Student Loan Forgiveness… Is it Real?

by Redeeming Riches on November 6, 2014

student-loan-forgivenessStudent Loan Forgiveness..Is it Real?

You may have student loans you must repay after borrowing money to get through college. The thought of that debt can be a bit scary! Many students start looking into student loan forgiveness. While there are programs out there offered, it can be very difficult to qualify for them. The bad news is that most students won’t qualify.

What is Student Loan Forgiveness?

A student loan forgiveness program allows part of your remaining loan debt or all of the remaining loan debt to be wiped away. In exchange, you agree to use your career to work in a particular area that is needed. Typically, this is in a type of field that helps people in low income areas.

For example, offering to work as a doctor or nurse in a poor community for 2 years may qualify you for student loan forgiveness. Teaching and social work are also common types of career paths that may qualify an individual for this type of loan forgiveness relating to student loans.

Qualifications

The qualifications for student loan forgiveness depend on the type of career path you have selected. It also depends on the state you live in. Some volunteer organizations such as Peace Corps also have programs. It is a good idea to see what you may be eligible for. Make sure you read all of the details about how to apply, qualifications, and what you agree to uphold on your end in exchange for the student loan debt to be forgiven.

It is important to note that you may have a tax liability owed on the amount of student loan debt that is forgiven. It will depend on the type of program you qualify for. If you have to pay taxes on it, this can increase the amount of tax you owe to the IRS.

Consolidation

Definitely look into student loan forgiveness programs to see if you qualify. If you do, that is wonderful news! You can benefit from not having to repay those funds you borrowed for college. If you don’t qualify, the reality is that you do have to pay back that money. Consolidation can be the best bet for you to consider.

This allows you to have only one student loan payment. All of the loans you have are rolled into one. This can be easier on your budget than paying several student loans each month. Consolidation can also help to lower the overall monthly payment. Try to pay more each month than you need to though in order to pay it off in less time.

Before you consolidate student loans, make sure you are getting a great deal. Make a list of all the student loans you have, their balances, and the current rate of interest. Use a calculation tool for free online. Enter this information to see what the overall savings will be on your student loans when you consolidate at the interest rate being offered to you.

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