Stafford Loan Forgiveness
Stafford Loan Forgiveness is a student loan forgiveness program for people who meet certain requirements. If you don't qualify for federal loan forgiveness, consolidating your student loans can help ease your repayment. Consolidation can stretch the repayment term from 10 years to a maximum of 30 years, making the monthly impact on your cash flow much lower. Read more about Student Loan Consolidation.
Circumstances for Federal Stafford Loan ForgivenessUnder certain circumstances, the federal government will cancel all or part of an educational loan. This practice is called "loan forgiveness". To qualify for Federal loan forgiveness, you must:
- Perform volunteer work
- qualify for public service loan forgiveness
- Perform military service
- Teach or practice medicine in certain types of communities
- Meet other criteria specified by the forgiveness program
Stafford Loan Forgiveness for Volunteer WorkThese volunteer organizations offer federal Stafford loan forgiveness:
AmeriCorps: Serve for 12 months and receive up to $7,400 in stipends plus $4,725 to be used towards your loan. Call 1-800-942-2677.
Peace Corps: Volunteers may apply for deferment of Stafford, Perkins and consolidation loans and partial cancellation of Perkins Loans (15% for each year of service). Volunteers make a real difference in the lives of real people with two years of service in more than 70 developing countries. Contact the Peace Corps at 1111 20th St., NW, Washington, DC 20526 or call 1-800-424-8580 or 1-202-692-1845.
Volunteers in Service to America (VISTA): Volunteer with private, non-profit groups that help eradicate hunger, homelessness, poverty and illiteracy. Provide 1700 hours of service and receive $4725. Call 1-800-942-2677 or 1-202-606-5000.
Military Stafford Loan ForgivenessStudents who are in the Army National Guard may be eligible for their Student Loan Repayment Program, which offers up to $10,000. (Note, the military and veterans' associations provide many scholarships and tuition assistance programs. See the section on Military Aid for details.) This practice is comparable for federal Stafford loan forgiveness.
Teaching Stafford Loan ForgivenessStudents who become full-time teachers in an elementary or secondary school that serves students from low-income families can have a portion of their Perkins Loan forgiven under The National Defense Education Act. This program forgives 15% of your loan for the first and second years of teaching service, 20% for the third and fourth and 30% for the fifth. Contact your school district's administration to see which schools are eligible for federal loan forgiveness.
Students who majored in education and teach in Mississippi may be eligible for the William Winter Teacher Scholar Loan. This program forgives one year of your loan in exchange for one year of service (it forgives two years of your loan if you teach in a shortage area). Contact the Mississippi Office of State Student Financial Aid, 3825 Ridgewood Rd., Jackson, MS 39211-6453; 1-601-982-6663.
Stafford Loan Forgiveness for Legal and Medical StudiesMany law schools forgive law school loans of students who serve in public interest or non-profit positions. Contact the National Association for Public Interest Law (1666 Connecticut Ave., Suite 424, Washington, DC, 20009; 1-202-466-3686).
Similarly, groups like the National Health Service Corps offer medical school loan forgiveness programs to physicians who agree to practice for a set number of years in areas that lack adequate medical care (including remote and/or economically depressed regions). If you're a California resident, contact the Office of Statewide Health Planning and Development (State Loan Repayment Program, Primary Care Resources and Community Development Division, 1600 Ninth St., Room 440, Sacramento, CA 95814; 1-916-654-1833), or a similar agency in your state.
Many hospitals and private healthcare facilities use loan forgiveness to recruit occupational and physical therapists. Contact the American Physical Therapy Association (1111 North Fairfax St., Alexandria, VA 22314-1488; 1-800-999-2782) or the American Occupational Therapy Association (P.O. Box 31220, 47200 Montgomery Lane, Bethesda, MD 20824-1220; 1-301-652-2682)
Other Paths to Federal Loan ForgivenessStudents who complete a bachelor's degree at Baker University's College of Arts and Sciences may be eligible for the school's loan forgiveness program. Contact Baker University, P.O. Box 65, Baldwin City, KS 66006-0065; 1-913-594-6451.
Students who receive the Michael Murphy Loan to study law enforcement, law, probation and parole, penology, or other related fields are eligible to work off one-fifth per year as a State Trooper (or related law enforcement official) in Alaska. Contact the Alaska State Troopers, Director's Office Scholarship Fund, 5700 East Tudor Rd., Anchorage, AK 99507; 1-907-269-5511.
Maryland state and local government employees who earn less than $40,000 gross annually may be eligible for a loan assistance/repayment program to study law, nursing, physical and occupational therapy, social work and education. Contact the Maryland State Scholarship Administration, 16 Francis St., Annapolis, MD 21401; 1-410-974-2971 x146.
Perkins loans can be cancelled for full-time service as a teacher in a designated elementary or secondary school serving students from low-income families, special education teacher (includes teaching children with disabilities in a public or other nonprofit elementary or secondary school), qualified professional provider of early intervention services for the disabled, teacher of math, science, foreign languages, bilingual education, or other fields designated as teacher shortage areas, employee of a public or non-profit child or family service agency providing services to high-risk children and their families from low-income communities, nurse or medical technician, law enforcement or corrections officer, staff member in the educational component of a Head Start Program, service as a Vista or Peace Corps Volunteer and service in the Armed Forces (up to 50% in areas of hostilities or imminent danger).
See also the US Department of Education's pages on Cancellation/Deferment Options for Teachers and Cancellation for Childcare Providers at www.ed.gov.
Circumstances and Conditions for Loan ForgivenessIf you have taken out a loan to help pay for your education, all or part of it may be cancelled for several reasons. You may qualify for total or partial cancellation if:
- The school closed within 90 days of your enrollment and they were unable to finish their program of study.
- The school did not properly qualify your status before they began studies.
- You did not receive a refund that was due to you.
- Your signature was forged.
- The school did not properly evaluate your ability to benefit from the coursework before beginning studies.
- You become totally and permanently disabled.
- If you or the dependent for whom the loan was borrowed, dies.
- Your loan is discharged due to bankruptcy. (Typically, student loans cannot be discharged in a bankruptcy.) Consult your legal counsel regarding your particular situation.
- Provided poor training, had unqualified instructors, or inadequate equipment
- Did not provide job placement or other services that it promised; or
- Engaged in fraudulent activities (other than falsely certifying the loan)
- If you believe you are eligible for loan forgiveness, contact the holder of your loan.