Student loan debt can be a crushing weight on an individual's finances. According to an article from FinAid, a college finance information website, 65.6 percent of undergraduate degree earners finished school with student loan debt as of 2008, while 56 percent of those who earned graduate degrees completed their studies with student loan debt. Also, as of 2008, the average debt burden for bachelor's degree earners was $23,118, while the average for those with graduate degrees was $40,297. However, graduates with student debt problems have options through student debt relief programs.
National Service Forgiveness Programs
The federal government will forgive the student loan debt of college graduates who commit to serving in certain national volunteer service programs. College graduates can receive student debt forgiveness by volunteering in either the Peace Corps, Volunteers in Service to America (VISTA) or AmeriCorps programs, all of which help impoverished and underprivileged individuals and families overseas or in the United States.
Forgiveness Programs for Those Serving in Essential Professions
In addition to national service, students qualified to work in certain essential professions may also take advantages of federal student debt forgiveness programs. Individuals who serve in the Army National Guard can see some of their debts canceled, as can teachers who teach in a low-income K-12 school district. Additionally, certain law schools forgive the student debt of graduates who work in nonprofit or public interest positions. Also, several programs exist to forgive the student loan debt of doctors and nurses who practice medicine in low-income or remote areas.
Amounts - National Service
As of February 2011, those who complete one year of AmeriCorps or VISTA service earn $4,725 in student debt forgiveness, while the federal government will forgive 10 percent of the student debt of those serving in the Peace Corps per year of service; Peace Corps volunteers can see a maximum of 70 percent of their student loan debt canceled.
Amounts - Essential Professions
Those serving in the Army National Guard may find forgiveness for up to $10,000 in student loan debt (as of February 2011). Teachers in low-income areas can find forgiveness for up to 60 percent of their Perkins Loan debt. Individuals with debt from law or medical degrees may have some or all of their debt forgiven, depending on which service program in which they participate.
College Cost Reduction and Access Act of 2007
In 2007, Congress passed the College Cost Reduction p and Access Act of 2007, which allows experienced public service professionals to receive forgiveness for the remainder of their federal student loan debts. Specifically, the law allows individuals who have worked in public service full time and have made timely student loan payments for at least 10 years to have the remainder of their student debts erased. Individuals must have made a minimum of 120 federal Direct Loan payments to qualify for the program. Additionally, only payments from after October 1, 2007 count toward the 120 necessary to take advantage of the program.
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