Loan Forgiveness – Overview
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Do you need to apply for a student loan to pursue your college degree?
This is the first in a series of six short articles to help you gain a full knowledge of “Loan Forgiveness.” Reading up on this subject can help you determine if that loan you sign for today may one day be for forgiven should you plan carefully and meet the criteria post graduation!
Under certain circumstances, the federal government will cancel all or part of an educational loan. This practice is called Loan Forgiveness. To qualify, you must:
- Perform volunteer work;
- Perform military service;
- Teach or practice medicine in certain types of communities; or,
- Meet other criteria specified by the forgiveness program.
To find out whether you qualify for loan forgiveness, talk to the human resources staff at your employer.
The Federal Student Loan Repayment Program allows federal agencies to establish loan forgiveness programs to help recruit and retain employees. This is technically a loan repayment program and not a loan forgiveness program, as the agencies make payments directly to the loan holder and the payments represent taxable income to the employee. The agencies can repay up to $10,000 in Federal student loans per employee per calendar year, with a cumulative maximum of $60,000 per employee. Employees must agree to work for the agency for at least 3 years.
Next up: Let’s Look at Loan Forgiveness - Volunteer Work