More and more at GetOutOfDebt.org we are getting questions about how to get your student loans eliminated, forgiven, or discharged if you are in or served in the military.
It is absurdly ironic that members of the military can go into harm’s way, fight in combat and yet return home only to struggle to escape the invisible bondage of student loan debt.
However, there are some real options that can help you do this, but like the military, there are rules to follow and hoops to jump through.
Public Service Loan Forgiveness Program
One overlooked program is the Public Service Loan Forgiveness Program. Under this program members of the military that have been employed by the military or a qualifying public service job for the last ten years may have their federal student loans FULLY discharged.
Public service qualifying occupations include:
- Emergency management,
- Military service,
- Public safety,
- Law enforcement,
- Public interest law services,
- Early childhood education (including licensed or regulated childcare, Head Start, and state-funded pre-kindergarten),
- Public service for individuals with disabilities and the elderly,
- Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations),
- Public education,
- Public library services, and
- School library or other school-based services.
You need to be employed in these position at least full-time, which is considered to be at least 30 hours a week or what the employer considers to be full-time.
The benefit of this program is it allows you to discharge your debt after it has been consolidated for a low payment.
The way the program works is that after making 120 monthly and on-time consolidated and reduced payments you remaining balance will be forgiven. – (Source: Public Student Loan Forgiveness Program Questions and Answers)
Not all student loans are eligible for consolidation. Private student loans are excluded.
Direct Loan payments that qualify include:
- The Income Based Repayment (IBR) Plan;
- The Income Contingent Repayment (ICR) Plan;
- The Standard Repayment Plan, with a 10-year repayment period; and
- Any other Direct Loan repayment plan, but only payments that are at least equal to the monthly payment amount that would have been paid under the Standard Repayment Plan with a 10-year repayment period may be counted toward the required 120 monthly payments. (February 3, 2010)
And you may actually be able to have zero dollar loan payments count towards your required 120 payments. If you qualify for a zero monthly payment under the Income Based Repayment or Income Contingent Repayment programs then those payments, or lack thereof, will actually count. Pretty cool, huh?
National Defense Student Loan Discharge
If you helped to pay for college with a National Defense Student Loan it may be partially discharged.
Recipients of a National Direct Student Loan and Perkins Loan may receive partial cancellation of their loan for their service in the United States Armed Forces if his/her military service was for a full year in a hostile fire/imminent danger pay area.
If you believe that you may qualify for cancellation of your loan(s) due to your military service as described above, you should send a copy of your DD214 (discharge form) and letter of explanation to the agency servicing your loan.
This article was contributed by GetOutOfDebt.org, a site that provides free debt consolidation help and debt relief advice for people looking for answers.
Image: jamescollins, via Flickr.com