Understand Programs That Can Help Forgive Your Federal Stafford Student Loans

A reader recently wrote in with the following question about his student loans and forgiveness.

There are several instances where you may qualify for loan forgiveness of your federal Stafford Loan.

Teach in Lower Income Districts

If you took out a federal Stafford Loan on the first part of October 1998 or later, then you may be qualified to have a portion of your loan amount erased. People who have taught in school districts that are considered lower income can have their debt extinguished if they’ve worked in the school system for at least five years. Check with you lender for further details.

Child Care Providers – A Program That Helps With Educational Costs

People who have acquired a 2-year or 4-year early childhood degree can also have some of their debt forgiven and expunged. If you’ve worked at least a couple years in a childcare capacity for a facility in a lower income neighborhood and took out a Stafford loan after the 7th of October 1998, you may, in all likelihood, be an eligible candidate.

Features of the Child Care Provider Loan Forgiveness Program

Designed to create more jobs in the field of early childcare, the program stipulates that eligible borrowers can have 20% of the amount of their loan(s) forgiven when they work, as stated, for two years in a specific facility. In addition, eligible participants can erase 20% more off their loan amount if they work a third year, and another 30% each year up to five consecutive years of service.

Erasing Loan Debts In The Nursing Occupation

The NELRP or Nursing Education Loan Repayment Program is also a program that can erase any outstanding loan amounts for individuals in the field of nursing. Its primary purpose is to help alleviate nursing shortages in non-profit health facilities. Therefore, candidates must meet certain criteria.
Program Qualifications

By working in one of these facilities for a couple years full-time (32 hours), nurses can receive 60% of the loan balance. If they stay in a facility for three years, they can obtain another 25 percent of the borrowed amount. To be eligible for the program, you should be a nurse who has received a diploma, associate, bachelor or graduate degree in nursing from an accredited school and work in certain facilities on a full-time basis. U.S. citizenship is required or resident status must be proven.

Non-Profit Facilities Covered in the Program

Candidates for the program generally work in facilities where nurses are sought, such as hospitals, Federal healthcare centers, the Human Services Department, state and local health departments, nursing homes, hospices, skilled nursing facilities, health agencies designated for home care, and ambulatory surgery centers.
Favored Candidates

If you have completed your nursing education and owe 40% or more of your yearly income on your loan, plus work at specific facilities, such as critical access hospitals, rural health clinics, nursing homes, state or local public health agencies, or where the nursing shortages are the greatest, you will be given initial approval over other candidates.

Make Sure You Are Serious About Working as a Nurse

You can make application to NELRP on an annual basis at the start of February or March, with deadlines set in March or April. Remember, you must have completed two years of service at the above-noted facilities. Also, make sure you are dedicated to working as a nurse and follow through with respect to the guidelines mandated by the program if you don’t want to suffer significant repercussions financially.

If you are currently a nurse, teacher or childcare provider, who meets the above criteria, then you stand to gain financially by taking advantage of the above programs.