Am I eligible for Loan Forgiveness?
If you work in public service, a little-known government program called “Public Service Loan Forgiveness” could allow you to have all of your direct federal student loans forgiven, tax-free. Public Service Loan Forgiveness (PSLF) isn’t a payment plan; it’s a separate program that incentivizes a career in the public service.
To qualify for the program, you need to make 10 years of qualifying on-time payments (120 in total) toward your federal student debt. You must be working in public service at least 30 hours a week (you can combine multiple part-time jobs to meet this requirement) beginning after October 1, 2007. After you make your 120th on-time payment, the U.S. Department of Education forgives your remaining federal student loan debt.
The Student Loan Debt Crisis
U.S. Americans currently owe over $1.3 trillion in student loan debt. 40 million people now find themselves burdened by astronomical personal debt, and the number is growing, impacting the consumer market as it becomes harder for young families to make substantial investments or to purchase cars, as this crisis spins out of control. College costs have increased 1,000 percent since the 1970s as public universities have become increasingly privatized. Now, students graduate with an average of more than $25,000 in debt.
Some graduates have over $100,000 in debt. The Institute for College Access & Success found that seven in 10 seniors (69%) who graduated from public and nonprofit colleges in 2013 had student loan debt, with an average of $28,400 per borrower. For more information, read the Local 21 Student Loan Resource Guide.