New student loan forgiveness program requires complete understanding
Reported in Marketwatch
Student loan borrowers who commit to a decade of public service may see the remaining balance on their federal student loans forgiven under the government’s new public-service loan forgiveness program.
Borrowers who enter public-service fields such as law enforcement, public education, or certain nonprofit work could have their remaining federal student loan debt forgiven, provided they work full-time for 10 years in an eligible public-service field and make 120 monthly payments on their college loans during that time.
To be eligible for the loan forgiveness program, borrowers must have taken out student loans, parent PLUS loans, or a federal consolidation loan through the Department of Education’s federal Direct Loan Program. Borrowers who took out their federal student loans from a private lender through the Federal Family Education Loan Program (rather than directly from the government through the Direct Loan Program) will have to consolidate their FFELP student loans into the Direct Loan Program in order to qualify for the loan forgiveness benefit.
The public-service loan forgiveness program is a provision of the College Cost Reduction and Access Act of 2007, which also increased federal grant aid to needy students and was intended to provide student loan borrowers with the incentive to consider and continue working in often low-paying public-service fields. For the rest of the story, click here.