The challenge for those who are college-bound then becomes how to pay for school while you’re getting an education, and it often comes down to taking out federal student loans or private student loans in order to earn a degree. For many, this means being saddled with thousands of dollars in student loan debt before ever embarking on a career.
The good news is, however, that there are a number of student loan repayment and forgiveness options that can help reduce interest, lower student loan payments and even eliminate your debt entirely in certain situations.
There are a variety of plans available through the U.S. Department of Education that offer student loan forgiveness or a discharge of your loan balance as part of their program. These plans include:
Qualifying for one of these programs is the key to obtaining student loan forgiveness, but once you meet the requirements, you may be able to wipe out your student loan debt completely. That being said, here are some of the top benefits of obtaining loan forgiveness on federal student loans.
The first and most obvious advantage of applying for student loan forgiveness is having the remaining balance on your federal student loans eliminated once you meet a program’s requirements. Depending on the type of program you qualify for, this could mean partial or full forgiveness on your federal student loan balances after making on-time payments for 10 years or more, and/or fulfilling other program-specific conditions.
If you’re someone who is already considering a career in the Armed Forces, teaching, the public sector, healthcare or a wide range of other professions, there’s a chance you could serve in your ideal occupation and be rewarded for it. While you will ultimately have to take the steps necessary to earn student loan forgiveness under the specific requirements of your career choice and its accompanying program, potentially wiping out thousands in debt can be highly motivating when you consider that without forgiveness, you could be paying back your student loans for many years to come.
There are several student loan forgiveness programs that, when your loans are forgiven, will need to have the forgiven amount included on your next year’s taxes. In this case, it could mean showing a gain of thousands of dollars to the IRS, who considers this as taxable income on your yearly statement.
However, teachers and public sector employees, along with some other professions, may have an opportunity to have their student debt forgiven, without the added tax burden. Thus, when it comes to student debt relief, this option stands out as one of the premier benefits for those who are able to qualify for this type of loan forgiveness.
If you have questions about whether or not you’re eligible for student loan forgiveness, it’s best to speak with one of our student loan specialists at (800) 771-6358 to find out if you qualify. You can even fill out our online form to make the process even easier.
In the end, having your student loans forgiven is one step towards having more personal income available for saving for retirement, making big purchases like a home, or putting your salary towards other smart investments just as you did with your college degree.