Help for Crushing Student Debt


The cost of a higher education continues to rise, and many students find that even if they get scholarships and/or grants crushing student loan debt often comes with that shiny new degree.

The good news is that there is help paying back those student loans, if you know where to look.

Income Based Repayment Plan

On July 1, the federal government began operating a new income based repayment plan for Stafford, Grad PLUS and consolidation loans made under the FFEL and Direct Loan programs. This plan allows graduates to arrange reduced payments on their loans if student loan debt is 1.5 times their gross income. The program attempts to help students by extending the loan term out and requiring a payment of between 8% and 15% of monthly income, depending on earnings and family size. Students have to show annual documentation to prove continued hardship, and after 25 years, whatever remains on the loan is forgiven. More information on Income Based Repayment can be found at

Student Loan Forgiveness

Choose the right profession, and you could have all or part of your student loans forgiven.
If you serve the public for 10 years in your profession, at the end of those years, the remaining balance on Stafford, Grad PLUS or Direct Loan consolidations is forgiven. (In most cases, student loan forgiveness is not considered income for tax purposes.)

Jobs eligible for Public Service Loan Forgiveness include:

• Federal, state, local and tribal government jobs.
• Military and public schools and colleges.
• Full-time positions in Peace Corps or AmeriCorps.
• Non-profit, tax-exempt 501(c)(3) organizations.

Public Service Loan Forgiveness is compatible with the new Income Based Repayment; if you take a low-paying public service job for 10 years and use IBR, most of your student loans are likely to be forgiven. You can find out more about Public Service Loan Forgiveness at

You can also receive full or partial student loan forgiveness through part-time AmeriCorps and Peace Corps positions, as well as through Volunteers in Service to America. Aid for military service members through the G.I. Bill and through programs offered by the Army National Guard are also available.

One Debtor's Story

Teri Smith recently graduated from BYU-Idaho with a teaching degree. She started teaching at a rural school last year, and will return for the coming school year. “If I teach for five years in a row, I can get student loan forgiveness for teaching at a Title I school,” she says.

Smith is not alone: The Teacher Loan Forgiveness Program encourages teachers to share their talents with low-income students in areas that often suffer from teach shortages.

There are also student loan forgiveness programs for graduates in legal and medical studies. Some states also offer student loan forgiveness programs. Maryland, Alaska and Mississippi are three states with well-known and generous programs aimed at recruiting qualified graduates to enter certain professions. has a list of loan forgiveness programs and how you can find out about their eligibility requirements.

Of course, if you do not qualify for any of these programs, and you still need help repaying your student loans, you could try forbearance or deferment from your lender. Neither of these options is as generous as student loan forgiveness, though, and many students may find that it is worth it to plan a profession that gives back to them—even as they give to society.

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The Key to Paying for Grad School

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