Taking a student loan is often necessary if you wish to start and/or finish school.
Unfortunately, student loan debts can become a burden if there is no way in which you can pay them off.
Many students accumulate extensive student loan debt, making it impossible for them to retain any of their earnings once they become employed in their respective fields.
The situation is even worse if the former student cannot find solid employment for months or even years after graduation.
Even in bankruptcy, a student loan debt cannot be discharged, and therefore must be paid off.
However, there are programs that allow current or former students to obtain student loan forgiveness.
Most of these programs involve performing volunteer work or military service, practicing medicine in certain impoverished or remote areas of the world, doing social work, or meeting other requirements.
Fortunately, the loan amount that is dispensed under student loan forgiveness is not assessed as taxable income.
Volunteering is not only a great way to give back to your local and/or global community, but it can also qualify you for student loan forgiveness.
If you volunteer for organizations such as the Peace Corps, AmeriCorps, or VISTA (Volunteers in Service to America), up to 70% of your student loan debt can be forgiven (usually at a rate of 15% per year of service).
Breaking down the numbers, volunteers in AmeriCorps who serve 12 months can receive loan forgiveness of $4,725 towards their student loans.
VISTA pays the same amount for 1,700 hours of service.
The Peace Corps will cancel 15% of Perkins loans for the first two years of service, then 20% for the third and fourth years of service, for a total cancellation of 70% after 4 full years of service.
Additionally, most volunteer organizations will automatically defer your Stafford, Perkins, or Consolidation loans while you are serving, thus freeing you from interest accumulation on your loan.
For each year that you serve in the military, 15% of your student loan debt is repaid by the respective program (up to a branch maximum).
Those maximums are $65,000 for the Army and Navy, $20,000 for the Army Reserve, and $10,000 for the Air Force.
You must request student loan forgiveness at the time of enlistment or reenlistment.
You will also need to score 50 or higher on the Armed Forces Qualifications Test.
If you choose to teach in an elementary or secondary school that serves low-income families, all of your Perkins loan debt can be forgiven.
This program forgives 15% of your Perkins loan in the first and second years, 20% in your third and fourth years, and the remaining 30% is forgiven in your fifth year of teaching.
More information about loan forgiveness may be obtained at Loan Forgiveness for Teachers.
Many law schools provide loan repayment assistance, loan forgiveness, lower interest student loans, or deferred loan repayment if you choose to work as a public defender for non-profit organizations.
Many US states, Oregon included, offer loan repayment assistance programs.
For more information, go to the American Bar Association’s Loan Repayment Assistance Programs web site.
Medical students have several loan repayment options available to them.
The U.S. Department of Health and Human Services offers loan forgiveness through two programs: the National Health Service Corps, and the Nursing Education Loan Repayment Program.
The first program requires that you devote 5 years to providing medical care in areas of need; for this service, up to $170,000 of your student loan is forgiven.
The second program requires that you devote 2 years to a qualifying non-profit organization; for this service, up to 60% of your student loan is forgiven.
If you so choose, you can devote the third year of service and have an additional 25% of your loan forgiven.
For medical students who are interested in scientific research, the National Institutes of Health offers up to $35,000 per year in loan forgiveness for conducting research at either a non-profit agency, a university, or at the NIH itself.
Medical students interested in veterinary work can apply under the U.S. Department of Agriculture’s Veterinary Medicine Loan Repayment Program.
This program allots $25,000 per year in loan forgiveness for up to 3 years for working in a designated arena.
If you become full-time law enforcement or corrections officer, the government will repay your student loan debt at a rate of 15% per year for the first and second years of service.
In the third and fourth years of service, the repayment rate jumps to 20%, and then to 30% for the fifth year.
The loan forgiveness program applies primarily to students who take out federal Perkins loans.
More information may be obtained by clicking on the following Congressional report.
The Loan Forgiveness Demonstration Program for Child Care Providers provides up to 100% student loan forgiveness for childcare providers working in low-income areas.
Only applicants who have received a federal loan under the Federal Family Education Loan Program (FFELP) and the Federal Direct Loan Program (FDLP) can receive this particular loan forgiveness.
Child care providers receive 20% student loan forgiveness each year after completing their second and third years of service (40% total), then 30% each year after completing their fourth and fifth years of service (60% total), totaling up to 100% of their initial student loan.