It’s no secret that millions of Americans are dealing with student loan debt, and it’s likely many more will borrow money for college in the future. If you’re one of the many people overwhelmed by thousands of dollars in debt, you may be wondering about what options you have for paying off student loans.
One option that many people don’t know much about is student loan forgiveness and repayment. Jobs in a variety of industries offer loan forgiveness as an incentive, often to make up for a less-than-ideal job location or difficult working conditions or to reward selfless work such as teaching and public service. If you’re up for the challenge, then this may be the right method for you! In this article, we’ll outline just eight of the many careers that are ideal for paying off student loans.
#1: Public Service
For those wondering how to pay off student loans, one of the broadest student loan forgiveness programs available is the Public Service Loan Forgiveness (PSLF) Program. Unlike most of the other programs listed here, this program isn’t about the specific job you do, but about the employer you work for. If you work full-time under a qualifying employer, you can take advantage of this program.
Qualifying employers include government organizations, tax-exempt not-for-profit organizations, and not-for-profit organizations that provide qualifying public services. AmeriCorps and Peace Corps positions also qualify for PSLF. If you are a public school teacher, public librarian, law enforcement officer, or community health worker, you likely work for a qualifying employer. Even if you don’t see your profession on this brief list, you should still look into this program to pay off student loans due to its exceptionally broad nature.
If you work for a qualifying employer, the next step you should take is ensuring that your specific federal student loan qualifies for PSLF. Any loan received under the William D. Ford Federal Direct Loan Program qualifies. Other federal loans such as those received under the Federal Perkins Loan program and the Federal Family Education Loan program do not always qualify for PSLF. However, if you combine them into a Direct Consolidation Loan, they may become eligible for the program.
Once you’ve ensured that your employer and loans qualify for PSLF, you can begin the process towards receiving your loan forgiveness. This process is by no means quick, but it is fairly simple. You must make 120 monthly payments towards your loan under an income-driven repayment plan or the 10-year Standard Repayment Plan. It’s likely that you’re already making progress towards this goal, but it’s best to submit periodically the Employment Certification for Public Service Loan Forgiveness form just to make sure. Once you’ve made your 10 years’ worth of payments, all you have to do is submit the PSLF application, and the remaining balance on your loan will be forgiven.
If you’re a healthcare professional looking to pay off student loans and your employer or loans don’t qualify for PSLF, don’t worry! There are several other programs that can help you repay your medical school debt. Take a look at this section to see just a few examples of the programs available to you.
To meet the needs of underserved areas, the National Health Service Corps (NHSC) is offering up to $50,000 in loan forgiveness to health professionals willing to spend two years in a Health Professional Shortage Area (HPSA). Participants may apply to extend their service past the initial two years in order to pay off more of their student loan debt. Positions are available not only for primary care physicians, but also for dental care and mental health professionals.
There are also military programs that can help healthcare providers who are paying off student debt, such as the U.S. Navy Health Professions Loan Repayment Program (HPLRP) and the Army’s Active Duty Health Loan Repayment Program. One of the most appealing aspects of these programs is the large amounts of money they offer towards repaying your loans. These programs offer as much as $40,000 in loan repayment for one year of service, and most of them will allow you to participate in the program for multiple years. After just a few years in one of these military programs, you will have more than $100,000 of your debt paid off.
One more option you should look into for paying off student loans is state-specific programs. Most states have debt forgiveness and repayment programs for healthcare providers. However, the requirements of these programs and the amount of debt they repay varies greatly. One easy way to find out what your state offers is by checking the database on the Association of American Medical Colleges’ website. Your financial aid advisor may also have details for additional state-specific resources not listed on this database.
Outside of PSLF, teachers also have at least two other loan forgiveness programs that they may qualify for: the Teacher Loan Forgiveness Program, which can be applied to Subsidized Federal Stafford Loans, Unsubsidized Federal Stafford Loans, Direct Subsidized Loans, and Direct Subsidized Loans, as well as the Teacher Cancellation Program, which can be applied to Federal Perkins Loans. Other options may also be available to you depending on the state you teach in.
The Teacher Loan Forgiveness Program offers up to $17,500 in loan forgiveness to teachers who have served low-income areas for five consecutive academic years. If you are not sure whether your school is officially considered low-income, the US Department of Education’s Federal Student Aid website hosts an online database of schools and educational service agencies that qualify for this program. One thing that you should note when considering this program for paying off student loans is that the amount of loan forgiveness you can receive depends on multiple factors, such as when you began your service, what subject you teach, and if you are considered “highly qualified.” If you do not meet all of the requirements, you may only be able to receive $5,000 in loan forgiveness.
