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For generations, students have dreamed their student loans magically disappeared. Well, take heart. It can happen. Good things happen to good people, they say, and it’s particularly true when it comes to student loans.

Some of your good deeds could actually result in reduction — or even total discharge — of your student debt.

Recent college grads, for example, 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.

Loan forgiveness programs are available to everyone from teachers to nurses to young doctors and lawyers to Peace Corps volunteers.

Teachers 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. The five grand gets eliminated from a teacher’s loan balance after he or she completes five years at a designated low-income school.

It’s sort of like a salary bonus. The program is available to teachers who borrowed Stafford loans after Oct. 7, 1998.

More information and a listing of low-income schools are available on the U.S. Department of Education Web site.

Recent grads with federal Perkins loans should take note as well. There are a whole slew of forgiveness programs available.

Get with a program

You could cancel as much as 100 percent of your federal Perkins loan debt if you work full-time as a:

  • Teacher in an elementary or secondary school that serves students from low-income families.
  • Special-education teacher.
  • Provider of early-intervention services for the disabled.
  • Teacher of math, science, foreign languages, bilingual education or in other fields designated as teacher shortage areas.
  • Employee for a public or nonprofit family-services agency.
  • Nurse or medical technician.
  • Law enforcement or corrections officer.
  • Staff member in the educational side of a Head Start program.
  • Volunteer in AmeriCorps.

With 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.

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Loan balance reduction

Young medical and legal professionals 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.

The National 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 professionals.

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.

Similar programs are available to attorneys that pursue public interest careers. About 50 law schools offer loan forgiveness or loan repayment assistance programs. Equal Justice 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 of programs.

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.

The loan-forgiveness 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 as well.

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.

Several volunteer organizations also provide assistance with student loan debt.

Peace 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 and Teach 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.

If you think you might qualify for a full or partial discharge, contact your lender or visit the federal Direct Loan Servicing Center website to download application forms.

Conditions that can make you eligible for loan discharge:
  • Your school closed before you could complete your program;
  • Your signature was forged on your promissory note;
  • You file for bankruptcy (though loan cancellation occurs rarely even then — and only when the bankruptcy court rules that repayment would constitute an undue hardship); or
  • You die or become totally and permanently disabled.

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