by Shirley Fenlason
Have you heard of college loan forgiveness or repayment programs? Whether you’re a college student or graduate, they’re definitely worth checking out. If you meet the loan and program-specific criteria, these programs may help you restructure or even reduce your college debt.
On April 15, I read a CNNMoney.com article, Get a job, ditch your student loans, which highlighted student loan forgiveness programs. The piece focuses on programs that are part of the College Cost Reduction and Access Act of 2007.
The Income-Based Repayment (IBR) program is based on your family size and income with a payment cap of 15% of your monthly disposable income. If you make these payments for 25 years, your remaining student loan balance is forgiven. Though the program doesn’t start until July 2009, you can sign up for email updates now.
The Public Service Loan Forgiveness (PSLF) is for Direct Loan borrowers who are employed in full-time public service. As long as you remain in qualifying full-time public service while making 120 payments over the course of ten years (beginning after October 1, 2007), your remaining student loan balance is forgiven.
Finaid.org is a great resource for student loan forgiveness/repayment programs. It lists specific criteria and benefits by categories and programs along with contact information. For instance, if you serve with AmeriCorps for one year, you can earn $4,725 in student loan repayment. Programs are available for student loan borrowers doing volunteer work, serving in the Army National Guard, teaching, or working in the medical or legal professions. Criteria vary per program so be sure to do your research!