When I first heard about the Public Service Loan Forgiveness (PSLF) program that cancels student loandebt after 10 years for nonprofit workers, I wasn’t that excited. My thinking was that many student loans are on a 10 or 15 year repayment schedule and the savings wouldn’t be that substantial.
I changed my tune big time when I learned about a second program called Income-Based Repayment (IBR) that works in tandem with public service loan forgiveness. Designed to assist low income/high debt student borrowers, IBR lets people making AmeriCorps/VISTA/grassroots nonprofit-level wages make student loan payments as small as 0-$5 per month (based on income) and those payments count toward the 10 years needed for borrowers to get their larger debt forgiven.
The reason I write this now is that the Income Based Repayment program begins next month. If you are interested, first learn more about it, then search for it on your lender’s website and apply for the program online.
Finaid. org offers a really great calculator that shows how much you might save (or not) using these programs versus a standard loan repayment program. Even if you’re income is higher than average for the nonprofit field, the program could offer substantial savings.
I also prepared a two-page draft document on the information most relevant to members serving in AmeriCorps or VISTA. Like I said, this is a draft document and I will be revising and simplifying it as my understanding of these programs evolves.
You can also take a look at this post about the College Cost Reduction and Access Act that offers some basic facts and resources.
My son has a loan with Sallie Mae with a very high interest rate. Because he had no credit to speak of, my husband co-signed on the loan for him. I’m wondering if this would effect my son qualifying for the Income Based Repayment Program. We are not looking for debt forgiveness, just some relief on the high interest rate. We are not able to refinance the loan at this point without it effecting our own credit, and our son can’t refinance himself, a) without credit and b) while he has his father as a co-signer on the loan.
Any suggestions? Thanks ~ LeAnn
Sounds like he might qualify. You can learn more on how to apply at the Sallie Mae website at http://www.salliemae.com/after_graduation/manage_your_loans/repaying-student-loans/starting_repayment/income-based-repayment.htm
If that link won’t work, go to salliemae.com and search for IBR
I am the mother of Darian Kaminsky who is in so much student loan debt I have no idea how much. She graduated Florida Atlantic several years ago; carrying a full load at the same time as working a full time job. She had a problem with student teaching (failed) and has not been certified in elementary education although she worked as a substitute in Florida’s public schools for years. For the last three years she has worked in Blacksburg, VA High School as an aide with special needs children. She has always gotten not much more than minimum wage for her efforts. She is dedicated, and is now enrolled in a program at Radford University for a Master’s in a Special Needs program. I believe that her wages have been garnished for a long time. Can she qualify for debt forgiveness and, if so, when? Please help her out of this morass if you can. Thank you. Shirley Kaminsky
Hi, Shirley, have Darian call her lender and ask to apply for Income-Based Repayment. That could help her out. She might also qualify for the Public Service Loan Forgiveness program and have her loans wiped away after 10 years of work with special needs children and stead loan payments. You can learn more here: http://www.finaid.org/loans/publicservice.phtml