How Can I Get Out of My Student Loans?
Paying off your student loans doesn't have to take forever. You might be able to lower the amount you owe or possibly even get out of paying them altogether. Whether you apply for one of the programs to help you repay the loan, work for a company that offers a repayment plan or file for bankruptcy, do some research to be sure you are making the right choice.
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Look into the IBR plan. The Income-Based Repayment plan helps people with federal student loans make the payments more affordable. Because installments are based on your income and family size, loan payments may be less than 10 percent of your pay. After 25 years, any remaining debt is forgiven. You have to be part of a direct (FDSLP) or guaranteed (FFEL) loan program or have a federal loan to qualify.
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Check your eligibility for PSLF. If you work at a public service job you may be eligible to receive Public Service Loan Forgiveness. The program enables people with student loans to stop paying them after 10 years, provided they've made qualifying payments during that time. Public-service jobs that may qualify include working for a nonprofit organization, federal, state and local careers as well as AmeriCorps/VISTA and Peace Corps. The program covers federal Stafford, Grad PLUS and consolidation loans if they are accepted in the direct loan program. If you have a guaranteed loan (FFEL) you must switch to a direct loan to be accepted.
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Consider bankruptcy. If you cannot pay your loan and are having severe financial problems, then filing for bankruptcy could be an option. However, a bankruptcy will stay on your credit record for 10 years and could have serious, long-term repercussions. With lawyer and filing fees, it can cost hundreds of dollars to file for bankruptcy, if you qualify. Chapter 7 bankruptcy gives a person a fresh start by liquidating all non-exempt property. Chapter 13 bankruptcy is done over a period of three to five years and is suitable for people who have income and want to pay off their debts over time.
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Explore other options. Certain fields of work and jobs enable you to receive loan repayment or loan forgiveness. Teaching in a low-income school full time can qualify your Perkins and Stafford loans to be canceled. You can also apply for repayment if you are a specialty teacher. The Peace Corps will pay up to 70 percent of your loans depending on how many years you serve. AmeriCorps will give you $4,725 toward student loans if you volunteer for a year; VISTA offers repayment assitance for people who complete at least 1,700 hours of community service. Some companies and state government jobs offer loan repayment, especially for people who have low incomes.
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