How Can I Have My College Debt Lowered?
More than half of today's college students will have accumulated some type of college debt by the time they graduate. Paying back student debt may take years, and the principal and interest you accumulate may be in the thousands of dollars. Lower the cost of your student debt to avoid interest payments and escape some of the loan principal. The federal government offers loan reduction as an incentive for certain types of career-related service.
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Take advantage of the Public Loan Forgiveness Program. This program will cancel the remainder of your debt after you make 120 qualifying payments while being employed full-time for a government office or in certain sectors. You can use regular repayment or income-based repayment. You cannot miss a payment and still have your loans forgiven at the end of the program. Qualifying fields include public education, public health, public safety, public libraries, government offices and services for people with disabilities. You must have Direct Loans to benefit from this program, and cannot apply for an early forgiveness until you've served all 10 years and made all 120 payments.
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Use the income-based repayment plan. After 25 years of regular payments on this plan, the rest of your student debt will be forgiven. This is especially helpful if you have high debt and work in a field without a high income. Having other financial obligations that reduce the cost of your monthly repayments also makes the 25-year loan forgiveness program helpful for students on a budget. You can apply for income-based repayment through your lender.
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Serve in AmeriCorps. One year of service will give you $4,725 dollars to use on your loans, as well as another $7,400 in stipends that you can choose to put on your loans. In addition, you can defer repayment of your loans while working as an AmeriCorps volunteer to ensure that you don't fall behind on your payments.
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Work with Volunteers in Service to America. Performing 1,700 hours of service to help end hunger, homelessness, poverty and illiteracy through a private organization will make you eligible for $4,725 dollars.
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Apply for repayment plans through your career field. There are programs for teachers, military personnel, law enforcement and medical professionals who work in public service or non-profit positions. You can get additional funds to put on your loans or you can have a portion of your loans forgiven for each term of service.
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