William D. Ford Direct Loan Program
(Obama Student Loan Forgiveness)
This program offers the most encompassing benefits and if often referred to as Obama Student Loan Forgiveness. By Consolidating loans into a William D. Ford Direct Loan and enrolling in an Income Driven Repayment (IDR) plan, loan holders qualify for forgiveness at the end of the term of their loan which is 20-25 years depending on their initial loan balance. There are multiple IDR repayment options that qualify for forgiveness under the William D. Ford program. Additionally, there is accelerated forgiveness available for specific borrowers depending on who their employer is. Employer status can reduce payments by as much as 15 years and dramatically increase the amount forgiven.
Public Service Forgiveness
Individuals may qualify for Public Service Forgiveness if they are employed by a qualifying employer. If so, forgiveness is accelerated by as much as 15 years offering a huge by eliminating loans tax free. This program clearly offers the most economic advantage. Keep in mind, it doesn’t matter what your job is, it only matters what organization pays you.
Total and Permanent Disability Forgiveness
Applicants may be eligible for Total and Permanent Disability on Federal Student loans they are not able to sustain gainful employment on an ongoing basis. Keep in mind that this must be a TOTAL disability as certified by a physician. This certification may be required over an extended period of time, by multiple physicians, before the Government will accept your application and discharge the loans. We have heard from clients that while this process is available, it may also be difficult and time consuming to accomplish.
Teacher Loan Forgiveness
Another option is through Teacher Loan Forgiveness. If you are a highly qualified teacher in a qualifying Public school district you will be eligible to qualify for forgiveness. While there is a limit to the amount of Teacher Forgiveness, a significant benefit is that it is available in as little as 5 years. If an individual has a higher loan balance than is allowed to be forgiven, they may also be able to then apply for Public Service Forgiveness whereby the remaining balance may be discharged at then end of 10 years.
Military College Loan Repayment Program
Individuals entering the military, or transferring from active to reserve status, may have accumulated Federal Student Loans prior to their service obligation. The Military College Loan Repayment Program is available to discharge student loans. The amount of this benefit varies for each military branch.