Guest post: When student loans are no longer subject to repayment

US-PDGov

By: Jung Stone

We've seen in the news that student loan debt in United States has exceeded over a trillion dollars. To make the matters worse, the total debt amount has been continuously growing due to student borrowers who are not able to make their payments.

The good news is that the government provides various student loan forgiveness programs for federal student loan borrowers under certain conditions.Unfortunately, individuals who have taken out private student loans are not eligible for this government sponsored program.

Following is a list of the available loan forgiveness programs:

Teacher loan forgiveness program

This program was designed to encourage individuals to teach in areas where there are shortage of teachers or a large population of low income families. Types of federal loans that are qualified for the teacher loan forgiveness program include Stafford, Direct Subsidized, and Direct Unsubsidized loans with the maximum amount capped at $17,500.

In order to be eligible, an individual is required to teach for five consecutive academic years at designated schools by the US department of education and should not have any history of default in their student loan payments.

Public service loan forgiveness program

The public service loan forgiveness program was created in 2007 to promote more individuals to work in the public sector. Direct loans including Stafford, PLUS and Consolidation are qualified for this program. Types of public jobs include government and non-profit organizations such as public safety and various service sectors.

Under the public service loan forgiveness program, an individual needs to make all scheduled payments of his or her federal student loans for 10 years (120 payments) while working in the public sector. Once this requirement is met, the remaining debt will be forgiven.

Military student loan repayment program

The military student loan repayment program is divided into Army, Navy and Air Force and each has different programs. The total amount of repayment for each military division varies and has different eligibility requirements. For instance, the Army pays up to maximum of $65,000 of student loans while the Air Force's max amount is $10,000 per recruit.

Medical/law loan forgiveness program

The loan forgiveness programs for medical students are created to serve areas where there are shortages of health-related resources. Students who have graduated from medical schools with federal student loans can qualify if they work for non-profit public health care organizations for a certain number of years. As each state and school offers various types of loan forgiveness programs, it is strongly advised to talk to your particular school admissions department.

Similar to the medical loan forgiveness program, many states also offer loan repayment assistance programs to law graduates who work full-time in public interest sectors for a certain number of years (usually up to five consecutive years).

Ways to finance college costs

Paying for college is something that can be facilitated by a few practical and thoughtful steps. The opportunity cost of going to college can be in the tens of thousands of dollars, not to mention the actual expenses associated with enrolling in college programs. Despite these education costs and expenses, there are ways to lower both the opportunity cost and the expenses of college education significantly. This article will outline some of those methods.

College savings plans

Depending on how far into the game you are, your parents may have set up a college savings plan such as the 529 college savings plan for you when you were a child. If you don't plan on attending college for several more years it may be a good idea to look into this type of plan as they are completely tax free in terms of deductions and withdrawal so long as the money is used for designated college expenses.

Living with family

Residence is one of the biggest expenses at college. A typical college year can last 8 months and include room and board and dining expenses in excess of $8000/yr. After 4 years that's a lot of money. While living at home doesn't include the complete college experience, it might be worth  not incurring tens of thousands of dollars of student loan debt to miss out on dorm and near campus life depending on how intent you are on paying for college.

Transfer credit from community college

Some community colleges offer courses that can be transferred with relative ease into a University program. If you are planning on enrolling in a university program, looking into the local community college courses and transferability to universities may well be worth it. Additionally, depending on the community college, one may not want to or have to attend university if the program one is interested in can be achieved through community college.

Corporate tuition assistance

If you are lucky, you might be able to land a job with a company that has tuition assistance. Even if it isn't 100 percent assistance or grade based assistance it is worth the time spent filling out the application to try and redeem such valuable job benefits. Additionally, one doesn't always have to be employed by a savvy large corporation to receive such benefits, a small business owner may see such assistance as the perfect tax deduction and might be worth asking for instead of a raise.

Consortium universities

Some universities may be members in a regional tuition consortium allowing students from one state to attend universities in another state at a discount to the normal out of state tuition. After establishing residency which is usually a period of 1 year, those students may qualify for instate tuition. Calling different universities admissions offices is a good place to start in researching this possibility.

Register as in-state not out of state/attend state vs private school

The difference between instate and out of state tuition can be enormous. It might be worth establishing residency before hand in order to qualify for the lower tuition at State schools. Private schools may not honor the in state and out of state guidelines since they are private institutions. Additionally private schools tend to charge much steeper tuition costs. There are many credible state universities that's education program is considered at par with if not better than some top tier private schools.

Buy used text books

Many college and university bookstores offer resale programs for books that are used in consecutive or repeated semesters. This allows new students to buy books from previous students who have resold their books back to the college or university bookstore. After 40 classes of course work, some with 2 or 3 textbooks each the savings on used books can add up. The price of used textbooks can be marked down by 10% or more depending on the condition.

Sell text books online

If the textbooks your class uses are new editions they could be worth something through online retailers. To optimize on this technique, purchase used text books through the book store or online and then resell them to minimize costs. Since textbooks can cost up to and sometimes over $500.00/semester, the potential savings are in the thousands of dollars over a traditional 4 year university program.

Employment during enrollment

Working during school can help pay for costs in addition to making graduating on time a lot tougher. Depending on whether you work full or part time will make a difference on how much you can earn versus how many credits to enroll in. Burn out is possible when working full time and attending a rigorous academic program so be realistic with yourself as well.

Avoid student loans and credit card expenses

Student loans may seem like the easy option at first but depending on the interest rate upon graduation and thereafter, the interest on the loans can multiply the real cost of attending college or university. Avoiding these methods of payment may be impossible, but keeping the future cost in mind is prudent.

Apply for scholarships and grants

Good grades and standardized test scores can mean one very good word, scholarship. While test scores alone don't translate to scholarship they can be a big help. Researching the different types of scholarships and grants available and applying for them properly is key to qualifying for this type of free education. It is worth the time to work for and try for these types of funding.

Paying for college may seem daunting at first and the prospect of debt may not seem appealing at all and that is because it isn't. However, if you decided the opportunity cost of an education is worth it and will pay back more in the future, then the next step is to find ways to minimize these costs and expenses. The tips and methods in this article can help with just that. The more of the tips that are utilized and the more consistently they are applied, the greater the potential savings, affordability and practicality of paying for school can be.