The Teacher Cancellation Program is similar in that it is for educators who teach in low-income schools. However, it is also open to teachers in higher income areas if they teach certain subjects or teach students with disabilities. Another major difference is that it only requires one year of full-time teaching to begin receiving loan cancellation rather than five. That said, only 15% of your loan (including interest) will be canceled if you only apply for one year. The amount increases to 30% for two years, 50% for three years, 70% for four years, and 100% for five years.
Not all states offer their own loan forgiveness program for teachers, but it’s worth looking into. Some programs, such as the Teach for Texas Loan Repayment Assistance Program, only offer smaller amounts like $2,500, for instance. However, other programs, such as the New York City Loan Forgiveness program, offer teachers as much as $24,000 to pay off student loans.
#4: Federal Government Work
Several federal government agencies, including all cabinet-level departments and several independent agencies, participate in the Federal Student Loan Repayment Program. This program can repay up to $60,000 in student loans, and several different federal loans qualify for the program. Examples of qualifying loans include Direct Loans and loans made or insured under the Public Health Service Act.
Since the main purpose of this program is to provide incentives to top-ranked employees and recruits, it is typically only available to individuals who are considered highly-qualified by the employing agency. Each agency has different definitions of “highly-qualified,” so you will need to do more research to find out your agency’s specific requirements. Common requirements include special training and a high GPA. It is also possible to be approved or denied based on factors outside of your control, such as the turnover rate for the position and the cost of recruiting someone else if you were to leave or turn down the position.
While the requirements for the program may be difficult to navigate, doing your research and applying for it is worth the effort. Agencies are allowed to give participating employees and recruits up to $10,000 in loan repayment for each year of work for up to six years. The program requires participants to work in their position for at least three years, so most people are able to repay at least between $20,000 and $30,000 of their debt, though it’s possible to double this amount if you continue to work in the needed position.
Law school can be costly, but as long as you’re willing to work in the public sector, it isn’t too hard to pay off student loans. Here, we’ll list just a few of the programs available to you.
If you work for the Department of Justice and have at least $10,000 in federal student loans, you may be eligible for the Attorney Student Loan Repayment Program (ASLRP). This program is part of an effort to recruit and retain lawyers, so participants are required to commit to a three-year service period with the Department of Justice. Unlike many of the programs listed in this article, the ASLRP is competitive. Not everyone who qualifies for the program will actually receive loan repayment. Applications for the program are opened to current employees every spring. If you are selected for ASLRP, you can receive up to $6,000 towards paying off student loans for each calendar year of service. Even after your three-year commitment period has ended, you may continue to work in the Department of Justice to gain additional assistance up to $60,000.
Another program to consider is the John R. Justice Student Loan Repayment Program (JRJ). This program is open to state and federal public defenders and state prosecutors who work full time for the state or local government as well as attorneys who provide supervision or training to these public defenders and state prosecutors. It is also open to federal defender attorneys who provide legal representation to indigent persons. Funds for JRJ are given to designated state agencies based on population, so each state is only able to give this benefit to a limited amount of attorneys. Priority is given to individuals who have the least ability to pay off student loans. Attorneys participating in this program can be awarded up to $10,000 in loan repayment per calendar year of service and can earn a maximum of $60,000 altogether.
You should also look into programs specific to your state or law school. The eligibility requirements and amounts vary, but if you’re willing to do the research, you may find that they’re great ways to pay off your debt if you are unable to get assistance from other types of programs. Many state and school programs are specifically reserved for low-income lawyers, and some offer as much as $65,000 in loan repayments.
While the armed forces have been briefly mentioned in other sections, they also offer repayment programs that are not specific to other industries such as healthcare. The biggest programs available to individuals serving in the military are offered by the Army and the Navy through the College Loan Repayment Program. The eligibility requirements differ slightly between branches, but each branch’s programs are still very similar.
The Army offers its Loan Repayment Program to highly qualified soldiers enlisted in critical Military Occupational Specialties (MOSs). MOSs include positions such as electronic warfare specialist, civil affairs specialist, and weapons sergeant. For active duty, Regular Army soldiers, the Army will repay one-third of the outstanding balance of the soldier’s loans for each year of service for a maximum of three years and a total repayment of up to $65,000. Since soldiers in this program are required to commit to at least three years of service, most participants are able to repay all or most of their student loan debt. This program is also available to active duty and drilling members of the Army Reserve and Army National Guard, but non-Regular Army soldiers only qualify to have one-sixth of their balance repaid each year.
