You studied for long hours, worked hard, graduated and found your first job! Congratulations. But now you also have mounting debt from all those loans that got you through school in the first place. Maybe you can manage for a few years to handle it through economic hardship deferment or forbearances. But eventually something has to happen: either you find a job possibly in the private sector or look at some of the options for student loan forgiveness.
According to Stafford Loans online there are several student loan forgiveness programs that pay off (or cancel) all or part of a borrower’s federal student loans in exchange for service in a particular occupation or volunteer service. The goal of such programs is to encourage individuals to pursue a particular career path, especially one that involves a low salary or high student loan debt. There are also loan forgiveness programs for occupations of strategic importance to the United States or where there is a national or regional shortage of qualified workers.
Stafford also explains “other options for eliminating student loan debt include student loan cancellation and discharge, which release the borrower from the obligation to repay the debt, and student loan settlements, which accept a lump sum payment from a defaulted borrower in exchange for cancellation of the remaining debt. These options do not depend on the borrower working in a particular occupation.”
There are occupation specific loan forgiveness programs that you may want to consider. For example students who enter the field of teaching, volunteer work, law, government employees, and military service may qualify for public service loan forgiveness.
There are still other types of loan forgiveness that requires the borrower to work in a particular occupation for a certain amount of time. There are two types of student loan forgiveness programs, up-front forgiveness and back-end forgiveness. Up-front student loan forgiveness cancels part of the student loan debt for each year of service, as it occurs. Back-end student loan forgiveness cancels all remaining debt after a number of years of service. Public Service Loan Forgiveness is an example of a back-end loan forgiveness program.
As always each situation is different so consult a qualified loan officer or the company that handles your specific type of loan for further assistance.
Unfortunately, when it comes to federally guaranteed student loans, bankruptcy really offers no assistance. As you may have recently read, student loan liability has become a major political issue. While there is talk of expanding community service opportunities as a way to liquidate student loan liability, political gridlock makes the likelihood of this occurring quickly remote. Hopefully, government will eventually see the student loan problem for what it is. Until then, death remains the only way to rid oneself of these obligations.