Good deeds help pay
down college debt
Doing good could catch you a break
on your student loan payments.
Recent college grads can cancel
part or all of their federal education debt by working in public service jobs
-- lower-paying professional jobs that serve low-income communities -- or by volunteering.
forgiveness programs are available to everyone from teachers to nurses to young
doctors and lawyers to Peace Corps volunteers.
who work in low-income elementary or secondary schools may be able to cancel as
much as $5,000 of their federal Stafford loan debt.
five grand gets eliminated from a teacher's loan balance after he or she completes
five years at a designated low-income school.
sort of like a salary bonus," says Carol Lindsey, vice president for policy
and compliance at Texas Guaranteed, which has canceled $80,000 in Stafford loans
for 17 teachers who already have completed five years and have returned to school
for advanced degrees.
The program is
available to teachers who borrowed Stafford loans after Oct. 7, 1998. Teachers,
with student debt prior to that date are not eligible for the loan forgiveness
More information and a listing
of low-income schools are available on the U.S.
Department of Education Web site.
with recent Stafford loans should take a close at the program.
may be a lot more folks who qualify for the program than realize," Lindsey
Recent grads with federal Perkins
loans should take note as well. There are a whole slew of forgiveness programs
Get with a program
You could cancel as much as 100 percent of your federal Perkins loan debt by:
- Working as a full-time teacher in an elementary
or secondary school that serves students from low-income families.
as a full-time special education teacher.
- Working as a full-time
provider of early-intervention services for the disabled.
math, science, foreign languages, bilingual education or in other fields designated
as teacher shortage areas.
- Working as a full-time employee
for a public or nonprofit family services agency.
as a full-time nurse or medical technician.
- Working as a
full-time law enforcement or corrections officer.
as a full-time staff member in the educational side of a Head Start program.
a Perkins loan, your school acts as your lender. Because of this, questions about
deferring or canceling a Perkins loan should be directed to the financial aid
department of your college or university.
A chart detailing
federal loan forgiveness programs is available on the Mapping
Your Future Web site.
More information on Teacher Loan
Forgiveness programs is available on the U.S. Department of Education Web site.
Young medical and legal professionals that are pursuing service-oriented
careers may be able to eliminate a big chunk of their education debt. And these
folks need relief.
It's not unusual for a young doctor or
lawyer to begin their professional careers loaded down with debt. Debt burdens
of $50,000 to $100,000 are common.
Health Service Corps offers loan-forgiveness programs to physicians, nurse
practitioners, physician assistants, midwives, dentists, dental hygienists, psychologists
and therapists that work for two years in communities in great need of health
Participants in the program may wipe out as
much as $25,000 in loan debt each year.
The NHSC Web site
includes a listing of state-based
loan repayment programs for medical professionals.
programs are available to attorneys that pursue public interest careers. About
50 law schools offer loan forgiveness or loan repayment assistance programs. Equal
Justic Works, formerly National Association of Public Interest Law, has a
listing of the schools on its Web site. The site also lists state and employer
loan repayment assistance programs.
Many attorneys would be
unable to pursue lower-paying public interest law careers without these kinds
Save big bucks
Consider these numbers.
According to Equal Justice Works website,
the average salary for a public interest lawyer is $35,000 a year, which boils
down to a net income of about $2,916 each month. The average education debt for
a law school grad is $84,400. Under a 10-year repayment period, a grad would shell
out $703.00 a month in loan payments.
program at the University of Virginia Law School offers 100 percent loan forgiveness
to law graduates who make less than $35,000 and pursue legal careers in Virginia.
Grads making $35,000 to $60,000 may have a portion of their loan payments forgiven
At Harvard University, any Harvard law school grad
making $36,000 or less a year may have their loan payments forgiven. Those making
$36,001 to $81,000 may have a portion of their law school debt canceled as well.
volunteer organizations also provide assistance with student loan debt.
Corps volunteers who complete a two-year term can wipe out a percentage of
their Perkins loans' balance. Student loan payments may also be deferred while
serving in the Peace Corps.
Members of Americorps
for America receive educational awards of $4,725 for each year of service.
These awards can be applied to student loans or future education expenses.
service terms, members with student loans may qualify for loan forbearance. With
forbearance, you are not required to make loan payments but interest will continue
to accrue on your loans.
Americorps will pay some or all of
the interest that accumulates during this time. Many members won't have to pay
a penny toward their student loans while serving their terms.
lot of people would like to do a national service program like Americorps or teach
in an under-resourced school, but the salary being what it is you won't be able
to make loan payments," says Erin Tunney, an applicant communications associate
with Teach for America.
Tunney called the loan forbearance
and educational awards programs "a huge help."
should know. A 1999 graduate from the University of Virginia, Tunney taught for
two years in a school in the Bronx with Teach for America.
owed more than $12,000 in student loans at the time. Not having to make student
loan payments while living on a teacher's salary was a relief.
received $9,450 in educational awards for her two years of service and was able
to pay off three-fourths of her loan debt.
"As soon as
I got the education award I would pay it right back to the loan company,"
She made her final student loan payment two weeks
"I'm 2-and-a-half years out of school, and I was
able to pay off the whole thing," says Tunney, 24. "I'm completely debt-free.
It's a wonderful feeling."