Student Loans and Public Service

    The challenges of paying off student loan debt are receiving increasing attention. If you can relate, it may be impacting your ability to save, pay bills, stay out of other debt, and more.

    You may have options though to help you manage the debt load, including:

    • Repayment programs, which limit payments to a manageable percentage of your income.
    • Loan forgiveness programs, including particularly favorable rules for public service work.

    If you have student loans and work for a local or state government, the extra benefit from loan forgiveness could be significant.

    • Your remaining loan balance is forgiven after 10 years of qualifying work and payments.
    • The forgiven balance is not subject to taxes.

    It's important to understand the qualification requirements. Some key ones include:

    • You must make 120 qualifying payments while employed full-time by a qualifying public service organization.
    • Only federal student loans under the Direct Loan program are eligible.
    • Payments must be made under a qualifying repayment program.
    • You can't be in default on the loans.

    When reviewing your options, consider your overall finances. Aim to make progress on saving for future goals and paying down existing debt at the same time.

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