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Wouldn’t it be nice to graduate from college, go to work in a career field
you love, and have some assistance in repaying your loans? Well, a such programs
do exist, and their purpose is to encourage students in specific career fields,
volunteer and service programs, and geographic locations to contribute their time
and expertise in exchange for loan repayment or cancellation.
Such programs offer what is called “loan forgiveness.” It’s
a benefit most commonly offered to those that perform volunteer work or military
service, who serve as teachers in certain geographic regions, or practice law,
medicine, or nursing in certain geographic locations, or other professions in
fields that benefit society in general. If you happen to remember the offbeat
television show Northern Exposure—in which a New York doctor practiced medicine
in rural Alaska—you get a basic idea (albeit a Hollywood one) of what loan
forgiveness programs are all about.
Understanding Program Benefits
Let’s take a look at some specific examples. Individuals who volunteer for
organizations such as the Peace Corps, AmeriCorps, or the Volunteers in Service
to America (VISTA) can apply for deferment of their Stafford, Perkins, or Consolidation
loans, and can additionally request partial cancellation of their Perkins Loan
(this reduces their balance owed by 15 percent for each year of service).
Likewise, students who are in the military or are military veterans may be eligible
for special loan repayment programs through their military branch. Students who
are in the Army National Guard, for example, can qualify for up to $10,000 through
the Student Loan Repayment Program.
Legal and medical students also have many opportunities to participate in loan
forgiveness through their potential employers. Many borrowers who serve in public
interest or non-profit legal positions are eligible for loan forgiveness, as are
physicians who agree to practice for a specific number of years in low-income
communities that lack adequate medical service (through the National Health Service
Corps). In addition borrowers who specialize in the growing field of occupational
or physical therapy can often negotiate loan forgiveness as part of their compensation
package, as many hospitals and health care facilities now offer the program as
a hiring incentive.
While the programs described above are some of the more common avenues of loan
forgiveness, they are certainly not the only ones. There may also be loan forgiveness
opportunities for borrowers that live in certain geographic regions or attended
specific universities. Graduates of Harvard University’s Kennedy School
of Government, for example, may be eligible for loan forgiveness if they are employed
in the public sector and making less than specific salary level. Similar programs
exist in states like Maryland, where state and government employees whose gross
income is less than $40,000 annually may qualify for loan repayment or tuition
assistance to study law, social work, education, or healthcare-related fields.
Even if none of these areas or fields apply to you, you may still be eligible
for loan forgiveness through loan repayment programs included as part of employee
benefits packages. Medium to large employers (especially large national or multi-national
companies) are often the best bet for such programs.
As the saying goes a little “forgiveness” goes a long way.
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