February 2nd, 2010 
Elisheva Wiriaatmadja First of all, although Obama endorses student loan forgiveness, I have not found any programs that would completely forgive any student loan immediately. The programs that Obama was talking about allows any remaining balance of your student loan to be forgiven after 20 years. If you are a public service worker, your remaining balance will be forgiven after 10 years. This seems a little bit unrealistic. Not everybody can work as a public service worker for 10 years to have their student loan forgiven after that.
If you are a teacher, there is a teacher loan forgiveness program for FFEL loans and Direct Loans. However, not all teachers are eligible. Those who qualify are full-time teachers who have been working as a teacher for 5 consecutive academic years in an elementary or secondary school which the US Department of Education designates as “low-income” schools.
If you are enlisted in the military with a degree, there is a program to have your student loans forgiven. This also applies to Coast Guard Reserves. More information here.
If the options above doesn’t suit you, another option is to look into the Income Based Repayment (IBR) program. Obama proposes to have student loans repayment plan capped at 10% of their income after living allowances. Currently it is capped at 15% of your income. You may not have your student loan forgiven right away but this will help you reduce your monthly payment.
However, this income-based repayment is only available for students with federal Stafford, Grad Plus, and Perkins loans. Private lenders such as Sallie Mae or Chase are not included in the plan. To read more about the Income Based Repayment program, click here. If you want to find out what your monthly payment would be under Obama’s new income based repayment plan, go here and use this calculator.
The income based repayment program is more effective for newer loans. Although it does not matter how long ago the loans were issued, choosing this repayment option will start the clock all over again. If you are a public service worker and have been working as one for 8 years, under the new Obama student loan forgiveness program, it will take you only 2 more years until the remaining balance will be forgiven. How ever, if you switch to income-based repayment now, the clock will be reset and start over again and you will have to wait for another 10 years as a public service worker to be able to be forgiven. elMost federal student loans are eligible for income-based repayment, no matter how long ago they were issued. The only exception to this rule is if you were previously in an income-contingent payment program.
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I would just like to know why big corps can get free money to sit in a LA spa such as AIG did and abused the free money, but the small needs a helping hand paying off students loans and he’s considered a bum? No way man,,, what goes for the big guys should go for the small guys as well. I think it’s great they are making efforts to help people out with student loans. And the way they are calulated is also a rip off, they already assume your having the loan for so many years then tack that on to the bill so when you are paying off your loans your basically just paying on interest,,,, barely touching principal. There loan sharks taking advantage of loaning out money just like the housing problem.
again, why do the big corps get to go bellyunder, relieve all their debt to just start up another company? Now we have tons of company’s doing basically what enron did but just a little bit more conservatively to make it legal.
What about the ones like my wife. She has all these loans from getting her teaching degree, this is year 3 of no job. How do they expect you to pay off your loans when the job you went to school for is no longer available? She would gladly pay the full term of her loan if she was lucky enough to have taught 5 years. I’m starting to think in this economy, spending money on so called “higher education” is a joke.
I read this post holding my breath. My husband has a huge student loan from medical school that is over 20 years old. We have been paying minimal amount, which is all we can afford, and the principle never goes down. It looks like it will be with us to the grave. It seems to unfair. I’m going to show him this post to see if there is something here we can do. Thank you very much.
If there is no good economic case to be made for your education, so that you need to take out a loan that your future career cannot support, then you need to scale back your expectations (i.e., go to a different school, work more, etc). Like the mortgage mess, be informed as to what your future debts will be, and live within your expected means. Live is hard – don’t make it harder on yourself!
For those that have Private loans taken out, you will slave to the grave with them. Create a business where you can have control of your money because they will try to garnish it. You are smart, many people that have come to this country with no English, no papers, can get a house and create work for themselves. Tell Sallie Mae to go screw themselves and that you don’t care about credit anymore. This country will go into hyperinflation anyways and loans such as these will be wiped out.
i have had a student loan for 24 years i have been paying on them for 3 yeaRS ON A ROUTINE NOW CAN I GET MY LOAN FORGIVEN
Another important issue that you should address relates to health insurance. Once you turn eighteen and leave home, it is unlikely that you will be covered by your parents health insurance policy. If you need to find your own coverage, do so well in advance of leaving home. There are some insurers who specialize in providing plans to young people.
The summer before starting your studies should be spent in a productive way. There can be the temptation to sit back and relax, but by doing so you may not be prepared mentally for when your enrollment day comes around. Try and spend the time leading up to beginning your course in a positive fashion, for example you could take up part time work or devote your energy to a voluntary project. It can also be an opportunity to travel and see some of the world before your responsibilities begin.
