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, download the Nurse Corps Loan Repayment program PDF.
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.
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