Student loans can be forgiven

[MelissaB]

if you work in public service job for 10 years. These jobs include:

among other positions, government, military service, public safety and law enforcement (police and fire), public health, public education, public early childhood education, public child care, social work in a public child or family service agency, public services for individuals with disabilities or the elderly, public interest legal services (including prosecutors, public defenders and legal advocacy in low-income communities), public librarians, school librarians and other school-based services, and employees of tax exempt 501©(3) organizations. Full-time faculty at tribal colleges and universities, as well as faculty teaching in high-need areas, also qualify.

http://creditboards.com/forums/index.php?showtopic=315934

You have to do the paperwork and work in one of these jobs for 10 years, but the loan will be forgiven (whether you work as a teacher or a janitor in a school and many other things).

What many people do is consolidate their loan and make the min. payment during this time.

I posted this in response to another thread (http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x712682 ) because I was afraid the info would get lost in the thread and I thought some other people might could use the info.

Make sure you read the entire post at the link above. Also, here's another helpful link from Credit Boards about student loans: http://creditboards.com/forums/index.php?showforum=19

CB is a great forum, but read before you post. They will NOT spoon feed you.

[tekisui]

1. This is what I am banking on. I want to go into public servce anyway,

so it will be a win/win.

[bluetex]

17. Wouldn't it be more honorable...

to repay the loan? Instead of saddling our future generations with your debt?

After all....student loans are given in good faith, with the expectation your education will provide you with an income which allows you to repay what you borrowed.

[Name removed]

19. Deleted message

Message removed by moderator. Click here to review the message board rules.

[MelissaB]

20. O...M...G....! How about "public service jobs" pay enough to pay back student loans.

How about millionaires pay their fair share of taxes? I can think many "honorable" things, but I'm not going to judge people without walking a mile in their shoes first.

Shit happens and comes in a lot of different forms.

Several teachers I know used this program.

BTW, welcome to DU.

[Nordmadr]

23. That is a valid point but I think the intent is sort

of to provide a benefit for, and an ecouragement for, public service. It requires you actively make 120 payments before you can use it.

[EstimatedProphet]

25. No, it wouldn't

This isn't defaulting on the loan. This isn't saddling anyone with the debt either. This is an incentive to go into government service.

[tekisui]

27. Not at all. Thanks for asking.

[fishwax]

29. it's honorable to work in public service n/t

[Dappleganger]

30. How is it any less "honorable" than getting a military GI bill?

This is perfectly legal and is done to encourage better folks to sign up for public service.

But I see you don't get that. :eyes:

[proud2BlibKansan]

34. The profession is what is honorable

I chose teaching and have, for 30 years now, been paid less than most other college degreed professions. When I was in college, I was persuaded to take out a forgivable student loan package, similar to the one described in the OP, because I was entering a profession where my service was worth enough to the community that my loans would be forgiven. It was a trade off for a higher salaried job. That is exactly how the loan was sold to me 40 years ago.

I was then able to have 10% of my loan balance forgiven every year I taught, 20% for every year I taught in a low income neighborhood. It was the only way I could afford to go to college, as my parents (my dad was a teacher) were unable to afford to pay my tuition.

So no, not all college degrees lead to a profession that provides you with an income that allows you to repay what you borrowed. I deliberately chose my profession, with the expectation that a trade off for the lower salary was loan forgiveness if I stayed in the profession at least 10 years.

[Robb]

2. Big note: any forgiven debt becomes taxable income.

Still a good deal, depending on how much debt you carry. But not an entirely free lunch. :hi:

[MelissaB]

3. I have a friend with over $100,000 in loans because he defaulted and the interest

keep adding up. This is his way out if he chooses to take it. As you know, defaulting ruins your credit score and he's been living out of the country and underground for years. If he wants a bank account or home in the US, this is what he'll have to do.

It's not a free lunch, but it's a way out for some people.

