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Loan Forgiveness Programs

By Elisa Kronish

June 05, 2007

Are your student loans piling up? Depending on your future plans, you may be able to find relief. Loan forgiveness programs can help by canceling some, or all, of you debt in exchange for some type of public service.

Low-income School Programs

There are several federal loan forgiveness programs designed for students who become full-time teachers in elementary or secondary schools that serve low-income communities. For example, Perkins Loan borrowers can have up to 100 percent of their loan canceled over a five-year period — 15 percent for the first and second years of teaching, 20 percent for the third and fourth, and 30 percent for the fifth.

Federal Stafford Loan borrowers after October 1, 1998, can cancel up to $5,000 if they work for five consecutive years in an approved school. Certain math, science and special education teachers may be eligible for up to $17,500 in loan forgiveness. Contact your state education agency or school district to find out which schools are eligible.

Targeted Teaching Programs

Federal Perkins Loan borrowers can also have their loans canceled for full-time teaching in a subject area that has a shortage of teachers. This typically focuses on subjects such as science, foreign languages, special education and math. The portions forgiven are equal to the portions for the Perkins low-income school program. Check your local school system or state education agency to find out if your subject area has a teacher shortage.

Child-Care Provider Programs

Similar to the teacher program, you must work full-time as a child-care provider in a facility that serves low-income families in order to receive loan forgiveness. After meeting other qualifications, you might be eligible to have 100 percent of your Direct Loan and/or Federal Family Education Loan (FFEL) program loan forgiven. Assistance begins after two years consecutive employment. Look for the Child Care Provider Loan Forgiveness Application at your school’s financial aid office.


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