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12-29-2012 01:26 AM
I'm not sure if anyone here is experienced or knowledgable about this specific issue, but my undergraduate student loans are all through the DOE (federal Stafford loans) -- both subsidized and unsubsidized. My balance is about $25k. I'm going into teaching science, which qualifies for $17,500 in loan forgiveness. However, it requires 5 years of employment at a low-income school, as defined by the federal government's standards.
That aside, assuming I do land a job at one of these schools... am I able to apply for loan forgiveness in my first year of teaching? I know it says it requires 5 years, but I hope to have paid off my loans by then. If I can't, and I do pay ALL of my loans off by then, do I get a $17,500 credit later? How does it work?
I just don't want to end up hanging onto these loans for five years, with small, minimum payments. I'd like to have my loans gone in my first couple of years in a full time job.
If anyone could shed a light on these issues, I'd greatly appreciate it - thanks!
12-29-2012 05:19 AM
You can not apply until you meet all the requirements, including 5 years as a teacher.
Also, the program will only forgive student loans you currently owe. This means you don't get a refund for any payments made. If the loans are already paid off in 5 years, then there is no benefit to the program.
12-29-2012 10:24 AM
That's what I was worried about., but thank you for the info.
12-29-2012 07:16 PM
Different situation....but some similarities...
I qualified for student loan repayment by the federal government for being a nurse practitioner and working in an underserved area. We have to give a 2-yr commitment for $60k in loan payment. I'm from a rural midwestern state, so I had no problem finding employment at one of the qualified facilities. Didn't have to move. In fact, I see the majority of my patients through telehealth from my own home.
I graduated in May 2010, and...hard as it was...I made only the minimum payments on my loans, even though I could easily have paid ahead. It bothers me to carry debt. The day before Christmas the feds deposited $60,000 into my checking account (paid off all my remaining balances). I was SO very glad at that point that I hadn't gotten all gung ho and paid those loans off faster.
I would seriously think about paying the very minimum that you have to until that loan forgiveness comes through. I was glad I had the patience to do so.
12-29-2012 10:00 PM
Thank you for your response -- good to know. I'm fortunate enough that my student loans are from an in-state, public 4-year school and thus the balance will be just under 25k. Since the repayment I will qualify for is 17,500, I may exceed that in 5 years of minimum payments. You said they deposited it into your checking account, so could I keep the remaining balance in my personal checking account if it exceeds the balance of my student loans by then? Just trying to figure out how it may work.
Thanks again for sharing your situation.
12-30-2012 09:48 AM
In my case there was about $1,200 extra because I had been making minimum payments after I graduated and the grace period finished. They asked for my balances, and those (with interest) came to close to $59,000. I was allowed to keep the $1,200, but I have no idea whether or not it would be the same for the teacher loan forgiveness.
There must be some resource where you could find this out. In my case, there was a Facebook page for the loan program. The site had a lot of active users. I was able to get a lot of my questions answered there.
My loans were also for a state school. Some were undergrad and some were grad. I hadn't intended to take any loans for school because my husband and I were both working and we could have afforded it on our own. It was my grown children who encouraged me (because I was in a healthcare profession). They were certain I'd get the loans paid back, and they were correct. I believe it all works out fairly because I am certain I get less salary for practicing on the prairie. The loan repayment is a way to keep some of us here or to draw new providers. We have a lot of employees in our system who are here strictly for the loan repayment. We get $60k for the 1st 2 years, Another $40 or $60k for the next 2 years, and then repayment of the entire loan amount after 5 years. Many of our employees get hundreds of thousands of dollars of loans repaid by the time they are done and move on...and some never move on. They stay. This program is for many different healthcare-related professions (psychologists, pharmacists, etc.). Some of these sites couldn't be competitive without this loan repayment program.
Is there a way you can qualify for a lower payment with income based repayment? That could leave some left over for forgiveness.
01-01-2013 05:55 PM
I haven't yet looked into the repayment process, and I'm not sure what my minimum amount would be. If I do pay the minimum, I hope it's low enough so that I can follow the same journey (more or less) that you did, and have them reimburse me on the remaining balance of the loans -- as much as it pains me to hold onto that debt for 5 years. It all depends on whether there are job openings for me to fill nearby this summer.
Thanks for the information!