If you just graduated college and are now facing the fact of a huge student loan burden that you need to pay off, you might consider the Public Service Loan Forgiveness program. This program was created by the College Cost Reduction and Access Act and is designed to encourage people to take up a full-time public service job by offering them student loan forgiveness
for those who meet the requirements. If you already have a job in the public service area, you might also apply in return for continuing your work in public service.
To qualify for this program, you need to be a public service employee which means that you are a full-time paid worker in the government or in a 501(c)(3) non profit organization, AmeriCorps or Peace Corps, or any private "public service organization".
Unfortunately the Public Service Loan Forgiveness programs are only eligible for borrowers of the Federal Government backed loans. Only those who borrowed federal student loans are eligible. These include students who borrowed through Federal Direct and those who borrowed federal student loans from private banks and financial lending institutions. In the past, these loans were given by private institutions through the Federal Family Education Loan. However, loans that are eligible to be forgiven are only those that were taken out after 1998.
In the current situation, students can only borrow federal student loans through Federal Direct and no longer from private institution. For borrowers who took out federal student loans through the FFEL program in the past, will have to consolidate, or reconsolidate their loans into Federal Direct first before they can be eligible for a student loan forgiveness
through the Public Service Loan Forgiveness program. If you are not sure what kind of student loans you have, you can find out here http://www.nslds.gov
There are also students who have borrowed private commercial loans from either state or private lenders. Unfortunately commercial loans do not qualify for Public Service Loan Forgiveness.
In order to get a relief from the student loan burden, borrowers of federal student loans may also look into another option which is the Income Based Repayment program (IBR). The IBR program is basically a new way to make your federal student loan payments more manageable according to your current income. For more information about this program click here
However, as with all great programs such as scholarships, grants and student loan forgiveness, the Public Service Loan Forgiveness program is not automatic. It requires borrowers to take specific actions in order to take advantage of it. You can find a lot more online resources to help you figure all out from Equal Justice Works. They provide webinars, podcasts and downloadable files all about information on student loan forgiveness
programs and repayment programs.
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