Think about how much money you will need to attend the program of your choice. Explore whether or not there are any scholarships that you can apply for. Never underestimate the cost of attending college, a grant or scholarship can make a real difference.
On a final note, when learning how to prepare for college, you should not overlook the importance of gathering together the material and equipment that you will need. Find out what books you will require, as well as any other items. As long as you start preparing well in advance, the transition to your new life should not be so difficult.
I agree with James. (Well yes his comment was the only one I read because it was short) While I only had my student loan for 10 years I’m also happy it will be forgiven:D
First of all whoever EDH is a joke.If everyone lived in their means, we would not be as educated and determined. because everyone would be mediocre. Some of the top wealthy people today came from no education to just a little education. When people are not motivated to push themselves to do better there really is not a need to be educated @ all. So don’t try to tell someone they can’t be a doctor,lawyer or singer because they don’t have money to finance it, because they need to live in there means is bologna.
On another note it is different when people from other countries can come to america and open there own businesses and get education because they work together as a family helping out. There families help out and there race tends to not be against each other striving to do better, Where you have america we are @ the bottom for education and everything. America is more laid back then other countries.
If your student loans are putting you @ a financial strain try to see if you can get a hardship deferment.
That way it will cut you some slack until you get back to a point where you can manage.
I believe that all teachers should be forgiven their student loans, and that those additional factors should be cancelled. Also, for other public service workers, that period of ten years should be decreased. Ten years is really too much!
The only programs available for student forgiveness at this time are for lawyers, doctors/nurses, teachers with very limited guidelines and if you are none of the above, than you are practically forced into a position to serve the military or governing forces that advocate the system that is crushing you and causing these problems to begin with. View “acceptable” solutions by our government here: http://www.myloansconsolidated.com/2010/06/28/over-100000-of-student-loan-forgiveness-who-offers-them/
All self-serving to the government. You’re either forced to be put into the military (peace-corps included) or can be offered “payment by the military”. First of all, how & why does the military have an overabundance of money? The origin seems to be the same as who I’m trying to pay back to begin with (Bank $ = War $). It’s a viscous cycle that will continue to squeeze every penny out of us until we find a legitimate solution. As for those, such as myself that has miraculously found some way of making minimum monthly payments, on time like a ‘responsible citizen’… more than 50% of these payments are being put towards interest (to the bank) and not to the principal balance (money actually owed)… Creating an endless flow of debt for far longer than necessary. Can we even create a solution that allows us to be free?
I went to school so I wouldn,t have to struggle and live a hafway decent life. Now I am bombarded with a student loan that I honestly cannot pay. Tell me how to pay on a bill that accumulates interest on a daily basis? Student loans were not meant for anyone to really pay them off. I have been unemployed for over 4 years off and on, since obtaining my degree. Silly me I thought I was improving my situation but instead led me back to the poor house. When I become employed the money I make then will go to pay on my student loans as well as any income tax returns. I will never get what they call ahead. I will up my economic status from poor to working poor. And thats what I went to school for.
Hopefully… my sister is drowning in debt, this would be a lifesaver and a half for her, among my many friends who took out loans for their education.
Ok,so in January 2009 I had been at my job for 4 years & took a $2.00 per hr paycut along with having my health insurance cancelled. I decided to go to school b/c I was tired of living paycheck to paycheck, no savings, no retirement & my job isn’t one that will be in business long enought to retire from anyway. I thought to myself.. “what careers will ALWAYS be in demand? Medical and Criminal Justice” (I’ve been in the medical field & knew I didn’t want to go that direction). I knew my loans would add up to approx. $40,000 but figured since I wanted to go into Probation & that jobs starts at $35K a year it’s worth 1 year’s salary for a 25 year career, health insurance, and a retirement. Well, after 3 years of school, $45,000 in student loans, Florida cut their Criminal Justice budgetby approx. $371 million. So now I have $45K in student loans, am still at the same job (6 1/2 years now) & STILL making the same amount I was making when I started 6 1/2 years ago, still with no health insurance. I can’t find a job in my field & there are 4 Probation Officer positions in my area that I’m not eligible to apply for b/c now they are only accepting those that are already certified… I can only imagine this is b/c the budget cuts don’t allow for them to send you for your certification anymore. This economy is ridiculous… All our lives it is DRILLED into our heads that we need to get a good education so we can have a decent job making more than minimum wage & for what?? To end up with thousands in student loans & still not be able to get a job. Now I’m left with an extra monthly payment but the same income as before I started school. It’s crap!!!!