Three Ways to Get Your Federal Student Loans Forgiven
If you’re like most people, your student loans probably feel like a ball and chain. Every month, you dutifully make a payment knowing that you’ll be making that same payment next month, the month after that, and so on. But what if you didn’t have to? What if there was a way to get your student loans forgiven?
Here are three ideas for saying “goodbye” to student loans:
1. Teach for five years in a low-income elementary or secondary school. If you are a highly qualified teacher, teach full-time in a school that serves low-income families for five consecutive years, and meet certain other requirements, you may qualify to have up to $5,000 of your remaining student loans forgiven. And if you are a highly qualified special education teacher or secondary math or science teacher, you may qualify to have up to $17,500 of your remaining loans forgiven. The Teacher Loan Forgiveness Program applies to direct Loans and Federal Stafford Loans.
2. Work in public service for ten years while paying off your loans. Under the Public Service Loan Forgiveness Program, you may be eligible to have the remainder of your Direct Loans forgiven if you make at least 120 Direct Loan payments after October 1, 2007 while working full-time for the government or a non-profit organization. If the non-profit is private, it must provide certain public services, such as public health, public education, early childhood education, emergency management, or law enforcement.
3. Work in public service. Working full-time in a public service occupation may make you eligible to have your Perkins Loans forgiven by your school. The list of qualifying occupants is extensive and includes law enforcement, public legal defense, special education, nursing, and firefighting, as well as VISTA and Peace Corps volunteers.
If you’re having trouble paying your student loans, it’s important to find a practical solution so you don’t default on them. For the most part, student loans aren’t dischargeable in bankruptcy, and falling behind on your payments can hurt your credit.
One important thing to remember — if you do get your student loans forgiven, you will then owe taxes on the amount forgiven. The IRS counts forgiven student loans as income; so while you might be able to escape your student loans, you definitely can’t escape taxes.
With offices in Williston and Rutland Vermont, Copper Leaf Financials’ team of experienced financial planners work with clients to assure that ALL of the vital components of your financial plan are in order – from estate planning to retirement planning and college funding planning. We can help you ensure that everything goes according to your plan. For more information call 802.878.2731.