As a student, you might take out a loan to pay for college. However, some time after, it might be a big challenge for you and your family to pay the loan back. As a way out, you can apply for the federal loan cancellation, so in this article we’ll provide you with four tips on how exactly you can do it.
It is possible to get reduction or cancellation of your college loan from public services depending on the program you choose. When applying for forgiveness, make sure that your loan has been paid for a specific period of time (9 months). Public service can guarantee your loan forgiveness fully or partially if you have been working full time for a governmental or non-profit institution for a minimum of 10 years. This program works only for direct federal loans. This method is good for those who plan to work in the sphere of public services such as teachers, firefighters, the police, doctors etc. or for those who already do. Contact your loan servicer and then fill out the papers with your employer. You’ll have to submit this form every year. You can apply until October 2017.
Teacher loan forgiveness is available for those who plan to work in the education sphere, specifically in public schools (secondary and elementary) with low income. You can apply if you have Stafford loans or direct loans. Teacher loan forgiveness presupposes a maximum of $17,500 forgiven within five years. It is good for those who plan to teach at school and can apply by submitting teaching requirements.
Perkins loan cancellation presupposes that up to 100 per cent of your loans can be canceled if you are employed as teachers, librarians, the policemen, nurses or have other public service jobs after five years. Perkins loan cancellation allows you to borrow $27,500 as an undergraduate student and $32,500 more as a graduate.
Besides, you can also follow the income-driven repayment systems that are based on percentage repayment from your income per month. The main thing here is to be informed and follow any changes in the federal law concerning loan forgiveness.Published: September 26, 2016