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 who have been employed by the military or a qualifying public service job for the last 10 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 child care, 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
** 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. You can use the online student loan consolidation calculator here.
The way the program works is that after making 120 monthly and on-time consolidated and reduced payments, your remaining balance will be forgiven.
Not all student loans are eligible for consolidation. Private student loans are excluded. Loans that are eligible to be consolidated can be found here.
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
** 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 toward 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?
For more information on this program, read this publication by the U.S. Department of Education.
National Defense Student Loan Discharge
The National Defense Student Loan Discharge program is available to some military members.
Federal law (34 CFR 674.59) says that service in a location that qualifies a military member for hostile-fire or imminent-danger pay can qualify for up to 50 percent of their loan being canceled if their military service ended before Aug. 14, 2008. For those whose service began on or after that date, they may have up to 100 percent of their loan forgiven.
This is only for Federal Perkins Loans. Under federal law, the authority for schools to make new Perkins Loans ended on Sept. 30, 2017. But if you have any old loans, it is worth your while to check this out. Perkins Loans were usually given by schools rather than banks.
A school must cancel up to 100% of the outstanding balance of a Perkins Loan for a full year of active duty. The borrower’s commanding officer must certify the borrower’s service dates. Active-duty service for less than a complete year or a fraction of a year beyond a complete year does not qualify. A complete year of service is 12 consecutive months.
Contact your lender for more information.
This article was contributed by GetOutOfDebt.org, a site that provides free debt consolidation help and debt relief advice for people looking for answers.
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Steve Rhode, a contributor for Credit.com, is an experienced and respected consumer debt expert who helps people for free with tips and advice on how to get out of debt through his site at GetOutOfDebt.org. For the right person, in the right situation, debt settlement can be the right solution. When it comes to getting out of debt, the real skill comes in matching the appropriate solution to the situation and the goals of the individual.