College graduates that have left school with a high amount of student debt, or perhaps will be leaving their university career with a large sum of financial aid debt may be able to get a student loan forgiveness plan to work for them. While new legislation for the Obama Administration is going to make dealing with federal student loans a bit easier in the future, college graduates in the present are looking for ways to get rid of their debt.
The easiest form of debt to get rid of or find a forgiveness option for is federal student debt. Federal student loans are common amount college students and can mount up if one doesn’t have many other sources of financial aid available.
Commonly, careers are the best way to have student debt forgiven. If you are undecided on a job, still in school, or open to a career change, you may be able to get your student loans forgiven if they are federal loans and you enter into a public service field like teaching, volunteering, the military, or the medical field. There are also federal occupations that will offer loan forgiveness or repay a percentage of your student loans for every year of service up to a set amount.
Those who are without a public service career may be eligible for student loan forgiveness, but this typically comes after 25 years of on-time payments. This can be a good option for those with a large amount of student debt, but for graduates with a small to medium amount of debt may have their loans paid off by that time.
However, if your student loan payment from month to month is too costly, and you have a large amount of debt without the income to match, you may qualify for an income-based repayment plan. These plans allow you to pay only a small percentage of your income each month to your lender, and can be a good option if you feel that the 25-year forgiveness mark may be a good fit for you.
Again, though, mostly the only loans forgiven are federal student loans, but the best way to find out your options, if you are struggling to make payments or are in a public service career, is to contact your student loan lender and ask.