Americans outstanding student loan debt now stands at over $1 trillion. Many students today are drowning in Student Loan debt; with average loan debt over $25K per student. Long after they have received their degrees, they are still trying to figure out how to pay off their student loans. However, for some students there is a ray of hope depending on their careers. For a few lucky graduates there are ways to have their student loans cancelled or discharge. Let’s discuss a few of these:
1. Teachers-If you have a new student loan and are teaching in a low-income area elementary or high school then after 5 years you could be eligible for loan cancellation. You can possibly have up to $17,500 in subsidized and unsubsidized loan cancelled.
2. Public Service-Serving in the military, police officers, and nurses all fall under this category. If you pay on your student loans continually for 10 years after 1 Oct 2007, you would be eligible to have the remaining balance forgiven. This works out well if you have large amounts of student loan debt. One thing to remember here though, if you put your student loans into deferment that time will not count towards the 10 years.
3. School Issues-If your school is closed down and you were not able to complete your degree program or they forged your name on loan documents you may be able to get those student loans partially or fully cancelled.
4. Disability-If you are totally and permanently disabled and pass the temporary three year discharge conditional period then you may have your loans discharged. Your doctor must send a statement in that validates your claim of having become disabled after you received the student loan. NOTE: If you are a military veteran and are determined to be unemployable due to a service connected condition from the VA you can have your student loans discharged. Provide copies of your VA rating statement with your application for discharge.
5. Bankruptcy-During a bankruptcy, if you can show that repaying your student loan debt would cause you additional financial hardship, they may be discharged. NOTE: This type of discharge is perhaps the most difficult to attain. Your financial records will be carefully scrutinized before your student loans will be discharged.
If you meet any of the above criterion and think you may be eligible for student loan forgiveness or cancellation please apply for it. You have worked hard to get where you are, don’t let student loan debt keep you from moving forward. There is a new bill in the U.S. House called the Student Loan Forgiveness Act of 2012. If the bill passes, it may be another avenue to free students from this “indentured servitude.”