MONEY MANAGEMENT PRO TIP: Student Loan Forgiveness
Updated: May 26, 2022
Congratulations to all the 2022 graduates!
Student loan debt is all too common. In fact, student loan debt in America has increased by $165.9 billion since last year, compared to credit card debt which has fallen by $73 billion since last year. President Biden recently stated he’d make an announcement on possibly relieving some of the debt within weeks.
Consider these facts:
With the rising cost of higher education, many students are spending in upwards of $100,000 or more on the cost of their education, only to be employed in a field that doesn't pay very well.
Student loan debt is one of the only debts that can't be wiped out by bankruptcy.
If you default on your student loan, it really hurts your credit scores, which in turn makes it harder to get other loans, such as for a car or home. It impacts the economy when lots of people default on their loans.
So, what can you do? Avoid higher education? Either option will potentially affect your accounts negatively. Luckily, there are a few other things you can do to erase at least part of the amount you owe:
There are several organizations that will help you with your student loan debt in exchange for your time. If you like to give back, this could be an amazing option!
Join the Peace Corp. You can get partial cancellation of your Perkins Loans. You can knock off 15% for each year of volunteering, up to 70% total. You can see the world and do something worthwhile while paying down your loans. Employers love Peace Corp volunteers: you're likely to get a much better job when you get finished.
Get involved with Volunteers in Service to America. This is something you can do locally and earn some student loan forgiveness. After giving 1,700 hours of your time, your loans will be forgiven to the tune of $4,725. Not a great per/hour rate, but it's something worthwhile you can do in your spare time to pay down your loans.
AmeriCorps also has a program. 12 months of service gets you $7,400 of pay and $4,725 of loan forgiveness. Student loan forgiveness plus pay; now that sounds nice!
The military offers a variety of loan forgiveness programs. The numbers change frequently. Here's one example: The National Guard offers up to $10,000 of student loan repayment. Each branch of the military has their own program depending on their recruiting needs.
If you’re willing to teach in specified low-income areas, you can have up to $17,500 of your loans forgiven. Plus, you still get paid for your teaching job! It's worth checking out if you love to teach and are up to the challenge. There are even some programs that will forgive your loans 100%!
The National Institute of Health has a loan forgiveness program. For veterinarians, the US Department of Agriculture has a program. Many hospitals will pay doctors’ student loan payments. Sometimes this even applies to physical therapists and nurses, as well. Do some research in your field; it could turn out highly beneficial.
Get a federal job:
Many federal agencies are authorized to develop student loan forgiveness programs as a recruiting aid. It's great work, if you can get it. See what's available.
Student loans can be a very challenging burden; however, these programs and more are set up to enable you to eliminate at least part of your debt. In some cases, you can be free of all of it. Imagine how that would feel!
Whenever there are jobs that are hard to fill, there is likely an opportunity to get rid of some of your student loan debt. Search for opportunities in your specific field. The more exclusive the opportunity, the more it's likely to pay towards your student loans. A federal judge can also discharge the debt.
So don’t let student loan debt prevent you from getting the education you desire. With some planning and research, you can come out ahead! If all else fails student loans are forgiven after 20, sometimes 25 years. You may have to pay taxes on the amount forgiven.