We have previously written about the Department of Education’s Public Service Loan Forgiveness (PSLF) program, which allows some borrowers to have their balances forgiven. However, more can be said about what types of jobs qualify for PSLF and other similar programs.
The PSLF program allows former students and graduates to have their federal loans forgiven (only some types of federal loans) after making 120 timely monthly payments if they are working for non-profits or in public sector jobs. In addition, PSLF can be set up with income-based repayment programs so monthly payments are much more affordable. Hypothetically, graduates could have $50,000 in federal Direct loans, make $26,000 per year and make payments of under $95 for 120 months.
Among the jobs that qualify for PSLF are teachers, police officers, nonprofit workers and some health care positions.
Teachers: Public school teachers can receive a really sweet deal because they are eligible for PSLF and other state programs. For example, a graduate of the University of Missouri could teach at low-income schools in Texas and receive $2,500 in loan payment assistance. The federal Teacher Loan Forgiveness Program allows teachers at low-income schools to receive loan forgiveness of up to $17,500 on Direct loans.
Government Jobs: Workers employed at local, state or federal government jobs can apply for PSLF. This can include local, state and federal law enforcement agencies.
Healthcare Jobs: Health care workers in Missouri may be able to take advantage of the Health Professional State Loan Repayment program if they work in a qualified Health Professional Shortage Area. The Nurse Loan Repayment Program offers similar benefits. Kansas offers similar benefits under the Kansas State Loan Repayment Program.
Nonprofit Jobs: Some nonprofits may be eligible for the PSLF program. Nonprofits that qualify for PLSF are tax-exempt under Section 501(c)(3) of the IRS code.
Public Service Loan Forgiveness Has Major Benefits for Student Loan Borrowers
As we have already stated, PSLF can be used with income-based repayment options. However, these options without PSLF can presently result in being hit with a large income tax bill once completed. This is because forgiven student loan debt counts as income. Under the PSLF, that is not the case.
By working in careers eligible for PSLF, graduates can become unshackled by the weight of student loans after 10 years. We will continue offering updates on tips and tricks for easing the financial pain caused by student loans, so continue following our blog.
The Kansas City bankruptcy attorneys at The Sader Law Firm can inform graduates of helpful programs that help manage student loan debts.