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Paying Off Your Student Loans with Forgiveness Programs

by Lucy Lazarony

Paying Off Your Student Loans with Forgiveness Programs

Looking for some help with your massive student loan debt? Why not roll up your sleeves and do some good? By volunteering or choosing to work in service-oriented professional jobs in lower income communities, you could cancel a huge chunk of your federal student loans. You could knock off thousands and thousands of dollars of student loan debt after just a couple of years of service. Who knew doing some good could be so incredibly good for your bottom line? Want to see exactly how much student loan debt you are carrying and find out how it is impacting your credit score? Use’s Free Credit Report Card tool and find out now.

Loan forgiveness programs are available to everyone from Peace Corps and AmeriCorps volunteers to teachers, nurses, doctors, and other young professionals serving communities in need. Professionals choosing to work jobs in communities in need may take home lower-paying salaries, but they’ll also get some serious help paying their student loans.

Here’s a roundup of the loan forgiveness programs and volunteer programs available to recent grads and young professionals:

Nursing Education Loan Repayment Program

This program repays up to 60 percent of student loans for registered nurses who agree to work full-time (32 hours or more each week) for two years in a non-profit facility in need of nurses. Nurses that choose to work a third year have the opportunity to repay an additional 25 percent of their student loans.

Repaying as much as 85 percent of student loan debt after 3 years is some deal. For more information, visit the website of the Health Resources and Services Administration.

National Health Service Corps

Doctors, nurse practitioners, physician assistants, dentists, dental hygienists and mental health professionals including psychologists, social workers, and marriage and family therapists can wipe out a big chunk of their education debt by choosing to work for two years in an under-served community.

In exchange for two years of full-time employment, up to $25,000 in student loans will be repaid each year. Further loan repayment is available if you choose to serve beyond the two-year contract. One-year amendments are available with up to $35,000 available in loan repayments.

Healthcare professionals with extra-heavy student debt burdens could pay down as much as $50,000 in loan debt in just two years and as much as $85,000 of loan debt in three years. Talk about a great opportunity.

Loan forgiveness program for teachers

Teachers who are willing to make a five-year commitment to a school in need can get some much-needed help with their student loans. The richest rewards are reserved for science, math, and special education teachers.

Science and math teachers who work in low-income high schools may be able to cancel as much as $17,500 of their federal Stafford loans. This money gets eliminated from a teacher’s loan balance after he or she completes five years of teaching at a designated low-income school.

Special education teachers who work in designated low-income schools for five years may be eligible for as much as $17,500 in loan forgiveness for their federal Stafford loans.

Other full-time teachers working in a designated low-income elementary or high school for five years may be able to cancel as much as $5,000 of their federal Stafford loans.

For more information on teacher loan forgiveness programs, visit the U.S. Department of Education’s website.

The College Cost Reduction and Access Act of 2007 created a new loan forgiveness program for public service employees. This program requires quite a commitment – 10 years working as a public service professional. But the payoff – the cancellation of all remaining federal direct loans after 10 years of service — may be just the incentive a heavily-indebted college grad needs to choose a lower-paying, service-oriented career path.

Eligible public service jobs include everything from emergency management, public health and safety and law enforcement to social work, child care, library sciences, public interest law services, and jobs serving people with disabilities and the elderly.

To be eligible for this program, you must make 10 years of consecutive, on-time repayments of your federal direct loans. This program also includes federal direct consolidation loans, so it would be possible to consolidate federal Stafford loans into the direct loan program and therefore be eligible for the cancellation of your remaining loan debt after 10 years of service. Keep in mind that the standard repayment period for federal student loans is 10 years. If you choose standard repayment for your student loans and keep up with your payments, your student loans will be paid in full in 10 years. You won’t qualify for loan forgiveness because you’ll have no remaining debt left to forgive! Only grads that are eligible for reduced student loan payments, because of very high debt levels or consistently low salaries, would be eligible for this loan forgiveness program. To qualify, they would still need to make 10 years of on-time payments through an income-based or income-contingent repayment plan and work full-time for 10 years in a public-service job.

Loan forgiveness for volunteer programs

Peace Corps volunteers with Perkins loans can cancel as much as 70 percent of their debt after four years of service. Peace Corps volunteers who complete a two-year term can wipe out 30 percent of their Perkins loans’ balance. Another 20 percent can be cancelled upon completion of a third and fourth years of service. Federal student loan payments may also be deferred while serving in the Peace Corps.

Members of AmeriCorps receive education awards of $4,725 for each year of service. These awards can be applied to student loans or future education expenses. And 78 colleges and universities across the country match AmeriCorps education awards for their students. So if you continue your education after your AmeriCorps service you could have as much as $9,450 available for your tuition!

To find out how much student loan debt you are carrying and to see the impact on your credit score, use’s Credit Report Card tool. It’s completely free and updated every month, so you can track your progress as you pay down your student loans.

  • mike howard

    How can a nurse work fulltime sufficiently take care of their family and do 32 additional 32 hours a week?

    • Gerri Detweiler

      It’s not 32 hours on top of a regular work week. It’s simply that you don’t qualify if you only work in nursing part-time.

  • Julissa

    I have a question, I am enrolled at school to obtain a BA in Social Work, I then want to go for my Master’s. Problem is school is becoming way too expensive. I heard about this program and wanted to know if I would be eligible.

  • Gerri Detweiler

    Do you have federal student loans? If so I suggest you check out this student loan forgiveness chart which summarizes options. If you can’t get loan forgiveness working specifically as a nurse it sounds like you could be eligible for income-based repayment (if you qualify).

  • Teresa Mc Daniel

    I am 59 and cannot find any full time work that pays more than $11.00 an hour. I am in debt for 70 grand for an MBA from University of Phoenix that doesn’t hold water.

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  • Meet Our Expert

    lucy_lazarony GravatarLucy Lazarony is a freelance personal finance writer. Her articles have been featured on Bankrate, MoneyRates, MSN Money, and The National Endowment for Financial Education. Prior to freelancing, she worked as a staff writer for Bankrate for seven years. She earned a bachelor's degree in journalism from the University of Florida and spent a summer as an international intern at Richmond, The American International University in London. She lives in South Florida.
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