[proud2BlibKansan]

35. Really? I didn't have to declare mine.

[CreekDog]

39. because that poster is wrong

although quite confident nontheless. :D

[Liberal_Stalwart71]

44. I didn't have to either. n/t

[CreekDog]

38. Please don't give wrong tax advice:

My student loan was cancelled; will this result in taxable income?
In some cases, yes. Your student loan cancellation will not result in taxable income if you agreed to a loan provision requiring you to work in a certain profession for a specified period of time, and you fulfilled this obligation.

Are there other conditions I should know about to exclude the cancellation of student debt?
Yes, your student loan must have been made by:

(a) the federal government, or a state or local government or subdivision;

(b) a tax-exempt public benefit corporation which has control of a state, county or municipal hospital where the employees are considered public employees; or

(c) a school which has a program to encourage students to work in underserved occupations or areas, and has an agreement with one of the above to fund the program, under the direction of a governmental unit or a charitable or educational organization.

http://www.irs.gov/individuals/article/0,,id=179414,00.html

and your point that *all* forgiven debt is taxable --i think you just made that one up. there are exceptions, the one I posted from IRS is just one of them.

[jtown1123]

40. You're right. It's always best to contact a lawyer or CPA.

[Coyote_Bandit]

4. The terms of my student loans

required that the balance be paid in full in 10 years.

More of my money went toward paying off those loans than went toward rent, utilities and groceries combined - and I was not able to put any $$$ aside into savings.

This wasn't an option then. Wish it had been...

[CrownPrinceBandar]

5. This was one of the deciding factors for me choosing nursing.....

In relative terms, my education is not going to set me back a WHOLE lot, but this will help me greatly.

[Maine_Nurse]

6. They key to this is...

initially opting for Income Based Repayment or one of the other reduced/extended payment schedules up front. Depending on your loan load and other factors, you can cut your monthly payment by a considerable amount even in you make in excess of $40k per year.

[mimitabby]

7. wow, thanks for posting

this might just help my son!

[Luciferous]

8. Yeah, but it only helps if you can find a public service job!

[exboyfil]

9. Folks on this board may not view it a s problem

but I worked the calculator for someone who is like a $40K teacher, and after borrowing a certain amount it does not matter how much more you borrow - your payments will be the same. I am not entirely sure that is the kind of incentive we want to structure in this law. Go for the PhD at a public university and teach at at a public school - the pay back will be so much better than getting caught in the post doc slave hell. Many people pursue education and the college environment because they like it. Kicking the can down the road all the way to a PhD on the student loan forgiveness plan seems somewhat attractive.

Also why is it more virtuous to be a public sector worker than a wage slave for a corporation? As far as public sector work I agree with the motto - show me the money. Don't rely on promises that can be later taken away. The same thought applies to corporations. When my old employer went to strictly defined contribution instead of defined benefit I was happy (just wished it had been in place the previous 4 years I was with them). Going forward I would strongly advise unions to get their money upfront.

What is going to happen a few years down the road once individuals figure out the math on this loan forgiveness and exploit it, future loan dollars will dry up and we will be back to fighting about taking this benefit away etc.

[kiva]

10. Even if you don't qualify for forgiveness,

Income Based Repayment can be a lifesaver. It is only for federal student loans, but it made a huge difference for my situation.

[Nordmadr]

11. I spent 4 years in the military before going to school, and

have worked for County government for 11 years. I need to go check this out.

[Nordmadr]

12. Just started reading this, and it already doesn't make much sense.

"The borrower must have made 120 payments as part of the Direct Loan program in order to obtain this benefit. Only payments made on or after October 1, 2007 count toward the required 120 monthly payments".

120 monthly payments after 2007? So it seems no one is eligible until 2017. So someone such as myself, depsite paying on my loans for almost 12 years now is SOL. Oh well. By 2017 my loan will be paid off.

[MelissaB]

21. I think the program started in 2007

and you can refinance or consolidate your loans and pay the min for the next 10 years. You have to fill out the paperwork first, though.

