Loan Forgiveness Info

1. Federal Public Service Loan Forgiveness (PSLF)

PSLF came online in 2007 as a way to encourage people to work in full-time public service jobs. This program forgives eligible federal student loans – by eligible they mean William D. Ford Direct Loans (including direct subsidized loans, direct unsubsidized loans, direct PLUS loans and direct consolidation loans). Though the program was implemented eight years ago, not a single penny of student loan balances has been forgiven. Check out these PSLF eligibility requirements and you’ll quickly see why:

• • Before any of your loans will be forgiven, you must make 120 on-time, full amount, monthly payments on your direct loans.
  • Only payments made after 10/1/2007 qualify.
  • You must have been working full-time at a qualifying public service organization (schools count) when the payments were made.

That means you must have made 10 years worth of student loan payment while working in public service. And with a start date of October 2007, no forgiveness will start until October 2017. If you are a public service employee and still owe money come 2017, this could be a good program for you! You can access the PSLF certification form here.

2. Federal Teacher Loan Forgiveness

This program is aimed at encouraging people to become and remain teachers. If you work for five consecutive full years in a qualifying school, you could have up to $17,500 of student loans forgiven. This program is good for loans established after 10/1/1998 but you can’t be in default. At least one of your five years of teaching must have been after the 1997-1998 academic year. Eligible loans include direct subsidized and unsubsidized student loans, Stafford subsidized, and Stafford unsubsidized student loans. Here are the eligibility requirements for the teacher loan forgiveness program:

• • The school you teach at must be in a district that qualifies for Title I funding.
  • The school must have more than 30% of enrollment qualified for Title I services.
  • The school must be listed in a list of qualifying schools published by the government.
  • If your school qualifies in one of the five years, but not the others, you are likely still eligible.
  • As an alternative, you can work at a qualifying educational service agency.

The amount of forgiveness varies. Most teachers can have $5,000 of loans forgiven. But you can have up to $17,500 of your student loans forgiven if you are a “highly qualified” math or science teacher at a secondary school or a “highly qualified” special education teacher working with disabled children in your area of specific training, as long as the eligibility requirement state above are met. You can get an application for the Teacher Loan Forgiveness program here.

3. Federal Perkins Loan Cancellation Program

The Federal Perkins loan cancellation program is much more lenient in how much of your student loans it will cancel out. You can have up to 100% of your Federal Perkins loan forgiven. Better yet, you only have to teach full time for one full academic year (or two consecutive half years within a 12 month period) to see some benefit. For the first two years, you can have 15% cancelled each year. For years three and four, you can have 20% cancelled each year. For year five, you can have the final 30% of your loans cancelled. Here are the eligibility requirements for the Perkins loan cancellation program:

• • You can teach in a school that serves low-income families; or
  • You can be a special education teacher (including infants and toddlers); or
  • You can teach in math, science, foreign language, bilingual education or any other field your state has determined is in shortage.

You can also qualify for teaching at a private school if it’s a nonprofit. You can qualify if you teach part-time at multiple schools so long as you meet the other requirements. Preschool and PreK teachers can qualify if the state you teach in considers these part of their elementary education program. To find out if your school qualifies as low-income, check this database. The amount cancelled each year also includes all interest that accrued that year. To get the application form for this program, contact the office at your alumni institute that administers the Federal Perkins Loan program.