Managing Student Loans

Student loan forgiveness programs are increasing each year and are an extremely popular choice that are usually oversubscribed to. The term ‘loan forgiveness’ is rather misleading: it is rare that ones debts are wiped away by someone with the power to forgive them as if granting great largesse. It is far more apt to use the term loan repayment programs’ which is increasingly been used when speaking of loan forgiveness. The programs are an excellent option for discharging student debt early.

There are many state loan repayment programs, often matched by federal funding, which only require the qualified student to work in certain underserved fields for two to three years, with the chance to renew contracts until the total debt is discharged. Forgiveness is given to the debts which have accrued in pursing the qualifications which relate to certain professions, generally in the public sector where low wages can be a hindrance to newly qualified professionals working within the public sector. It is far more lucrative for a qualified lawyer to join a private practice than to serve in a public defenders office, so repayment programs are offered to encourage graduates to work in such sectors.

Qualifying professions include teaching, social work, nursing, public and federal defenders, state prosecutors, vets, dentists, nurses, doctors and those in other medical areas. Length of required service and amounts forgiven each year are variable between states and between professions. As an example a qualified New York social worker who works in a critical area can receive up to $6,500 per annum in loan repayments, up to an aggregate of $26,500, whilst the John R. Justice program for attorneys repays up to $10,000 of student loan debt annually up to an aggregate amount of $60,000.

Some loan repayment programs only pay graduate loan debt whilst others cover undergraduate loan debt too.Terms of service vary between programs but tend to have decreased a lot from previous obligations to serve in a required area for ten years. More usually contracts are around three years now, with options to renew until the total debt is discharged.

Programs such as the one developed for vets by the ministry of agriculture encourage vets to work in rural areas which typically pay less than city practices. The program is excellent for those who prefer to work with many kinds of animals. Their role is considered crucial to the safety of food.

Students who are interested in these programs should research well in advance of application to be sure they can meet any qualifying conditions, as placements are very popular so not all applicants will obtain a place. Those interested should check with their state each year to see which programs are available, as well as researching federal programs and other forgiveness programs. To be debt free earlier whilst gaining valuable work experience is a wonderful opportunity for students to consider as an option well before graduating. Those who put the research in will find that student loan forgivess can happen.