Lori Meadows
There are a variety of ways to get help paying off student loans. These include grants, scholarships, and loan forgiveness programs offered by federal and state governments, colleges and universities, hospitals, and private companies. Some companies offer student loan repayment assistance as part of their benefits package, and some national organizations offer loan repayment assistance for certain professions, such as teachers, medical personnel, lawyers, and military service members. Additionally, federal student loan programs may offer loan forgiveness or an IDR plan that bases your monthly payment on your income and family size.
| Characteristics | Values |
|---|---|
| Federal student loan programs | Loan forgiveness or full loan discharge |
| IDR plan | Monthly payment based on income and family size |
| PSLF | 100% of direct loans erased after 10 years of full-time work in the public sector |
| TPD discharge | For people with a disability that severely limits their ability to work |
| State grants | Availability varies by state |
| Career-based grants | For teachers, medical personnel, lawyers, veterinarians, etc. |
| Employer-based grants | Some companies offer grants, scholarships, and student loan forgiveness |
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What You'll Learn
Student loan forgiveness programs
Public Service Loan Forgiveness (PSLF)
PSLF is available to government and qualifying nonprofit employees with federal student loans. Eligible borrowers can have their remaining loan balance forgiven after making 120 qualifying loan payments on an IDR (income-driven repayment) plan and 10 years of full-time public service work. The IDR plan bases your monthly payment on your income and family size.
Teacher Loan Forgiveness
Teachers employed full time in low-income public schools may be eligible for Teacher Loan Forgiveness after working for five consecutive years. They can have up to $17,500 in federal direct or Stafford loans forgiven. To qualify, teachers must have taken out loans after October 1, 1998. Teachers can also qualify for PSLF or Perkins loan cancellation.
National Health Service Corps (NHSC)
The NHSC provides a grant to help doctors, dentists, nurse practitioners, mental health providers, and other healthcare professionals reduce their student loan debt. If you complete two years of full-time service in an area with limited healthcare availability, you could receive up to $50,000 toward your student loan debt.
Legal Services Corporation (LSC)
The LSC offers forgivable loans of up to $10,000 to help attorneys repay their law school debt. To qualify, you must have at least $75,000 in student debt and work full time with an LSC-approved grantee.
AmeriCorps
The Segal AmeriCorps Education Award is given to participants who complete a term of national service in an approved AmeriCorps program. This award can be used to repay qualified student loans and can also count toward PSLF.
These are just a few examples of student loan forgiveness programs. There are also state-specific and other federal programs that may be able to provide assistance, so be sure to research the options available in your area.
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Grants to pay off student loans
There are several grants available to help pay off student loans. These grants are offered by federal and state governments, as well as non-profit organisations. Many of these grants are tied to specific careers, such as teaching or healthcare, and may require a certain number of years of service in particular areas. For example, the National Health Service Corps (NHSC) provides grants to healthcare professionals who work full-time for two years in an area with limited healthcare availability. This grant can provide up to $50,000 towards student loan debt.
Similarly, the Teacher Loan Forgiveness Program (TLF) offers student loan forgiveness of up to $17,500 for teachers who work full-time for five consecutive academic years in certain elementary or secondary schools. The Public Service Loan Forgiveness (PSLF) program also offers loan forgiveness for those who work full-time in the public sector for ten years and make 120 qualifying monthly payments.
Some state-specific grants also exist. For instance, if you work as an attorney for the Department of Justice, you may be eligible for approximately $6,000 per year in student loan assistance, up to a lifetime maximum of $60,000. This grant is highly competitive and requires a commitment of three years of service, as well as a minimum of $10,000 in federal student loan debt.
Additionally, some companies, such as Aetna, Google, SoFi, and PwC, offer student loan repayment programs as part of their employee benefits. These programs typically match employee payments up to a certain amount annually, helping to reduce student loan debt.
It is important to note that the application processes for these grants may vary, and it is recommended to start researching grant opportunities well before graduation.
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Loan repayment plans
There are several loan repayment plans available to help with paying off student loans. The US Federal Student Aid program offers four types of federal student loan repayment plans. The best option for you will depend on your financial situation and goals.
The standard repayment plan is a fixed repayment plan that lasts for 10 years. This option is generally the best choice if you want to pay less in interest over time. You are automatically placed on this plan when you enter repayment. However, if you are having difficulty meeting the monthly payments, an income-driven repayment (IDR) plan may be a better option.
IDR plans base your monthly payment on your income and family size. There are four types of IDR plans: Graduated Repayment, Extended Repayment, the fixed version, and Income-Based Repayment. Graduated Repayment starts with lower monthly payments that increase every two years for a total of 10 years. Extended Repayment also starts with low payments that increase every two years, but the total repayment period is 25 years. The fixed version splits payment amounts evenly over 25 years. Income-Based Repayment sets monthly payments at between 10% and 20% of your discretionary income, with payments possibly being as low as $0 if you are unemployed or underemployed.
