per person.
2. Public Service Careers
Federal Perkins Loans offer loan cancellations for full-time public service employees, whose loans have not been consolidated.
Some of the public service workers who may qualify are family and child services employees, law enforcement and correctional officers, and public defenders.
Public servants with loans other than Federal Perkins Loans are eligible to pursue loan forgiveness through the Public Service Loan Forgiveness Program (PSLF). The PSLF is available to any worker of a government organization at any level (federal, state, local, etc.), tax-exempt organizations, or for-profit organizations with a qualifying service.
Workers for labor unions, political parties, and for-profit organizations that don’t offer a qualifying service are not eligible for PSLF.
In order to receive PSLF as a public servant with a qualifying loan, you need to have made at least 120 qualifying monthly student loan payments. Even if you have reached 120 qualifying payments, PSLF is not guaranteed, and you will still need to apply.
Please note the PSLF program is still being developed, but the applications will be available prior to October 2017.
Also, debt forgiven through the PSLF program is not considered income. Unlike certain other programs, you will not be held liable for income tax on the forgiven amount.
3. Student Loan Forgiveness for Doctors
There are several options for doctors in need of student loan repayment help.
The Association of American Medical Colleges (AAMC) maintains a list of scholarships and federal student loan forgiveness programs for doctors by state.
Additionally, medical professionals who serve in the military have access to forgiveness programs as well. For example, through the Navy Financial Assistance Program (FAP) , medical residents receive an annual grant of $45,000 on top of residency income, which can be put toward medical school debt.
Check out our full guide to student loan forgiveness for doctors to see more options.
4. Student Loan Forgiveness for Lawyers
In addition to public service forgiveness options targeted specifically at graduates working in law, there are a few sources of loan repayment help lawyers can take advantage of.
For instance, every spring, the Department of Justice opens up its Attorney Student Loan Repayment Program (ASLRP) to help recruit and retain new talent. Justice Department employees must have at least $10,000 in federal student loans to qualify.
For those who want to work as public defenders, the John R. Justice Student Loan Repayment Program provides up to $10,000 per year, with a maximum award of $60,000.
There are dozens more programs made specifically for borrowers with law school debt. See our comprehensive list of Loan Repayment Assistance Programs for lawyers by school and state for details.
5. Automotive Workers: SEMA Loan Forgiveness Program
Any automotive aftermarket industry manufacturer who is an employee of the Specialty Equipment Market Association (SEMA) can apply for the SEMA Loan Forgiveness Program.
The SEMA program awards a minimum of $2,000 to winners of the program each year, to be applied to any outstanding student loans. The top recipient picked each year receives a $5,000 award to apply to student loan debt.
To be eligible to apply for the program, you must have been a SEMA employee for at least a year, hold a degree or certificate of completion from a college or technical school, have at least a 2.5 GPA, and you must have at least $2,000 of outstanding student loan debt.
6. Loan Forgiveness for Nurses
If you are a registered nurse, an “advanced practice registered nurse” such as a nurse practitioner, or a Health Professional Shortage Area (HPSA) facility nurse, you may be eligible for student loan repayment through the Nurse Corps Loan Repayment Program.
The nurses chosen to receive assistance through the Nurse Corps Loan Repayment Program will be forgiven 60 percent of their qualifying student loan balance, in exchange for a minimum two-year service commitment. Also, qualifying participants may receive an additional 25 percent off their original loan balance if they complete a third year of service.
Please note that in this program, the full loan award amount is taxable. The amount you’ll pay in taxes will be far less than the amount of the loans, but it a consideration to bear in mind.
If you would like to better under the qualifications and fine print of the program, check out the Nurse Corps Loan Repayment program requirements.
7. Teacher Loan Forgiveness
If you teach in a low-income school district, as a special education teacher, in an underemployed subject area, or in a teacher shortage area, you may qualify for the Teacher Loan Forgiveness Program.
If you qualify, you could receive between $5,000 and $17,500 in loan forgiveness depending upon what subject matter you teach and your number of years of service.
Please note that to qualify, your student loan debt must be from subsidized loans, direct unsubsidized loans, subsidized federal Stafford loans, and unsubsidized federal Stafford loans.
If, however, your student loans were obtained through the Federal Perkins Loan Program, you may be eligible for the Teacher Cancellation program.
Through this program, you could potentially receive cancellation of up to 100 percent of your Federal Perkins Loan.
In order to qualify, you need to teach at a low-income school, teach an underemployed subject area, or serve as a full-time elementary or secondary school special education teacher.
The cancellation of your student loan debt will come in steps. For the first and second years of teaching, you will receive a 15 percent cancellation of your loan. For the third and fourth years, you will receive a 20 percent cancellation of your loan. For the fifth year of teaching, you will receive a 30 percent cancellation of your loan.
An added bonus is that each amount canceled per year also includes the cancellation of any interest that had accrued through the year.
8. Volunteer Organization Workers
Did you know that certain volunteer organizations offer student loan forgiveness opportunities?
Don’t let high student loan debt deter you from taking the opportunity to help others.
Certain relief organizations like AmeriCorps, Peace Corps, and Volunteers in Service to America (VISTA) all have student loan awards or repayment options. You can apply for these after you have completed your term of service with the organization.
The terms and conditions on these programs vary tremendously, so visit their websites to learn more about student loan programs for volunteers.
Student Loan Forgiveness Programs: A Life-Changing Decision
You should note that student loan forgiveness programs are not like Monopoly. You can’t land on GO and just collect the money. Most student loan programs have strict legal requirements, contracts, and a minimum term of employment. Also, you have to be current on your student loan payments. Your loans cannot be in default.
Once you meet the requirements, though, you will receive debt repayment, cancellation, or forgiveness. Giving just two or three years of your professional life to a less-than-attractive job opportunity may be the answer to your student loan problems.
Every student loan repayment and forgiveness program has its own set of qualifications and eligibility requirements, so make sure that you do your research before pursuing any of these or other loan forgiveness programs. This post on Public Service Loan Forgiveness is a great starting point in figuring out whether or not you qualify.
If you do qualify, these programs could be a life-changing way to unsaddle yourself from burdensome student loans.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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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
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
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.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|