Last week, I did an interview with Lynn Berry about how new college graduates should handle student debt. With the average debt approaching $30,000 per college graduate, many students are wondering about the best methodologies to deal with this issue as they begin their careers. Saying “I Forgive You” is never easy and here are my smart money moves on how some of your student loan debt can be forgiven.
- Public Loan Service Forgiveness Program- The PSLF Program is intended to encourage individuals to enter and continue to work full-time in public service jobs. Under this program, borrowers may qualify for forgiveness of the remaining balance of their Direct Loans after they have made 120 qualifying payments on those loans while employed full time by certain public service employers. (source: studentaid.ed.gov) The idea under this program is similar to what some public employer’s do with an MBA program. You work for us for a period of time (generally a minimum of three years) and we will forgive the rest of your student debt.
- Teacher Loan Forgiveness Program- The TLFP was designed to encourage individuals to become teachers serving lower income families in elementary and secondary schools. Under the TLFP, if you borrow a Federal Stafford or Federal Direct loan(s) (and in certain cases, a Federal Consolidation or Direct Consolidation loan), and you teach for five consecutive and complete years at an eligible school, you may qualify to have up to $5,000 ($17,500 for certain highly qualified secondary math and science teachers, and elementary and secondary special education teachers) of your loan balance forgiven. (source tgslc.org)
- Volunteer- Organizations including www.sponsorchange.org and www.zerobound.com are two types of organizations that essentially have a pay it forward mentality. By donating your time to different organizations, you can get some of your student debt relieved while doing good at the same time.
There are other student loan forgiveness programs available and students in the college class of 2014 need to map out a game plan on the best way to handle their debt. With challenging decisions including which debt to pay off first, contributing to retirement plans, and potentially adding more debt with graduate school, you won’t forgive yourself for not putting in the most important lesson plan of your life!