Student loans suck. Period. They are the worst kind of debt one could have next to owing the local mobsters. Like condoms, student loans serve their purpose when you’re young but eventually you want to settle into a life without them. Probably could have thought of a better analogy there. Anyway, student loans are not dischargeable in bankruptcy and will follow you around like a cold sore for the rest of your life unless you pay them off or, if you meet a urethra-wide set of qualifications, you can have them forgiven in full (tax free!). Below are ways to qualify for student loan forgiveness without resorting to paying off your student loans with credit cards.
Many people are aware of the student loan benefits of serving in the armed forces. The question is whether this is something you wish to do, as it is a commitment not to be taken likely. For each year of service, the military will pay out 15% of the student loan balance up to the maximum, pending the branch. This applies, obviously, to those who have already graduated from college. The breakdowns by branch are available here.
By signing up to motivate minorities and teach them the merits of learning through unconventional means, the government will forgive a portion of any Perkins Loans. So for the first two years you work to “reach these kids” you will see 15% of your Perkins Loan balance be forgiven, and 20% for the third and fourth years, and the remaining 30% in your fifth year. You will also have the satisfaction of changing lives and winning singing/math competitions.
There are several programs available via The American Bar Associations Loan Repayment Assistance Programs which offers loan assistance or forgiveness. Strictly for those serving in the public interest or for non-profits, so those fighting to remove rain forest for a paper company do not qualify.
No, you do not have to subject yourself to Dr. Moreau in order to rid yourself of student loans, although many young forks do. There are two programs available via the U.S Department of Health and Human Services:
- Nursing Education Loan Repayment Program: In exchange for two years of nursing services (non-sexy kind) at a qualified non-profit, 60% of your loans forgiven. Work a third year and receive an additional 25%. No bonus for old-man sponge baths.
- National Health Service Corps: receive up to a whopping $170,000 in student loan forgiveness in exchange for five years of service in an area that is “in need”.
Other options include National Institute of Health which will provide up to $35,000 a year for qualified research at non-profits of universities. Good luck finding a spot, though.
If you are found way too much enjoyment dissecting frogs in middle school there is a student loan forgiveness programs available through the U.S Department of Agriculture, which offers a Veterinary Medicine Loan Repayment Program which will pay up to $25,000 per year for three years. The catch: you need to work in a “designated area”. Unfortunately, no Kevlar vest is provided.
For those who enjoy not being paid and worked to the bone but are wary of signing up for a Eastern-European sex trafficking organization, there are several options available which offer partial student loan forgiveness:
- Americorps: in exchange for 12-months of service, you can receive $4,725 towards your student loans. In terms of hours volunteered -to- loan forgiveness, you would be better of getting a second job and putting those earnings towards your loans.
- Peace Corps: Join the hippie masses at the Peace Corps and receive automatic deferment of your Stafford, Perkins of Consolidated Loans. Student loan forgiveness is also available at a 15% per year rate, up to a maximum of 70%.
- Volunteers in Service to America (VISTA): in exchange for 1,700 hours of service, you will receive $4,725 towards your student loans. This is a whopping $2.78/hour. Get a second job instead.
Total and Permanent Disability Discharge
Wouldn’t recommend it, but if you are interested I suggest you follow the guidelines set by Lee Evans in There’s Something About Mary.
Death Discharge: the “Best” Student Loan Forgiveness Option
Also not recommended.
A Word of Caution
Student loan forgiveness can be a great thing for many newly graduated smart-people; however it is important to run the numbers. As I pointed out, a VISTA volunteer is essentially being compensated at less than one-third the minimum wage (pending the state). Of course, there is the feel-good argument for volunteering which is valid to a certain degree, but it is this author’s personal opinion that student loans are cancerous to one’s financial future and therefore should be eliminated swiftly prior to focusing on basically-free forms of service. Run the numbers: will participating in these programs help you career? Will they aid you in paying off your loans faster, or are there other options (like a second job) that will facilitate their elimination faster? Remember the Purpose of College.
You’re a college graduate now, so do the research.
Of course, if you don’t qualify for anything and hate working hard, you have multiple student loan payment plans to consider.