After repaying your loans under an IDR plan for 20 or 25 years, the remaining balance on your student loans may be forgiven. Additionally, if you work full-time for a government or not-for-profit organization, you may qualify for forgiveness of the entire remaining balance of your Direct Loans.
There are also other ways to receive help with repaying student loans, such as grants and loan forgiveness programs. Grants are available from federal and state government programs, as well as nonprofit organizations, and can be tailored to specific professions or locations. Loan forgiveness programs may also be available depending on your profession, where you work, and how long you have had your student loans.
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Loan discharge
There are several ways to get help with paying off student loans, including loan discharge. Loan discharge means that you are no longer legally required to repay your student loan. Here are some ways to discharge your student loan:
Public Service Loan Forgiveness (PSLF)
If you work full-time for a government or not-for-profit organization, you may qualify for PSLF. This means that 100% of your direct loans can be forgiven after 10 years of public sector work. You must also make 120 qualifying monthly payments under a qualifying repayment plan, such as an IDR plan. An IDR plan bases your monthly payment on your income and family size. The discharged balance under PSLF is not considered taxable income.
Total and Permanent Disability (TPD) Discharge
If you have a disability that severely limits your ability to work now and in the future, you may qualify for a TPD discharge. This can be a physical or mental disability. If you receive a TPD discharge, you are not required to repay your federal student loans or complete any grant service obligations. You will need to provide proof of your disability and may be subject to a post-discharge monitoring period.
Closed School Discharge
If your school closes while you are enrolled or soon after you withdraw, you may be eligible for a closed school discharge. This means that your federal student loan may be discharged if you meet certain requirements.
Borrower Defense to Repayment
Borrower defense to repayment is a legal ground for discharging federal Direct Loans. Borrowers can apply for borrower defense for specific reasons, such as if the school misrepresented information or breached a contract.
It's important to note that there may be other loan forgiveness or discharge options available, and it's worth checking with your loan servicer or a financial advisor to explore all your options. Additionally, there are grants and other forms of financial assistance offered by federal and state governments, as well as nonprofit organizations, that can help with student loan repayment. These opportunities often come with specific employment or service requirements.
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Employer repayment assistance
Employer student loan repayment programs can be a great way to get help with your student loans. These programs, offered by both government agencies and private employers, can provide up to $5,250 in student loan repayment assistance annually as a tax-free benefit for employees. It's important to note that this amount is usually a combined limit that includes any tuition assistance programs provided by the employer.
If your current employer doesn't offer student loan repayment benefits, you can consider looking for a new job with a company that does. Some employers that offer student loan repayment assistance include firms like Ally Financial, Chegg, Google, and Fidelity. Alternatively, you can talk to your human resources manager and suggest implementing such a program, highlighting the benefits it could bring to the company. For example, offering student loan repayment assistance can help attract, engage, and retain employees. Additionally, employers can provide this benefit tax-free, making it a cost-effective way to support their workforce.
When researching employers that offer student loan repayment assistance, it's important to consider the timeline requirements. Some companies may require you to be with them for a set period before you become eligible for this benefit. Additionally, different types of assistance may be available, such as signing bonuses, contributions tied to retirement savings, or the ability to trade unused vacation time for student loan repayment.
It's worth noting that certain careers may qualify you for loan repayment assistance programs offered by government agencies. For example, health professionals, public defenders, military members, and STEM workers may be eligible for government-sponsored repayment programs. These programs typically provide annual payments or a lump-sum payment after you've provided the required service and met the program's requirements.
In addition to employer-based repayment assistance, there are also various grants and loan forgiveness programs available to help with student loan repayment. These opportunities may be offered by federal and state governments, as well as nonprofit organizations, and are often tied to specific professions, work locations, or service commitments. For example, the National Health Service Corps offers a grant of up to $50,000 in student loan debt reduction for healthcare professionals who serve full-time for two years in areas with limited healthcare availability.
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Frequently asked questions
There are several ways to get help with student loan repayment, including grants, scholarships, and loan forgiveness programs. You can find these opportunities through federal and state government-funded programs, as well as nonprofit organizations. Additionally, some employers offer student loan repayment assistance as part of their benefits package.
The Public Service Loan Forgiveness (PSLF) program offers loan forgiveness for those who work full-time in the public sector for 10 years and make 120 qualifying monthly payments. The Teacher Loan Forgiveness Program (TLF) provides up to $17,500 in loan forgiveness for teachers who work full-time for five consecutive academic years in a low-income school.
Yes, individuals with a disability that severely limits their ability to work may qualify for a TPD discharge, which means they don't have to repay their federal student loans.
Yes, in some cases, local or state governments may offer student loan assistance if you move to a particular area or purchase property. You can visit your state agency's website to learn more about specific programs and requirements.
Yes, there are career-based grants and scholarships available for teachers, medical professionals, lawyers, veterinarians, and other specific careers. For example, the National Health Service Corps (NHSC) offers grants to healthcare providers who work in areas with limited healthcare availability.
