Basis and Understanding: School Loan Forgiveness

School loan forgiveness is most probably the right option if your school loan debt is piling and you do not have a way to pay them off quickly and easily.

Through school loan forgiveness, you can cancel whole or part of your educational loan in exchange for performing some type of public service. For example, serving as a teacher at low-income schools or in schools where there is a shortage of teachers, as a child care provider, serve as a doctor at needy communities, do volunteer work for the armed forces etc.

If you have availed federal loan consolidation then you are eligible for school loan forgiveness program. Loan forgiveness programs are being offered to teachers, nurses, young doctors as well as lawyers and Peace Corps.

School Loan Forgiveness Programs:

There are a variety of school loan forgiveness programs. They are as follow:

Low-income school programs: This program is designed for those students who are willing to teach in elementary or secondary schools that serve the low-income communities. The Perkins loan borrowers can get up to 100 percent of their loan canceled by serving over a period of five years in any such school. Federal Stafford loan borrowers can cancel up to $5,000 if they serve for five consecutive years in an approved school. Few subject teachers like math, science and special education may be eligible for loan forgiveness up to $17,500.

Targeted Teaching Programs: Under this program, Federal Perkins Loan borrowers can get their loan canceled if they teach full-time in a subject area that has a shortage of teachers. These subjects are mostly science, math, foreign languages, and special education etc.

Child-Care Provider Programs: Under this program, you should be able to work full-time as a child-care provider in a facility that is meant to serve the low-income families, in order to receive loan forgiveness. You can be eligible for 100 percent loan forgiveness under this category.

Other school loan forgiveness programs: If you serve as a volunteer for certain organizations for a particular time period, you may be eligible for school loan forgiveness. Organizations such as:

1. The Peace Corps: If you serve as a volunteer under this category for a period of 2 years, you can waive up to 15% (for each year of service) of your school loan.
2. VISTA: Volunteer with private, non-profit groups that help eradicate hunger, homelessness, poverty and illiteracy. Provide 1700 hours of service and receive $4,725.
3. AmeriCorps: If you serve for up to 12 months, you can receive $7,400 in stipends plus $4,725 received as an award for a year of full-time service.
4. Military service: If you are serving in the Army National Guard then you are eligible to receive up to $10,000 through the Student Loan Repayment program.
5. Legal and Medicinal studies: The National Health Service Corps offer loan forgiveness to students enrolled in medicinal programs on the basis that they serve the communities for two years. By availing this program they can wipe out as much as $25,000 every year.

Moreover, the same offer is also valid and open to lawyers or legal advisors who pursue their career at public legal firms. Around fifty law schools are offering school loan forgiveness programs. Equal Justice Works, formerly known as National Association of Public Interest Law, has a list of schools on its website that offer school loan forgiveness program.

Few more conditions to waive off the school loan debt:

There may be few other circumstances under which you can get part or whole of your federal loan forgiven or discharged. Loan discharge is a release of a borrower’s obligation to repay his or her loan. The following are the reasons that may be considered for loan discharge under the federal program:

1. Borrower’s death.
2. Total and permanent disability.
3. Bankruptcy (in some cases).
4. False certification.
5. Of a student's eligibility by the school.
6. Of an unauthorized signature.
7. Of an unauthorized payment.

Goals of School loan forgiveness program:

1. Provides financial assistance to students in order to help them with the cost of the college.
2. Persuade students to choose a particular field or occupation.
3. To attract them to work for a specific period of time in an underserved region.
4. To entice them to remain in a high need occupation, region or underserved facility.