Have you heard of student loan forgiveness? If you work within one of several specific sectors you may qualify to have some or even all of your student debt ‘forgiven’ and completely written off. It goes without saying that this could save you hundreds of thousands and make your monthly paycheck go even further than ever before.
How does it work?
Loan forgiveness only works on federal loans, so unfortunately if you have taken out a loan with a private company you will not be eligible to apply. It is also only available for careers in specific sectors such as teachers and nurses.
Applicants need to meet the requirements set out by the relevant scheme and apply within the given time frame. Since the conditions of each forgiveness program vary widely and can be extremely confusing, companies such as Loanforgiveness.org offer to help graduates to apply to their specific scheme whilst charging a nominal fee if the application is successful.
Who can apply?
There are many types of career that are eligible for loan forgiveness. Since the nursing profession is so highly esteemed there is an extremely beneficial program available to nurses. However, it is extremely competitive and only accepts applications once a year. Both Police and Firefighters also have specific schemes that they can apply to and have the opportunity to have the debt completely written off.
Pros of loan forgiveness
The benefits of loan forgiveness is obvious. Eligible employees have the potential to have some or all of their outstanding loan completely, or partially wiped out and cleared against their name.
Cons of loan forgiveness
Unfortunately, there are a few drawbacks to the different programs. Firstly, there are many specific requirements of each scheme which drastically reduces the amount of people that are able to apply. In some loan forgiveness programs you are required to have worked in the role for a certain amount of time, such as the teaching schemes which requires a minimum of 5 years at a low income school. Other programs require the employee to have already been repaying the loan for a while, such as the public service scheme which states that 120 qualifying payments must have been made over a period of ten years.
Other drawbacks of loan forgiveness are the facts that they are extremely competitive and often difficult to apply for in the first place. This is why many people opt to apply via an external company, but even these have a step fee in many cases.
Worth a try?
Despite the many potential drawbacks of the forgiveness programs it is well worth looking into the different schemes and seeing if there is any way in which you could benefit. For the lucky few that meet all of the requirements, the potential of having your debt completely wiped is extremely exciting and could open a whole world of opportunities due to an improved financial situation.
If you need any help or have any questions regarding loan forgiveness, we would love to hear from you! Do get in touch with us via the contact page and we will be in contact shortly.