Student loan forgiveness is a way of helping individuals get out from under their ponderous financial commitments, but only if they qualify for one of the four major programs that are available. These opportunities can greatly reduce the amount you owe or cancel the remainder of your balance altogether. But in order to qualify, you need to choose the right plan and your job will play a factor in your approval.

One of the main obstacles that will eliminate you from consideration is if your loan is currently in default. Loans in default are categorized as such if they remain unpaid for longer than nine months. Another thing to be aware of with these programs is that private loans do not apply, only federal student loan accounts are eligible. Should you encounter a problem with a loan from a bank or other private financial entity, you may be able to enter into an arrangement where you make payments solely on the interest or receive a reduction in your interest rate for a temporary period of time. A company that has positive reviews in the student loan and debt repayment industry AmeriTech Financial helps facilitate loan repayment restructuring that may be beneficial for those in this category.

Public Service Loan Forgiveness

This program allows you to forgive the remainder of your loan balance under the condition that you enter into full time employment with a non-profit organization or government body for a duration of no less than ten years. In order to qualify, you may work as a firefighter, a teacher, a nurse, or military. Only federal direct loans apply to this type of forgiveness program, which can be a smart way to go if you already plan to work in a public service position. You will also be required to have made at least 120 loan payments on time.

Teacher Loan Forgiveness Program

This plan pertains to direct or Stafford loans and you can qualify if you have worked full time for five consecutive years in a low-income public school. In addition, the loan must be older than October 1, 1998 and there is a limit of $17,500 towards how much can be forgiven. This plan is best for anyone who plans on meeting or is currently in compliance with these employment requirements and if their loan balance falls under the limit.

Perkins Loan Cancellation Program

Similar to the Public Service Loan Forgiveness program above, this one could forgive up to 100% of your balance on a Perkins loan if you work in any public service job for more than five years. The same occupations apply, as do teachers and librarians. If you are a teacher, you must teach in a low-income public school but you can’t just teach any subject. You must meet eligibility by focusing on math, science, foreign language or special education courses. In order to have all of your debt erased, you must continue teaching for the full five years as your balance is incrementally reduced per year. 15% for years one and two, 20% for the third and fourth, and the last 30% in year five.

Income-driven Repayment Plans

This program offers four different repayment plans that allow you to pay off part of your loan balance each month based on how much you earn in income. Once you enter into one of these programs you will make payments that will be significantly lower than your monthly installments. After you pay through this program for a duration of 20 to 25 years, the rest of the balance is wiped clean and your loan paid in full. The types of loans that are eligible vary per each available plan offered, but all of them are good alternatives for anyone having trouble paying off the remainder of their loan balance.

Applying for a Loan

The best way to apply for any of these qualifying programs is to call the servicer handling your student loan and ask them to enroll in the corresponding program for your particular type of student loan. But be sure you have any corroborating material to prove that you qualify for the program. Some application processes might require you to consolidate loans first in order to meet the eligibility requirement for that program. Your loan servicer will be able to give you all of the paperwork you need to begin the application process.

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