Not all Student Loan Forgiveness programs have begun processing applicants for their forgiveness yet. In 2007, the College Cost Reduction and Access Act was passed to help those future graduates who may need financial relief from student loan debts. This program was designed to help those who have taken jobs and developed careers in the fields of public service and ten years later still find themselves with a large amount of debt compared to their income.
Public employees and other applicants will not qualify for Student Loan Forgiveness until October 2017 per the restrictions of the College Cost Reduction and Access Act. The basic rules for applicants are as follows:
1) 120 monthly payments must be made into the program before qualifying for the Public Service Loan Forgiveness.
2) Those payments must all be made while the borrower is employed in an eligible Public Service office or position.
3) Only those payments made after October 1, 2007 count toward the total of 120, hence the start date of October 2017 for applicants.
Unless the College Cost Reduction and Access Act is changed, this Public Service Loan Forgiveness program is limited to Federal Consolidated, Federal Stafford, Graduate PLUS and Parent PLUS loans. If any of these loans are defaulted, they cannot be considered for forgiveness under this program. Federal Nursing and other federal health student loans cannot be considered for this program unless they are first consolidated under a Direct Loan program.
Anyone currently holding a Federal Nursing, Federal Perkins or other federal health loan loses their deferment subsidy along with their remaining benefits if they choose to consolidate it. Ten years of qualified payments are required just like with the College Cost Reduction and Access Act (standard repayment) or the borrower can apply for an Income Based Repayment or Income Contingent Repayment plan. Student Debt Relief can assist the applicant in helping determine the best option for each applicant.
If a borrower has a Federal Family Education Loan Program loan (FFELP) that too can be considered under the College Cost Reduction and Access Act if it is first consolidated into a Direct Loan with the U.S. Department of Education. Before considering this option though, borrowers need to know that doing so eliminates any benefits available under that loan program. For example, if the borrower has a history of on-time payments, then the interest rate on the remaining balance may be able to be negotiated down. Any person considering converting their FFELP needs to be certain that they meet the 10 year, public service employment requirement. Student Debt Relief can help examine paperwork and help determine eligibility.
As noted above, forgiveness of these loans cannot be considered unless the individual has been employed in a public service career while making the qualified payments. Positions are determined as any position within a Federal, State or Local government agency. The exact nature of that employment does not figure into the requirements for approval under the College Cost Reduction and Access Act. The exact requirements are determined per Section 501 c (3) of the U.S. Tax Code.
It should also be noted that a non-profit (private) employer not covered by Section 501 c (3) may qualify as a public service organization as long as specified services are provided.
These include emergency management, law enforcement, military service, public health service, public interest law services, public service to the elderly and the disabled. Nearly every position within public education and public library services are included in this list as well. These organizations cannot be unions or a primarily political organization.
To finish meeting the Public Service Loan Forgiveness requirements, all employment must be full time. The definition for this is 30 hours per week. Time excluded from this includes the time spent in religious instruction, any type of worship service or any proselytizing.
This new Public Service Loan Forgiveness program, The College Cost Reduction and Access Act of 2007 will begin forgiving applicants in October 2017. It was developed to provide a source of relief to those individuals who decided upon a career path of public service rather than personal profit. The requirements will not be simple to qualify for and will definitely need assistance to navigate through them. Student Debt Relief can provide support to people now who are thinking ahead and wish to be ready. Four years go by quickly and once all of the basic rules are met, there is no reason to delay. Please visit us at www.studentdebtrelief.us to get the information you need.