Student Loan Forgiveness Programs

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My sister is a public school teacher in Boston. She’s participating in a program where her student loans will be paid off after some number of years teaching difficult students in schools in low-income neighborhoods. The arrangement works for my sister because she would be teaching anyway, though as a young female teacher the rowdy students seem like they would be a greater challenge for her, and now she’s also getting sizable debts forgiven. She hasn’t complained once yet, so perhaps things are well.

I don’t know the name of the program she’s participating in but there are several public service programs that offer the same benefits. If you’re in one of these fields, you’ll want research these more as you could get some of your loans forgiven. I don’t know if the pay for these jobs is adjusted accordingly though.

Public Service Loan Forgiveness Program

The Public Service Loan Forgiveness Program is the biggest of the loan forgiveness plans. It offers total loan forgiveness on Stafford, Grad PLUS and associated consolidation loans in the Direct Loan program if you work in a “qualified public service job” for at least 10 years and continue to make payments during that span. Ten years seems like an awfully long time. The standard payment structure on Stafford Loans is equal payments over ten years! However, typical consolidation repayment lengths are often thirty years and consolidation is always a good idea.

A qualified public service job is often determined by the employer, rather than the role you play. If your employer is a nonprofit, tax-exempt 501(c)(3) organization, you’re eligible. If it’s the federal, state, local, or tribal government, you’re eligible. Finally, if you’re in a full-time Americorp position, you’re eligible. If you don’t meet any of those, you can still qualify if your employer is a non-profit type entity that is engaged in public service but is not a political organization, religious organization, or a labor union. Rules are slated to be finalized by the Department of Education in November.


The TEACH (Teacher Education Assistance for College and Higher Education) Grant is a grant worth up to $4,000 a year if the student agrees to teach at least four years in the next eight in a “high-need” field in elementary or secondary school that serves low-income students. It’s a new program and you need to apply with your school’s financial aid office. If you’ve already graduated, unfortunately you can’t apply for this particular grant.

If you are out of school, thus ineligible for the TEACH Grant, consider asking your school district’s administration to see if they are covered under The National Defense Education Act. Under that Act, if you become a full-time teacher in an elementary or secondary school that serves students from low-income families, you can get some of your Perkins loans forgiven. It’s 15% of your loan for the first and second years, 20% for the third and fourth years, and 30% for the fifth. My sister may be in this program.

Volunteer Work

Those two programs have been getting most of the press lately but there are several other programs available. Here are some of the other options:

  • AmeriCorps: Receive $7400 in stipends and $4725 towards your loans for 12 months of service.
  • PeaceCorp: You can get deferment of your student loans and partial cancellation of Perkins Loans, 15% per year of service up to 70%.
  • Volunteers in Service to America (VISTA): $4725 for 1700 hours of service.

In addition to the programs mentioned here, there are many more specific programs.

Additional resources:

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2 Responses to “Student Loan Forgiveness Programs”

  1. finaidgirl says:

    Please use caution when pursuing a TEACH “grant”! There are very strict qualifications to really receive it as free money, more than just teaching in a “high need” school. If for any reason the person does not complete the requirements at any time, the entire “grant” will automatically turn into an unsubsidezed stafford LOAN, and interest dating back to the original disbursement date will be added on. So if you took out a $4000 TEACH grant each year of a four year undergrad career and for whatever reason do not teach, you suddenly have a $16,000 loan to pay off, plus interest! I think the program is a terrible idea – If someone with TEACH “grants” realized during their first year of teaching they didn’t want to teach but forced themselves to complete the four years as required, I don’t think they’d be a very good teacher. This isn’t a grant, it’s a loan in disguise. I love the idea of recruiting more and better teachers, but this is NOT the way to do it. See more here:

  2. saladdin says:

    I was a VISTA. The $4725 I received was taxable so take that into account. There is a strong lobbying push to change this but I think as of now it is still taxable.

    VISTA’s also receive a living stipend which was in the $8k range with health insurance. I lean left so I like these programs, if anyone wants some inside info about the VISTA program feel free.


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