Many of our readers will, like us, have accumulated a large sum of debt in the form of student loans. If you enter higher education and you are not lucky enough to be able to pay your fees straight up, taking out a loan is usually the only option. Of course, this allows you to study and achieve a degree, hopefully securing you a highly paid job eventually, but the cost of doing so can be immense. Most people assume that the only option is to pay off the loan once you graduate, slowly over time, with it eating into your salary every month. However many people will not have considered applying for loan forgiveness – which could see your student debt completely written off.
What is loan forgiveness?
Let’s start by stating that loan forgiveness does not apply to everyone and only a small portion of our readers will even be eligible for this scheme. Despite this, for those who it could apply to, the benefits are huge. You could have the whole of your student debt forgiven and repaid on your behalf. This frees up a whole chunk of your salary to spend on other things and you had needn’t worry about paying this debt off ever again!
Who is eligible for loan forgiveness?
The majority of loan forgiveness schemes apply to people that work in the public sector. This includes, but is not limited to, police officers, nurses, teachers and civil servants. For each different type of profession, the rules regarding loan forgiveness vary. In most cases understanding the exact regulations of loan forgiveness schemes is often difficult and there are many factors to consider. So much, so that there are actually companies such as loanforgiveness.org which now specialise in clarifying loan forgiveness rules and helping individuals to apply.
How to apply for loan forgiveness
The first thing that we would recommend anyone to do is to research the relevant loan forgiveness scheme as thoroughly as possible. Since each scheme is slightly different you may find that the one relevant to you has certain criteria you must meet before you apply. In addition to this, each scheme has a different application process, some opening and closing once a year, so it is well worth knowing this in advance to save your efforts being wasted.
Once you have identified if you are eligible for loan forgiveness you must liaise with your employer and the local authority to complete your application.
Not necessarily the best option for new graduates
In almost all cases it seems that you must have worked in the sector for many years and have been paying off your student loan via a government repayment scheme to be a valid candidate. This means that for those that have recently graduated, loan forgiveness is perhaps not the best option. However, this doesn’t mean to say that you won’t eventually be eligible so ensure you are repaying your debt (for the time being) in a manner that will suit the application process eventually.