Good deeds get rewarded

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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