Wipe Out Student Loan Debt With This Trick
By Kemberley Washington
NEW YORK (MainStreet) -- Yes, graduating from college is great but student loans suck! However for many grads, this is becoming a common story. According to the Consumer Financial Protection Bureau (CFPB), student loan debt has risen to more than $1.2 trillion dollars, a more than 20% increase from the year 2011. Furthermore, student loan debt is rising at an alarming rate, only second to household mortgages.
Although the burden of student loan debt can be a bit overwhelming, there may be some relief in sight. The Department of Education offers the Public Service Loan Forgiveness (PSLF) program to individuals who qualify. The PSLF program allows for student loan forgiveness for borrowers who work in the area of public service full time.
Here are some helpful tips to determine if it would work for you:
1.) Consider your boss
"Any federal government, state government, local government, or tribal government entity is an eligible employer for the PSLF Program," says Christine Isett, spokesperson for the Department of Education. "This includes the U. S. military, public elementary and secondary schools, public colleges and universities, public child and family service agencies, and special governmental districts"
Tax exempt entities under section 501 (c)(3) of the Internal Revenue Code may also qualify for the program. In addition, private not for profits that offer public services may also qualify. To determine whether your employer qualifies, visit the Federal Student Aid website.
2.) Don't delay payments
The key to forgiveness is to make certain your payments are timely. According to the Department of Education, borrowers will be granted forgiveness if they make 120 qualifying payments while employed by qualified employers. Borrowers are required to make payments within 15 days of the due date, and the payment has to exceed or equal the required payment.
If a borrower has difficulty making payments, he should contact his servicer to review possible options. Periods of deferment or forbearance, which allow a borrower to cease making payments temporarily, are not qualifying payments for the purposes of PSLF. That being said, the 120 qualifying payments do not need to be consecutive. For example, if a borrower makes 10 qualifying payments, spends 6 months in an unemployment deferment, and then resumes employment with a qualifying employer and also resumes making payments, the borrower will still start at the eleventh qualifying payment when payments resume.