Federal Student Loan – Forgiveness Programs

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by admin on January 27, 2013

Long gone are the days of cheap public school tuition and easily accessible scholarships. In a time
when college educations are not only endorsed by secondary schools but required for most entry level
positions, one has to wonder why it’s become increasingly more difficult to afford. We’ve all seen the
movie, the young woman of ethnic background who is the first in her family to attend college and winds
up studying at Yale, Harvard or Columbia. I recall growing up and having similar dreams, except my
parents did go to college and although somewhat of a mutt, I can’t really play the ethnic card.
Furthermore, in real life, I’ve known many people from financially challenged backgrounds with big
dreams but little opportunity due to the increasingly high tuition fees.

In 2007, Congress finally felt it was time to try and help the situation by creating The Public Service
Loan Forgiveness Program (PSLF). Here, one has the option of eliminating their student loans while
working full time in a public service job. However, as with all helping hands, even government ones,
there’s a catch. In order to relieve oneself of these financial burdens, one must first make at least 120
monthly payments towards their student loans. Therefore, if you do the math, you’re left making payments
for a whole ten years before you experience any financial freedom. This forgiveness is only granted on
loans made under The William D. Ford Federal Direct Loan Program. The following loans are eligible for
this program; Stafford/Ford, Unsubsidized Stafford/Ford, PLUS, and Consolidation Loans. Unfortunately,
because congress created this mediocre beacon of hope in October of 2007, any payments made before
then do not count towards the 120 needed to qualify for the program. Sadly, any and all who went down
the route of private loans, like those from large banks, do not qualify for any such forgiveness and will
most likely have to endure a painful life of endless payments and/or sugar daddies.

When I think of public service, my mind immediately jumps to that unhappy day when the DMV lady
yelled at me for simply being within her vision and told me to go wait in the longest line known to man.
Now, there is no shame in working for the Department of Motor Vehicles, however, one can’t help but feel
like DMV employees tend to seem miserable and under appreciated. Lucky for us, there are many
government jobs out there. In fact, even employees for private non-profits that have been designated as
tax-exempt by the IRS are eligible for student loan forgiveness. Other positions that qualify are as follows;
emergency management, military service, public safety, public education, public health services, public
law enforcement, public library services, public services for the disabled or elderly and public early
childhood education.

There are few public service jobs as noble as that of the teacher, especially a teacher in “the hood.”
With the Sandy Hook Elementary School shooting not far behind us and a legitimate fear of violence in
the classroom, one has to commend any teacher working anywhere. Throughout time, there has
continually been an overwhelming neglect on lower income areas and education. Rarely does one meet a
teacher or social worker who is enthusiastic about being placed for a position in Compton, Inglewood,
The Bronx and all sorts of parts of Brooklyn. Therefore, in 1998 the government decided to commend
these individuals for their contribution to society and for changing young lives and providing them with
endless possibilities. This appreciation was expressed by the creation of The Teacher Loan Forgiveness
Program. Only teachers that have worked full time for 5 consecutive years for qualifying institutions are
eligible. However, under this program, teachers are only granted up to $17,500 worth of student loans.
Although this may provide some incentive to pursue a career in teaching, one can’t help but notice that
the guide lines for this specific forgiveness program are complicated and do not grant the
qualifying teacher that much money.

Whether you’re a believer in these new Federal Loan Forgiveness Programs or not, it is definitely a
step in a helpful direction for anyone who has pursued an education. Barack Obama has mentioned the
rise in tuition and the inability to afford student loans since his first speech as a presidential nominee. In
2012, Obama passed a new Federal Student Loan Repayment Plan, and although it’s no cure to the
illness of student debt, it has provided new possibilities in ones ability to survive whilst having heavy
educational loans. This pay-as-you-earn system is designed to adjust the repayments from 15% to
10% of ones income. Furthermore, under Obama’s plan, after 20 years of payments, you’re set free of all
student loan burdens. Still, 20 years is a long time, but it could be much worse.

In essence, if you’re unwilling to be Uncle Sam’s helping hand, you won’t be seeing much assistance
on affording or extinguishing your student loans. Having said that, The Federal Student Loan Forgiveness
Programs are a step in a great direction for Americans. That is to say, that with this new found somewhat
specific support from the government, pursuing a higher education is becoming a bit more possible.

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