Student Loan Forgiveness
Here's a little bit of sunshine for those who have long dreamed of becoming a school teacher or serving patients in disadvantaged neighborhoods but have decided against it because of mounting student loans: student loans don't matter.
Student loans that reach into the sixfigure category are fairly common. Even with very low interest rates, these loans can take decades to pay off. This burden has traditionally driven students away from lowpaying careers like teaching or volunteering in favor of more lucrative careers. A recent rise in student loan forgiveness programs, however, is making students take a second look.
Under the College Cost Reduction and Access Act of 2007, students heading into public service careers can decrease, or eliminate altogether, their student loans. To mitigate the financial cost of schooling and the low pay in the public sector, the federal government will either reduce loan payments based on family size and income or forgive loans completely.
The careers that will benefit from this program include military, volunteering, teaching, and legal or medical practice in underprivileged areas. Especially in careers like teaching and volunteering, these forgiveness programs are sure to renew student interest. Moreover, talented young attorneys and doctors may be incentivized to serve in previously underprivileged areas.
Fortunately, many of these careers are proving resilient in the current economic crisis. The need for teachers, for instance, continues to grow despite massive job losses in other fields. The need for health care also has not waned in the recession. In other words, these careers may be eligible for partial or complete forgiveness of student loans and promise job security for years to come.
The first of these programs will go into effect July 1, 2009.To qualify for the program, borrowers must be employed by the federal, state, or local government, any nonprofit, 501(c)(3) organization, or work fulltime for AmeriCorps or Peace Corps.
Written by Classes and Careers, www.classesandcareers.com