How government, nonprofit workers can take advantage of student loan forgiveness
WINOOSKI, Vt. (WCAX) - Are you working towards paying off student loans? The U.S. Education Department last week announced it will lift some rules for public service loan forgiveness, making some 22,000 workers eligible for loan cancellation estimated at $1.7 billion.
“Many families are struggling with their ability to make payments,” said Scott Giles with the Vermont Student Assistance Corporation.
But he says the new changes to the federal program could make eligibility easier. He says the Public Service Loan Forgiveness program started in 2007 and is designed to help borrowers who serve their community. “This program was designed to say, ‘Hey, if you work for a nonprofit for 10 years we will forgive the rest of your debt,” Giles said.
Those working in federal, state, or local government, as well as those in the military, are eligible. According to the U.S Education Department, those with the proper employment must also meet other requirements including:
- Working full time for the agency or organization.
- Having direct loans (or consolidating federal loans into a direct loan)
- Must have made 120 qualifying payments on time.
Giles says changes to these guidelines should make it easier for people to become eligible, like allowing borrowers to participate if they paid more than they had to each month. “Let’s say you were denied because you had the wrong loan, they’re going to reconsider and reevaluate that for the payments you made in that loan program. If you made the wrong payment level, they’re going to give you credit for those payments,” he said.
Giles says people in the federal Family Education Loan program -- which was administered by VSAC -- are also eligible if they consolidate into this federal program. He says old payments would count towards forgiveness.
Jarom Wren, a Cornell graduate, says paying off his loans took nearly 10 years and offers this advice for others pushing towards the finish line. “Pay debt first. So, I could have paid it off faster and I wish I would have. So, for me, it’s less about trying to extend them as long as possible and paying them off as quickly as possible,” he said.
Copyright 2021 WCAX. All rights reserved.