Federal Student Loan Forgiveness: How it Works (page 2)

The federal government has many programs available to help citizens achieve a college education. One little known program is loan forgiveness, where the government cancels part or all of an educational loan. To receive this benefit, you have to either work for one of a number of government-service programs or work in a low-paying, but important, area subsidized by the government.

Service areas with loan forgiveness options include:

• AmeriCorps. Up to $4725 off your loan, for 12 months of work.
• Peace Corps. Up to 70% off your loans
• VISTA (or Volunteers in Service to America). Up to $4725 off your loans.

Other Loan Forgiveness Options

Military service

If you are in the Army National Guard, you may qualify for the Student Loan Repayment Program, which could pay up to $10,000 of your student loans. Repayment, forgiveness … the outcome is the same.

Teaching

If after graduation, you would consider becoming a teacher in a school serving low-income families, you may have a portion of your Perkins Loans forgiven. The National Defense Education Act calls for forgiving 15% of loans for the first and second years of teaching service, 20% for the third and fourth years, and finally, 30% for the fifth year.

For more information and a list of other loan forgiveness programs for teachers, check with the American Federation of Teachers.

The U.S. Department of Education also has information about programs on its Web site, as well as a database of low-income schools eligible for teacher’s student loan cancellation.

Law schools

Law students should be sure to check with their school about whether they forgive student loans for those who serve in public interest or non-profit jobs after graduation.

Medicine and Health

Loan forgiveness programs are offered by the National Health Service Corps and the Nursing Education Loan Repayment Program. Physicians and nurses may get their loans forgiven through these programs if they agree to practice for a certain amount of time in areas that have shortages of adequate medical providers, usually due to remoteness or poverty.

The National Institutes of Health also have programs that will repay up to $35,000 per year of student loan debt for graduates who conduct medical research.

Loan repayment programs are many and diverse. For example, hospitals and healthcare facilities use loan forgiveness programs to help them recruit occupational and physical therapists. The American Association of Medical Colleges (AAMC) maintains a database of loan repayment programs for med students.