Federal Student Loan Forgiveness

Eric, a graduate has not found a profitable employment, while repayment period for his educational loan has already begun. Unable to repay his dues in time he opts for Federal Student Loan Forgiveness/Cancellation. Some of his friends advised him to go for a Student Loan Consolidation, which consolidates all loans into a single liability and offers flexible repayment period. If Eric does not qualify for loan forgiveness, then he is left with only one option and that is consolidation. Consolidation can stretch the repayment term up to a maximum of 30 years.

Circumstances for Federal Student Loan Forgiveness / Cancellation

He is informed that the government might cancel the whole or part of his loan under the forgiveness program provided he qualifies for the same. For qualifying he must fulfill one of the following requirements

• Practice medicine in a certain environment:

  Practicing medicine in remote places resulting in waiver of loan amounts or deferment of federal loans

• Teach in certain types of communities:

  Teaching in certain elementary and secondary school at remote and backward places, teaching a particular subject enables waiver of partial or entire federal loan amount.

• Perform certain volunteer work:

  Serve AmeriCorps for 12 months and receive $7,400 towards stipend and $4,725 towards loan; Serving Peace Corps, volunteers can ask for deferment of federal loans and partial cancellation of Perkins Loan. Volunteering work with non profit groups helping in eradicating poverty, hunger and homelessness and receive $4,725 towards loan.

• Perform military service:

  Students in Army National Guard become eligible for the student repayment program plan, offering $10,000, similar to forgiveness program.

• Comply with other specified conditions required by the forgiveness program:

  Specified conditions include completing graduation in a particular university, engaging in full time service as a teacher, earning a specified amount and such other requirements as the case may be.