Student Loan Forgiveness Plans

One of the greatest opportunities for stressed out college graduates is student Student loan forgiveness or loan repayment programs. These programs offer to eliminate some or all of your student loans in return for choosing certain careers, military service, and even volunteer work.

Such programs can eliminate anywhere from a few thousand dollars to over $100,000 of student loan debt. Ironically, many of these programs receive a relatively small number of applications indicating that many graduates are completely unaware of these opportunities. At the Loan Relief Center, we can show you your options and submit all the paperwork for you.

Loan Forgiveness vs. Loan Repayment

Student loan forgiveness programs are those backed by the Federal government and cover loans issued through Federal programs such as Stafford and Perkins student loans. When you participate in one of these programs, portions of your debt are literally erased from your lenders books. 
Student loan repayment programs, which are more widespread than forgiveness programs, may be used to eliminate any type of loan including private loans.

Taxability of Student Loan Repayment and Forgiveness

The amount eliminated under loan forgiveness or repayment programs may be considered taxable income in the year received. In other words, if you have $5,000 in loans forgiven next year, that may increase your taxable income in the eyes of the IRS by an equivalent amount. While thats never fun, it shouldt discourage you from using one of these programs since the benefit far outweighs the cost.

To avoid having your student loan forgiveness or employer repayments be subject to taxation, your student loan must specifically include provisions allowing it to be forgiven. These provisions must require you to work within certain professions, for certain employers, for a specified minimum amount of time.

Additionally, any loan repayments made under the National Health Services Corps (NHSC) Repayment Program or any state program eligible for funds from the Public Health Services Act are considered tax-free.

Loan Forgiveness Program for Teachers

The Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue in the teaching profession. Under this program, individuals who teach full time for five consecutive, complete academic years in certain elementary and secondary schools that serve low-income families and meet other qualifications may be eligible for forgiveness of up to a combined total of $17,500 in principal and interest on their FFEL and/or Direct Loan program loans. (Note: As of August 14, 2008, an otherwise eligible borrower may qualify for forgiveness if the borrower has provided qualifying teaching services at one or more locations that are operated by an educational service agency.) Please contact us for Eligibility Requirements


 

Eligible Loans


  • Subsidized Federal Stafford Loans
  • Direct Subsidized Loans
  • Subsidized Federal Consolidation Loans
  • Direct Subsidized Consolidation Loans
  • Federal Insured Student Loans
  • Guaranteed Student Loans
  • Unsubsidized and non-subsidized Federal Stafford Loans
  • Direct Unsubsidized Loans
  • Unsubsidized Federal Consolidation Loans
  • Direct Unsubsidized Consolidation Loans
  • Federal Plus Loans
  • Direct Plus Loans
  • Direct Plus Consolidation Loans
  • Federal Perkins Loans
  • National Direct Student Loans
  • National Defense Student Loans
  • Federal Supplemental Loans for Students
  • Parent Loans for Undergraduate Students
  • Auxiliary Loans to Assist Students
  • Health Professional Student Loans
  • Health Education Assistance Loans
  • Nursing Student Loans
  • Loans for Disadvantaged Students

Ineligible Loans


  • Loans made by the state or private lender and not guarenteed by the Federal Government
  • Primary Care Loans
  • Law Access Loans
  • Medical Assist Loans
  • PLATO Loans

Interest Rate:

The interest rate is a weighted average of all of the loans that are being consolidated, and will not exceed 8.25%.

Forgiveness Programs:

  • Public Service
  • Teachers
  • Military

Repayment Plans:

  • Standard: Make fixed monthly payments to pay loan off in 10 to 30 years. The minimum payment under this plan is $50
  • Graduated: Payments will begin at a lower amount and will gradually increase every two years to pay off the loan in full in 10 to 30 years.
  • Income Contingent: Monthly payments are based on your adjusted gross income as well as your spouse’s if you are married, your family size, and your loan balance. This amount is subject to change upon review of your situation on a yearly basis. If the loan is not repaid within 25 years, the remaining balance will be forgiven.
  • Income Based: Monthly payments are based on your adjusted gross income and family size. This amount is subject to change upon review of your situation on a yearly basis. If the loan is not repaid within 25 years, the remaining balance will be forgiven.
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Key Points

  • Money Back Guarantee!
  • Flexible student loan repayment plans, including plans based on income and family size
  • Deferment time renewed
  • Student Loan Forgiveness Programs
  • No minimum or maximum student loan balance to qualify
  • Change your new student loan repayment plan anytime you want as often as you would like
  • Get an additional .25% off of your interest rate for setting up automatic payments