Public Service Loan Forgiveness
Under a bill expected to be signed by President Bush, public service workers can have their remaining student-loan balances forgiven after 10 years in a qualifying job and 10 years of payments.
Q: What jobs are eligible?
A: A full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education (including early childhood education), social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy in low-income communities at a nonprofit organization), public child care, public service for individuals with disabilities or the elderly, public library sciences, school-based library sciences and other school-based services, or at a 501(c)(3) non-profit organization that is tax exempt. This includes most universities and private schools.
Q: What loan payments count toward 10 years of repayment?
A: Only payments made after Oct. 1, 2007
Q: What loans are eligible?
A: Federal direct Stafford (subsidized and unsubsidized) loans, federal direct grad Plus loans, federal direct consolidation loans.
Q: What loans are not eligible?
A: Private education loans and parent Plus loans are not eligible. Stafford or grad Plus loans granted through the Federal Family Education Loan Program are not eligible unless they are consolidated or reconsolidated into a federal direct loan, which would be eligible.
Q: How can I take advantage of the program?
A: If you don't already have direct loans, consolidate or reconsolidate your FFELP loans into a direct one. Enter an income-contingent repayment plan. After July 1, 2009, switch to the new income-based repayment plan.
Q: Will my income affect my benefits?
A: The lower your income and the higher your debts, the more benefit you will get from the program. People with higher incomes might not benefit at all.
For a student with $100,000 in debt, "Once you hit about $55,000 in income, the benefits phase out pretty quickly," says Philip Schrag, a law professor at Georgetown University and ardent supporter of the program.
Source: Chronicle research