This probably won't benefit those who don't have a lot in outstanding loans, but I'm not sure.

[Nordmadr]

26. I efficiently consolidated my loans right after getting out of

school. Effectively locking myself into a much higher interest rate than most people can get now. Like I said though, mine will be paid off in another few years anyway, before I can take advantage of it. I have passed this on to my high school biology teaching wife though.

[tekisui]

28. And the 120 payments must be while in the public sector.

[Generic Other]

13. If your school district stubbornly refuses to acknowledge

the % of poor kids in the district, you cannot have loans forgiven.

[MelissaB]

14. That's another program completely.

[proud2BlibKansan]

36. What district does that?

It's required by federal law. If you are aware of a district refusing to acknowledge their % of low income kids, you should turn the district in. Call your congress reps.

[Jkid]

15. There are two conditions

First, is that if you get a public service job. As those types of jobs in my observation are difficult to get. Two, you will greatly benefit if you have a large student loan to pay off.

[NillaWafers]

16. Thanks for this, Melissa. n/t

[MelissaB]

22. You're welcome!

:hi:

Glad to share the info.

[Liberal_Stalwart71]

18. I work for the federal government and this is an incentive for me to stay here. I've already been

here at the agency for 6 years. FOUR MORE and I'm "forgiven."

[WolverineDG]

42. that's not how it works, unfortunately

the 10 years doesn't start until you sign up, & you're put on a 10 year pay out plan anyway, so in the end, ZERO debt is forgiven, since you will have already paid it all off.

dg

[Liberal_Stalwart71]

43. That, of course, depends on how much you owe. Trust me, I owe a HUGE debt.

There would be no way that I could pay nearly $200,000 in 10 years. It would have taken me the rest of my life to pay off, and then some.

In the meantime, the way it works for me is that I continue to make payments, on time, for the next few years. Whatever remains of the loans after that is forgiven.

[EstimatedProphet]

24. I'm waiting for my 10 year

But until then, the bill is killing me!

[jtown1123]

31. This is an excellent program but, where are the jobs? These jobs are HIGHLY competitive

and only a few will be able to take advantage of the wonderful forgiveness. Best of luck!

[MelissaB]

32. Evening kick

Night all
:hi:

[intheflow]

33. This is my game plan and why I got a job in a library.

Well, this debt forgiveness plan and the fact I get to play with books AND will be able to try for my MLIS when the $90k I owe for my useless masters in a another field gets paid off.

[LiberalEsto]

37. Not private loans

Private student loans can't even be discharged by death.

[WolverineDG]

41. Actually, they put you on a 10 year payout plan

I had a friend call & get information on this & what they offered was to put her on a 10 year pay-out, which would have doubled what she was currently paying. So your loans aren't forgiven; you have to pay on them for 10 years, through one particular company, at the rate they require. You don't get credit for any payments you made prior to registering with this company & since you have to pay out your loans in 10 years, nothing is forgiven. It's all bull shit.

dg

[Liberal_Stalwart71]

45. That is NOT true. It depends on how much you owe. For those who may not owe that much

in loans, this program may not be feasible, since in 10 years, they pay it off, anyway.

Howver, for people like me--and there are MANY of us--this program will be a lifesaver.

Note that during the 10-year period, you're STILL paying on the loans. You are obligated to continue to pay the loans. Whatever is remaining after that 10-year period is forgiven.

Of course the stipulation is that you remain at the job, in the same position, for 10 years. You pay on your loans, on time, without fail. As long as you continue the payment--ON TIME--and don't leave the job, you qualify for th program.

Again, for those who are lucky enough not to owe large loans, this program may not be the best option for them.

[WolverineDG]

46. I was considering it, as was my friend

but when we sat down & did the math, we found out it's a 10 year pay out, with nothing left over to "forgive." And since you can only go through one company & get no credit for any time you've already spent in public service AND paying down your loans, it's nothing but a scam dressed up as a "benefit."

dg