Student Loan ForgivenessStudent loan debt among college graduates is increasing at an alarming rate. In fact, it is increasing at such a fast pace that many student are contemplating not going to college and investing their money in the stock market rather than paying the exorbitant fees for a college education. That is an extreme example, but the fact that college tuitions have skyrocketed in the past decade cannot be denied.

Unfortunately, student who take out loans are not prepared to pay back their loans once they graduate. Many cannot find jobs that will provide them with income to repay their loans and many are simply under employed and saddled with loan debt that they just cannot pay. Because of this increasing problem Congress has enacted new legislation that will provide a route for students to take if they wish to apply for loan forgiveness.

First, student must take out loans through the Federal Stafford Loan Program. This is the loan program that is funded by the Federal Government to provide low costs loans to students. Students can receive either subsidized or unsubsidized student loans to qualify for forgiveness.

Second, a student must take their loans out through Direct Loans. Before 2009, schools had the option of dealing with Direct Loans, which is the Federal Government's lending authority, or going through a FFEL lender which is a private lending agency. After 2009, there is no longer an option so all new Stafford Loans are disbursed through Direct Loans. If you had Stafford Loans prior to 2009 then you can consolidate your loans into Direct Loans to qualify for the forgiveness option.

Third, you must be employed in the public service sector. The Department of Education mandates that in order to qualify for loan forgiveness an eligible borrower must be employed in a public service job in order to qualify for the loan forgiveness program. This means that if you are a Federal employee, a state employee, or you work for a non-profit agency you will qualify as a public service employee.

Lastly, you must make 10 years of consecutive payments. This is the kicker. The Federal Government will forgive the remaining balance on your Stafford Loans once you have made 10 years of on-time monthly payments. If you only have $10,000 or less in student loan debt you will never be able to take advantage of this forgiveness option. If you have a larger amount in student loans you have the option to apply for an extended repayment plan which will draw out the term on your loan, but allow you to make smaller monthly payments for the first 10 years. This will allow more of your loans to be forgiven.