Careers that Offer Student Loan Forgiveness

Student loan debt in the United States exceeds $1,345,325,000,000 and it is growing by the minute. The current student debt amount is rising at a rate of $2,726.03 per second, according to the Federal Reserve.  However, new college graduates can choose to go into certain occupations or programs that will lead to eventual student loan forgiveness … although in most cases the graduates will still need to make payments for at least 10 years before their remaining student loans are forgiven.

Obama-signing-legislation - student loan forgiveness

Student loan forgiveness is possible at both the state and local level, but it is important to investigate the programs that are available. (https://twitter.com/inhabitat/status/720985009637695490)

What Can You Do to Get Your Student Loans Forgiven?

First, it is important to understand that the rules surrounding student loan forgiveness can be complicated.  In addition, there are no guarantees that the rules won’t change.  The programs are subject to special state and federal financing and are subject to available funding. As a result, they can be cancelled or modified at any time.

However, since it is possible to have thousands of dollars in student loans forgiven, it is worth the effort to check out the various programs and see if you are eligible for any of them.

Federal Public Service Loan Forgiveness

If you are willing to work for ten years in certain public service jobs at the local, state or federal level, you may be eligible for the Federal Public Service Loan Forgiveness Program.  If you work full-time for a qualifying government or not-for-profit employer and you make 120 qualifying student loan payments, you may be eligible to get your remaining loan balance forgiven.

The job you have is not what matters.  What qualifies you for loan forgiveness is your employer.  They must fit into one of the following categories:

  • Government organizations at any level (federal, state, local, or tribal)
  • Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
  • Other types of not-for-profit organizations that provide certain types of qualifying public services
  • Full-time work in the AmeriCorps or Peace Corps

In addition, the majority of the loan payments you make during that ten year period should be as part of an income-driven repayment plan, not a standard repayment plan.  That is because your loans will be fully paid off in ten years under the standard repayment plan and there will be nothing left to forgive.

If you want to be sure that you are on-track to get your loans forgiven, you can periodically submit a Public Service Loan Forgiveness Employment Certification Form.

Examples of jobs that would be covered by this loan forgiveness programs are public school teachers, professors at public universities, firefighters, and state police officers.

Federal Teacher Loan Forgiveness

In addition to the program above, there is also a special Federal Teacher Loan Forgiveness program that forgives a portion of the loans of a highly qualified teacher after five years of teaching at a qualifying school.  This program is for teachers who work in schools that have a student body which consists of at at least 30 percent low-income students.  Teachers qualify under this program can have up to $17,500 of their student loans forgiven.  Qualifying student loans are Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, and Unsubsidized Federal Stafford Loans.

State Student Loan Forgiveness Programs

There are also programs offered at the state level that are designed to forgive the student loans of people in jobs that are hard to fill.  Examples of the types of jobs that may qualify for student loan forgiveness at the state level are doctors, nurses, veterinarians and attorneys.

For example, North Dakota has a program that will forgive up to $80,000 in student loan repayments in exchange for veterinarians who set up commercial practices in their state.  If you work in one of these types of occupations, you should check with your state to see if they sponsor a student loan assistance program.

Student Loan Forgiveness for Disabled People

In April, 2016, President Obama announced a program that will forgive the student loans of nearly 400,000 disabled people.  The Department of Education will send letters to those individuals who are deemed eligible for “total and permanent” discharge from their student loans.  If you believe you or a disabled family member may be eligible and you do not receive a letter, contact the Department of Education.

Surprise Tax Bill After Student Loan Forgiveness?

Currently, students may owe income tax on the amount of their student loan that is forgiven.  While some Senators are introducing legislation to protect students from a surprise tax bill, anyone who has their student loans forgiven should be prepared for this possibility until this legislation is enacted.


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2 Comments

  1. Deb Jones

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