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Understanding Obama’s Student Loan Forgiveness Student loans are holding back America’s youth. In recent years, student loans have become America’s second biggest monetary problems, followed only by mortgages. It’s not impossible to become free of your financial burdens so that you may move on with your life. Some borrowers may qualify for Student Loan Forgiveness or income-based repayment plans. Income-based repayment plans are just a temporary fix for a permanent problem. Those lucky enough to qualify for student loan forgiveness should take advantage of the program. It may come as a surprise that according to The Consumer Financial Protection Bureau, one in four public service employees are eligible for student loan forgiveness as part of their work benefits package.
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Many types of government loans are eligible for forgiveness under this program including Direct Loans, Perkins Loans and Federal Family Education Loan (FFEL) Program loans, such as the Stafford loans. Private loans are not currently eligible for Obama’s Forgiveness Program.
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So you may be wondering who qualifies. Educators, working for public or nonprofit schools, qualify for loan forgiveness. Full-time educators, working with low-income families, are offered up to $5,000 loan forgiveness after the completion of their fifth teaching year. Elementary/secondary special education teachers and secondary math and science teachers qualify for up to $17,000 of student loan forgiveness. Public service employees may also qualify for student loan forgiveness on Direct Loans–Perkins or FFEL loan. Individuals working full-time for a government agency for a non-profit organisation with tax-exempt status may also be helped by this loan forgiveness program. One of the stipulations is that you must make 120 on-time, full, scheduled monthly payments on your current Direct Loans after October 1, 2007. It’s important to note that these 120 payment but be made after becoming an employee of a qualifying Non-profit organisation or government agency. It’s important to note the financial stability of your employer because the 120 payments must be made while employed by the same organisation, school, or government agency. Some individuals have been discouraged after their school or NPO went out of business, leaving this disqualified for student loan forgiveness before their 5 years were completed. In the event of a bankruptcy, the employee may be eligible for claim a loss in court during the bankruptcy case. In summation, loan forgiveness is worth researching to understand how it may apply to you. Those working for schools, non-profit organizations, government agencies, and tax-exempt employers should look into student loan forgiveness.