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| How to Cancel Part or All of Your Outstanding Student Loan(s) |
| Written by Lowell Fleming |
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Option #1 “Give it Back” For example, assume you take out a standard subsidized Direct Ford Loan for $1,913, at a fixed rate of 6.80%. The loan origination fee will run you $48, and the rebate will be $29. But, if return the entire loan within 120 days of the date of disbursement, then, you will neither be require to pay back the loan fee of $48, but you may also keep the interest rebate of $29. On another note, there are positive credit implications for doing something to this effect. Next, if you decide to return your loan you may either send it directly back to:
The other way you may return your loan money is through the Office of Billing and Payment Service’s Electronic Funds Transfer (EFT). Most likely, this is the same way you received the loan in the first place. However, if you picked up your check, then do not bother with the hassle of setting up an EFT, just write a personal check and send it off! Option #2 “Service”
Students who are in the Army National Guard may be eligible for their Student Loan Repayment Program, which offers up to $10,000 in grants. However, as the military and veterans' associations provide so many scholarships and tuition assistance programs, it is best to see the section on Military Aid.
The American Association of Medical Colleges (AAMC) maintains a database of state and other loan repayment programs for medical school students. If you are volunteering solely for the financial assistance, your probably better off just taking that first job straight out of college. However, depending upon your type and amount of outstanding student loans, you could potentially save thousands. Option #3 “Volunteer”
According to the Peace Corps rules pertaining to loan cancellation if you volunteer for the organization and you have outstanding Perkins loans your will be eligible for a partial cancellation. However, this is somewhat limited by comparison to other organizations because it does not cancel any non-Perkins loans. Nonetheless, fifteen percent of your Perkins loans can be cancelled upon the completion of each full year of service during your first two years of volunteering, and 20 percent can be cancelled upon completion of each of the third and fourth years. In other words, if you serve four full years your Perkins loans will be reduced 70%. This is certainly the most outstanding aspect of the Peace Corps loan cancellation program. If you choose this route: Your next step is to apply for cancellation at the end of each of the completed 12 months of consecutive service, which may be done in country, so remember to copies of all outstanding Perkins loan balances. Two very important things to keep in mind pertaining to your service in the Peace Corps:
Tip: There are actually much more extensive financial aid benefits, if you go to Graduate school, but are accepted to the Peace Corps preceding admittance to your Graduate School. For a listing of programs, fields of study, and how pursue their Graduate-Service Program go to: Peace Corps Graduate Benefits.
VISTA program volunteers serve private, nonprofit, public interest groups that work to eliminate poverty, through decreasing illiteracy rates, homelessness, and hunger. If you volunteer 1,700 hours of service, you will receive $4,725 toward your educational loans, whether they are private or government backed. Pay the difference in the programs benefits.
If you are looking to stay state side then Americorps is the best way in which you may give back to your country, and at the same time reduce your student loans by a significant amount. However, Americorps is not technically a cancellation program. Rather participants in Americorps, like those in VISTA, also receive an Education Award of $4,725 for a year of full-time service, and unlike the Peace Corps, it is prorated for part-time service. For more information: AmeriCorps. Option #4 “Employment” Until now, this article has spoken to the unemployed, but what if you’re already employed and have chosen a career path? Whether you are a lawyer or a nurse, a government employee or a teacher, you certainly know by now that your higher education—though getting you where you are today—most likely cost a fortune. As mentioned previously, the Peace Corps follows a strict and uniform policy regarding partial loan cancellation of a student’s Perkins loan(s). Indeed, by comparison to many other loan cancellation programs The Peace Corps loan cancellation program is much more limited, though that is not to say less rewarding, as this is determined on an individual basis. Nevertheless, loan forgiveness for many in the working world is potentially far more rewarding in providing student loan forgiveness. First, identify which group you're in. Second, determine which of the listed programs is most acceptable, and feasible to your situation. Remember, although, you may receive forgiveness of 100% of all outstanding student loans if you teach the right subject-matter, (e.g. chemistry), in the right location (e.g. Louisiana) you may find the environment too difficult to endure. Finally, follow the link provided to determine just how much of your outstanding student loans can be reduced.
First, fill out the Teacher Loan Forgiveness Form. Teachers serving in federally designated low-income areas are eligible for loan cancellation. Likewise, teachers providing their services where there currently exists a shortage in the
Yes, there are even loan cancellation programs for child care providers. View a complete list:
Most law schools forgive the loans of students who serve in public interest or non-profit positions. For more information, contact Equal Justice Works (formerly the National Association for Public Interest Law). The US Department of Health and Human Services offers loan forgiveness programs through: (If you're a California resident, contact the Office of Statewide Health Planning and Development)
Many hospitals and private healthcare facilities use loan forgiveness to recruit. Contact the American Physical Therapy Association or the American Occupational Therapy Association. Other loan repayment programs for medical school students include:
Depending upon which police department you choose to work for there are considerable benefits to be gained from a career in law enforcement. For example, “University employees [i.e., any staff level police officer] are eligible for tuition fee reduction at the University of California, presently amounting to approximately a 2/3 discount.” For more info see: UCB Police Benefits
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| Last Updated on Monday, 05 July 2010 01:28 |
area, may also cancel, if not at the least defer his or her student loans. For example, if you teach secondary math or science for five consecutive years you will receive a $17,500 cancellation of your Stafford Loans. If this seems desirable, your next step is to determine what constitutes a federally designated low-income or a subject-matter shortage area by clicking here: 