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Student Loan Forgiveness Programs to Clear College Debt

Student loan forgiveness programs are a way of eliminating some or all of the cost of a college education. Although attending university can help to provide for a better future, this isn't the case for everyone. Problems can occur as a result of poor health, low income or difficulty finding suitable employment. While some problems are only temporary, others can last indefinitely.

Filing for Bankruptcy Under Chapter 7

The majority of debt relief programs do not legally help to write-off debt. While filing for chapter 7 bankruptcy can help to clear credit card debt and unsecured loans, it's rarely possible to eliminate the cost of a college education. You'd need to prove that a low income was virtually certain to continue due to a long-term medical condition.

Student Loan Forgiveness Programs

  • Disabled people who have little chance of fulfilling their income potential.
  • Individuals who are likely to be on a low income for the remainder of their lives.
  • Ethnic minorities.
  • Critical public sector occupations, such as teaching, the armed forces and nursing.
  • Medical research for the benefit of the public.
Student Loan Forgiveness Programs College Cost Reduction and Access Act

This recent legislation allows individuals in public sector employment to pay off student loans in a shorter space of time. Although income-contingent and Income-Based Repayment (IBR) plans can mean that the debt lasts for 25 years, the above legislation allows teachers and nurses to become free from college tuition debt in a maximum of 10 years. A minimum of 120 monthly payments will need to be made in order to benefit. The intention is to encourage more college graduates to enter less lucrative careers that are absolutely essential to the U.S. economy. Student loan forgiveness programs are a clever way of achieving this objective.

Sources of Debt Relief

  • Department of Health and Human Services. The National Institute of Health's NIH Loan Repayment Program offers to clear up to $35,000 for each year of service. Only available to those with a suitable medical background.
  • Law School Loan Repayment Assistance Programs (LRAP). A survey by Equal Justice revealed that 89 out of 133 Law Schools offered debt forgiveness for students.
  • American Federation of Teachers. AFT.org has a full and comprehensive breakdown of all the different sources of relief from student debt. This can be broken down by state.
  • Americorps. There are about 75,000 volunteer positions offering young people the chance to earn $7,400 and a further payment of $4725 upon completion. The aim of this program is to help the less fortunate so it represents a win-win situation for both parties, especially with so few graduate jobs currently available.

Student loan forgiveness programs can help to clear or pay off student debt. Whilst not everyone can or will qualify, it is well worth checking to see if you are eligible for assistance.

Disclaimer: This article in no way attempts to provide legal, financial or tax advice. One should consult a licensed attorney, tax advisor, or other qualified financial professional before proceeding.

Updated: 30 April 2011

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