Prospective undergraduate and graduate students alike have concerns about loan repayment these days. The cost of a college education has tripled in some cases in the past fifteen years, and it doesn't take a college degree to figure out that salaries have not increased at the same pace as tuition rates.

A $50,000 or $100,000 price tag for an education simply isn’t realistic for someone who wants to pursue a career that will pay, say, $40,000 a year. "It's becoming more and more difficult for recent college graduates to afford their loan payments each month," says Howard Freedman, a financial aid consultant based out of Boston, "which is one reason prospective students should consider their options carefully when thinking about how they will finance college."

Public Service Loan Forgiveness

One viable option is loan forgiveness. Did you know that the College Cost Reduction and Access Act of 2007 established a new "public service" loan forgiveness program? After ten years of full-time work in public service, making the required federal loan payment each month, any remaining debt is forgiven.

What constitutes public service? There are many professions that qualify for the Public Service Loan Forgiveness program. Take a look at some of the professions that qualify:

  • emergency management
  • government (excluding time served as a member of Congress)
  • military service
  • public safety and law enforcement (police and fire)
  • public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations)
  • public education
  • early childhood education (including licensed or regulated childcare, Head Start, and state-funded prekindergarten)
  • social work in a public child or family service agency
  • public services for individuals with disabilities or the elderly
  • public interest legal services (including prosecutors, public defenders and legal advocacy on behalf of low-income communities at a nonprofit organization)
  • public librarians
  • school librarians and other school-based services
  • employees of tax exempt 501(c)(3) organizations
  • full-time faculty at tribal colleges and universities
  • faculty teaching in high-need subject areas and shortage areas (including nurse faculty, foreign language faculty, and part-time faculty at community colleges)

What's the catch? There are several requirements of the borrower. Here are two of the biggies (for a full list and explanation, visit the Department of Education's Loan Forgiveness page):

  • The program covers federal Stafford, Grad PLUS, or consolidation loans as long as they are in the Direct Loan program. Guaranteed (or FFEL) or private loans must be consolidated into Direct Lending.
  • The borrower must work full-time in a qualifying profession for ten years and make all 120 monthly payments.

Edie Irons, Communications Director for the Project on Student Debt, says the Public Service Loan Forgiveness program is specifically designed for people with heavy debt burdens. “I’ve talked to people who have said this will change their life,” Irons says. “This amounts to enormous help for students entering school and for college graduates. Not many people are aware of it, but the word is starting to get out.”

Another bit of good news for both inbound students and graduates is the Income Based Repayment (IBR) program, which will allow students to repay their loans based on income. IBR, which officially became available July 1, 2009, will make repaying student debt more practical for professionals who make little money but carry hefty student loans. For most people, loan payments will be less than 10 percent of their income. And those who qualify for Public Service Loan Forgiveness can keep their payments to a minimum with IBR during the 10-year repayment period of the loan forgiveness program. Find out more about IBR at

And there’s another reason to give serious consideration to the Public Service Loan Forgiveness program. As David Hawkins, Director of Public Policy and Research for the National Association for College Admission Counseling, says, “Obviously there is a need for people in these (qualifying) professions, which translates as more job opportunity.”

Other Loan Forgiveness Programs

Looking for other options for loan forgiveness?, an excellent resource for students seeking financial aid, provides both a brief and detailed explanation of federal and other loan forgiveness programs. Performing volunteer work (through AmeriCorps, Peace Corps, or VISTA), serving in the Army National Guard, teaching in schools that serve low-income families, and working in certain legal and medical capacities qualify a person for loan forgiveness. 

>See also Student Aid on the Web, the Department of Education’s federal student aid information site.