Volunteer Loan Forgiveness

If you are dealing with educational debt, there’s likely to be a great deal of frustration involved as you work at paying these debts off. If you feel overwhelmed and in need of relief; something to get away from the stress you feel, there’s good news in store for you.

The College Cost Reduction and Access Act of 2007 has established a new volunteer loan forgiveness program that helps those with outstanding student loans to handle them by performing services for a period of time.

What Does it Take to Qualify?

  • You Must Have Made 120 Payments: In order to qualify, you will need to have made at least 120 payments toward your loans prior to October 1st, 2007 the date on which the act was enacted. This does not include deferments or forbearance.
  • Payments Must Have Been Paid for a Federal Direct Loan Program: You must have consolidated to Direct Lending to take part in this program as this forgiveness program only applies to loans from this source.
  • The Person Seeking Forgiveness Must Have Been Employed in Public Service for Each of the 120 Payments: Jobs that fall under this heading include law enforcement, fire departments, emergency management, military service, nurses, nurse practitioner, healthcare practitioner and healthcare support, social work, public education, licensed and regulated childcare, public services to the disabled and elderly, public defenders, prosecuting attorneys, lower income legal advocacy, librarians, full time employees at tribal universities and colleges, and employees of 501(c) tax exempt organizations.
  • Eligible Loans: Federal Direct Consolidation Loans, Unsubsidized and Subsidized Stafford Loans and Federal Direct PLUS Loans. Loans which are in the FFEL program will need to be consolidated while those in the Federal Direct program will not. Perkins loans will be ineligible unless they’ve been consolidated in a Federal Direct Consolidation Loan. Parent PLUS loans have few options for forgiveness and so those with these loans are best advised to maintain their current payment plan. For some plans under these headings it’s wise to verify the eligibility of the loan for the educational forgiveness plan.

Organizations Which Take Part in the Forgiveness Program:

Below are a few examples of the many programs that offer forgiveness programs for those paying off student loans:

  • Peace Corp: Those who volunteer for this program are eligible to receive deferment of Consolidation, Stafford and Perkins Loans as well as partial cancellation (70% total or 15% for each year served) for Perkins Loans. The organization allows you to help people in 70 different locations all across the world. 1-800-424-8580 or 1-202-692-1854
  • AmeriCorps: With this organization you can earn $7400 in stipends and $4725 towards your loans for 12 months of service. 1-800-942-2677
  • VISTA (Volunteers in Service to America): Help private non –profit organizations to help fight homelessness, poverty, hunger and illiteracy. Your 1700 hours of service will help you earn $4725 toward your loans.
  • Army National Guard: Students who service in the Guard can be eligible for as much as $10,000 toward their loans via the Student Repayment Program. There are many veterans and military associations who offer tuition assistance programs and scholarships for students and so these organizations are a great resource for loan assistance and education programs.
  • Public School Teachers: Teachers in elementary schools and secondary schools which educate lower income children are given a 15% reduction in their loan for the first and second years, a 20% reduction for their third and fourth years, and a 30% reduction for their fifth year.

By participating in a volunteer loan forgiveness program you will be “doing well by doing good.”