Dear Debt Adviser,
I am 56 years old and have about $80,000 in student loans from my master’s degree, which I completed about eight years ago. The monthly payments are a huge pain now but will be impossible when I stop working. Is there any way to get the balance forgiven by being a senior citizen?
— Nancy

Dear Nancy,
Senior citizen? Not even close at 56! Congratulations on completing your master’s degree when you were 48. Unfortunately, you, like so many younger people, also accumulated a large student debt load in the process.

Your question is whether or not your loan balance would be eligible for forgiveness. The short answer: It depends, but it’s not going to be easy. I can tell you, however, that the fact that you are or may become a senior citizen is not one of the avenues for loan forgiveness that I have found in my research of the topic.

The easiest course of action is to keep working until you can’t afford to. Looking for someone else — your taxpayer friends and neighbors — to pay for your education is not something I can easily endorse. If you can’t afford to retire and pay your expenses, then it is hoped your good health and employment will continue until you can.

To answer your question, the first thing you need to check is if the loans are federal loans or private loans. Most forgiveness programs are for federal loans. In general, to qualify for federal loan forgiveness, you must volunteer with a participating organization, perform military service, teach, practice medicine in qualifying communities and circumstances, or meet other specific guidelines of a particular loan forgiveness program. You can find more information by going to

In addition, many companies offer student loan repayment programs for their employees. I would start with your own company and ask what might be available. You also might consider seeking employment elsewhere if your degree does not play an integral part in your job duties at your current employer. Since you went through the effort to obtain your degree, you might be able to find work using the skills you learned and get some of your loan repaid as a bonus.

Keep in mind, none of the forgiveness programs that I have found will forgive an amount as high as $80,000.

To help you get started with developing a plan to repay the loans before you retire, here are a couple of suggestions. Begin by making sure you are paying the lowest interest rate on the loans as possible. If you have not consolidated your loans, I would recommend starting the process by shopping around for the best consolidation deal.

Next, take a realistic look at your finances and determine how much you will need to pay monthly to retire your debt before you want retire. Notice I said “want” to retire. You may have to work a little longer than planned if you don’t have enough income to pay off your loans before you reach retirement age.

One other thought is the new federal Income Based Repayment, or IBR, plan that will be available July 1, 2009. You need to meet certain income standards to qualify. The maximum repayment period is 25 years. After 25 years, any remaining debt will be discharged, or forgiven. Under current law, the amount of debt discharged is treated as taxable income, so you will have to pay income taxes 25 years from now — when you are a spry 81-year-old — on the amount discharged that year.

Another item to check is the College Cost Reduction and Access Act of 2007. This program discharges any remaining debt after 10 years of full-time employment in public service. The borrower must have made 120 payments as part of the U.S. Department of Education’s Direct Loan Program to obtain this benefit. Only payments made on or after Oct. 1, 2007, count toward the required 120 monthly payments.

You can check out whether you would be eligible for these programs and get some other great information by visiting the FinAid Web site, which was established in fall 1994 as a public service. For more information on college savings, see

Good luck!

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