- Created on 27 September 2013
NEW YORK -- Wish you could make your student loans disappear?
Student loan forgiveness programs can make it happen, but there's a problem.
"There needs to be more awareness about these programs," says Betsy Mayotte, director of regulatory compliance at American Student Assistance, a nonprofit that helps borrowers manage their student debt.
So the organization released a student loan forgiveness guide earlier this year on its website. The Consumer Financial Protection Bureau, a government watchdog, released its own guide last month to bring attention to the programs.
The programs are not a quick fix. Instead, they enable borrowers to erase their remaining student debt after several years of payments. Most of the programs are tied to certain low-paid professions, such as teachers or public defenders, and have other restrictions. Here's a snapshot of several options.
PUBLIC SERVICE PROGRAM
This program is for those who work in federal, state or local government jobs, or at a nonprofit that's been designated as a 501(c)(3) tax-exempt organization. The CFPB estimates that a quarter of the country's workforce falls into those categories. Individuals must also have high student loan balances relative to their income.
The program works like this: anyone who makes 120 on-time monthly payments toward their student loans and works in a qualifying job for 10 years (they don't have to be consecutive), can apply to have their remaining balance forgiven. The amount of the loans forgiven is not taxed, under current tax law.
Only those with federal Direct Loans will qualify for this program, but some loans, such as the Federal Family Education Loan (also known as FFEL) and the Perkins Loan can be consolidated into a Direct Loan. If you don't know what type of federal loan you have, you can find out at nslds.ed.gov.
The program was established in 2007, so no one has received loan forgiveness yet. Those hoping to take advantage need to make sure their job qualifies with the Department of Education every year, says Mark Kantrowitz, publisher of Edvisors.com. Save the paperwork and annual income forms, in case you need to later prove your eligibility.
The Department of Education offers more guidelines: . http://1.usa.gov/18sELJS
Under this program borrowers can qualify for reduced monthly payments, and after 25 years the remaining balance is forgiven. It is important to note that the forgiven amount is taxed as income, which means you will likely have to pay a sum to the IRS that's lower than the amount forgiven.
The program is for those whose federal student loan debt is high relative their income and family size. Your lender will ultimately decide if you are qualified, but you can see if you would benefit from this program by using this online calculator: . http://1.usa.gov/1bIO1yw
There are other rules, such as which types of federal loans qualify. The Department of Education has a helpful tip sheet: . http://1.usa.gov/19JJVQA
PAY AS YOU EARN PLAN
Borrowers can apply to have their monthly payments reduced, and after 20 years of payments, the balance is forgiven. Any forgiven amounts are taxed as income. This program is for those with a high level of federal student loans compared to their income, and who took out their first federal student loan after Oct. 1, 2007.
Use the Department of Education's online calculator to see if you qualify: . http://1.usa.gov/194F7V0
Depending on your job, you may be able to get help with your loans.
Teachers, for example, should see if they're eligible for the teacher loan forgiveness program. They must work at a qualifying school for five consecutive years to receive up to $17,500 in forgiveness on certain federal loans. For more details see: . http://1.usa.gov/1bITqWq
American Student Assistance put a list together of over 60 programs. Some are based on type of job, others are state programs. You can see them here: . Some state programs even help with private loans. Mayotte of ASA recommends an Internet search to see if your state or job qualifies for some sort of student loan help. She says it's important to ask your employers or human resources department if student loan help is available. She says more employers are refunding a part their employee's student loan payments. http://bit.ly/15xGpNs
Mayotte also warns that borrowers shouldn't take jobs just to have their student loans forgiven, or take out too much debt because they assume their debt will be forgiven. Many of the programs are budget based, there's a possibility that some could disappear or not be around by the time you graduate, Mayotte says.
Public service loan forgiveness: http://1.usa.gov/18sELJS
Income-based repayment: http://1.usa.gov/19JJVQA
Pay as you earn plan: http://1.usa.gov/1h5MGzQ
Teacher loan forgiveness program: http://1.usa.gov/1bITqWq
Consumer Financial Protection Bureau's guide: http://1.usa.gov/1as4UK8
American Student Assistance's guide: http://bit.ly/15xGpNs
- Created on 21 August 2012
The 3rd Ward's 6th Annual Back-to-School Extravaganza, co-hosted by Ald. Pat Dowell and the Wentworth and Deering Chicago police districts, provided over 1,500 backpacks Aug. 18 at Fuller Park.
Students received the school supplies-filled backpacks, along with other resources to help them start the school year off fully prepared.
Lunch, face painting, jumping jack, clowns and music were available to area parents and their children. The University of Illinois-Chicago, Ounce of Prevention and Bernie's Book Bank distributed educational material and books to students, and Provident Hospital and the Illinois College of Optometry provided health and wellness resources.
School supplies donated by Dowell to the Oakwood Boulevard Block Party Group will be distributed to area students in need.
"Nothing is more important than a child's education and making sure they have the resources to succeed. The Back-to-School Extravaganza is one of my major initiatives and gets bigger and is more fun every year," said the alderman.
- Created on 18 July 2012
King: Dakota James 91,000 Queen: Autumn Caldwell 362,000
Prince: Isaiah Day 83,000 Princess: Zaria Irving 248,000
Lord: Thomas Jackson 23,000 Lady: Erin Chapman 240,000
Kayla Pettis 144,000
Briyanna Jones 58,000
Noadiyah Jones 40,000
Quimaya Sewell 26,000
Ciara Evans 23,000
Thank you for supporting the 2012 Bud Billiken King and Queen Contest