The Navy’s Loan Repayment Program is similar to the Army’s program in the amount offered and structure of the payments. It offers up to $65,000 in loan repayment to sailors serving in their first enlistment. This repayment is divided into thirds, with one third of the sailor’s outstanding balance being paid after each year of service. All active Navy enlisted positions qualify for this program, which makes it a bit less restricted than the Army Program. If you want more information applying for this program to pay off student loans, you will need to contact a recruiter.
Like many of the other programs listed here, federal or state loans incurred for the purpose of education are generally the only loans that qualify for repayment. This includes Perkins Loans, Supplemental Loans for Students, Consolidated Loans, and Parents Loans for Undergraduate Students. A few loans from non-profit, private entities may qualify on a case-by-case basis. However, this is the exception to the rule, so you should check with your recruiter before counting on these programs to pay off student loans from other organizations.
#7: Automotive Aftermarket
While the automotive aftermarket industry does not offer as many loan forgiveness or repayment options as the others listed here, it is unique in that it is one of very few private-sector jobs that offers this benefit. Thanks to the Specialty Equipment Market Association (SEMA), you can receive $2,000 towards paying off your student loans if you work for a SEMA member company.
The requirements for this program are fairly straightforward. Along with being employed full-time at a SEMA member company, you must have completed your degree program at an accredited university, college, or trade program with a minimum GPA of 2.5. You must also have at least $2,000 in student loan debt. If you meet these requirements, all that’s left to do is fill out a simple application that includes a letter of recommendation, two short response essays, and your background information.
Most chosen applicants are given at least $2,000 to pay off their student loans, but one top applicant will be able to receive up to $5,000. While this may not be as much as public-sector jobs offer, it is still a great option for anyone in this industry who needs help repaying their student debt.
#8: Other Private-Sector Jobs
As we mentioned before, the vast majority of jobs that offer loan forgiveness and repayment programs are public sector jobs. However, this doesn’t necessarily mean you should give up hope! Even though there are few industry-wide programs, some individual companies have begun to offer this benefit to their employees.
Examples of companies that offer loan repayment include Chegg, Fidelity Investments, Martin Health Services, and Pricewaterhouse Coopers. The total amount of loan repayment offered to employees varies, but it typically ranges from $1,000 to $10,000 towards paying off student loans. If you haven’t already, check to make sure you aren’t missing out on any loan repayment benefits that your employer offers. It may also be worth looking for companies in your industry that provide this benefit the next time you are looking for a job.
Frequently Asked Questions on Loan Forgiveness and Repayment
Q: What is the difference between loan forgiveness and loan repayment?
A: In loan forgiveness, the party that issued the loan (in most cases, this is the U.S. government) reduces or eliminates the remaining balance on your loan. In loan repayment, the party offering the repayment program (this can either be the party that issued the loan or a third party) gives money to the loan holder to pay off your debt. Loan forgiveness and loan repayment are usually functionally identical.
Q: Is my loan forgiveness or repayment award taxable?
A: Whether or not your award is taxable depends on the program you received the award from. Most awards given by the federal government are not considered taxable income, but it is always a good idea to check and do the math on what will save you the most money when choosing what programs are right for you.
Last Words on Loan Forgiveness and Repayment
- Loan forgiveness and repayment can be great ways to pay off student loans. Many people brush this option off as too good to be true without doing much research into the available programs. Depending on the industry you work in, you may be able to use loan forgiveness to completely eliminate tens of thousands of dollars in debt, so it’s definitely worth looking into.
- Know what loans qualify. Most programs only cover certain types of loans, such as federal student loans. Make sure you know exactly what kind of loans you have taken out and be able to match them with a program’s list of qualifying loans. If you took out a private student loan instead of a federal student loan, it’s likely that your loans won’t qualify.
- Understand the drawbacks. As we mentioned before, many jobs offer this perk because they have a difficult time keeping the position filled. You’re essentially doing a job most people don’t want to do. This means you may have to work undesirable hours, move to a less-than-ideal location, or take on a rigorous workload. This isn’t always the case, but you shouldn’t necessarily assume that this will be easy money.
As long as you keep these things in mind, you should be able to find a loan forgiveness program that is right for you, start paying off student loans, and continue your journey to being student debt-free.