Graduates who find employment in certain nonprofit or public positions may find that they qualify for the Department of Education’s Public Service Loan Forgiveness program. This program will forgive all federal student loans a borrower may have if they work in the public or nonprofit sector and make 120 on-time, qualified monthly loan payments. Borrowers must remain in a qualified position for ten years and be employed full time.
This forgiveness program applies only to federal student loans, and some loans, such as Federal Family Education loans and Perkins loans, must be consolidated into a federal direct consolidation loan before they will be forgiven. Borrowers must complete the consolidation program and then submit the required information and verification of employment to FedLoan Servicing, the servicer for the Public Service Loan Forgiveness program. FedLoan will determine if the borrower qualifies for the program and track their employment progress if they do.
The program began in 2007, which means the first batch of student loans to be forgiven will occur in October of next year. Many of these borrowers believed they would continue to pay on their student loan debt for years, perhaps for the rest of their lives. Those who qualify for student loan forgiveness include teachers, librarians, those who work for nonprofit organizations, and some select lawyers and physicians.
In addition to this federal program, many states also have loan assistance programs to help those in the public and nonprofit sectors.
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