If you've heard of a student loan forgiveness but do not quite understand what it actually is, then you better like to read the entire content of this article. Here, we will be discussing the FAQs about student loan forgiveness. After reading this article, you will have a good background to how such loan works and if it's a great choice for you.
Question number 1. What is student loan forgiveness - the loan forgiveness has started back in October 2007 with passage of Access Act and College Cost Reduction. It lets the remaining balance of student loans to be forgiven after there are 120 payments made on time given that some conditions are met.
Question number 2. Are all loans eligible for forgiveness - actually no. Qualified loans are only the ones under the Direct Loan Program. In the event that the loan wasn't made under direct loan program, then you'll have to consolidate the existing loans into the program. Click for more here.
Question number 3. I'm 5 years into my loan, does this indicate that I am eligible for forgiveness in five years - again, No. The Act is stipulating that 120 payments should be made after the CCRA passed which means that, the earliest that any loans would be eligible for forgiveness will be in 2017.
Question number 4. What can be done in order to qualify for forgiveness - you have to work in any public service profession for the whole 120 months or 10 years that payments are made including when you applied for forgiveness. To understand more about loan, visit https://en.wikipedia.org/wiki/Loan.
Question number 5. Can anyone who is working in public service is qualified - still, the answer is No. The program is meant to reward those who have dedicated their professional lives to public service and by doing so, accepting a low salary. Since the term of student loan is 120 months and the program is offering forgiveness only after 120 months, only those that qualified for income Based Repayment plans are going to benefit from it. What is meant by this is, you should have a low income and high debt level before you can qualify.
Question number 6. Are there other conditions in the loan?
Yes, the student loans should be in a good standing and might not be in default. Also read about how to combine student loans with spouse.
Question number 7. What kind of jobs can qualify as public service?
As a matter of fact, there are many from firemen, policemen, military, public education, government, public health, public child care, public law, public library and emergency management. Basically, any public service job will do.