Stafford Loan Forgiveness
Donít wait until your Stafford Loan goes into default before searching for help. If youíre having difficulties repaying your direct Stafford Loan then you may be able to qualify for a direct loan forgiveness that is offered through the federal government. The direct Stafford Loan forgiveness program is offered to public service employees, who are employed full-time in a public service job during the same period in which the qualifying direct loan payments are made and at the time that the cancellation is granted. The amount forgiven is the remaining outstanding balance of principal and accrued interest on an eligible Direct Loan for a borrower who is not in default and who makes 120 monthly payments on the loan after October 1, 2007.
If you are a teacher serving in a low-income or subject-matter shortage area, it may be possible for you to cancel or defer your student loans. Make sure to speak with a direct Stafford Loan representative before your loan is in default stage or before itís too late to remedy your delinquent loans. You may be able to change your repayment plan, go into payment deferment, or have your loan cancelled.
Stafford Loan Forgiveness Requirements:
∑ You must not have had an outstanding balance on a Direct Loan as of October 1, 1998, or on the date that you obtained a Direct Loan.
∑ If you are in default on a Direct Loan, you are not eligible for forgiveness unless you have made satisfactory repayment arrangements with the holder of the defaulted loan(s).
∑ The loan(s) for which you are seeking forgiveness was made prior to the end of your five academic years of qualifying teaching service.
∑ You have not received benefits through the AmeriCorps Program under Subtitle D of Title I of the National and Community Service Act of 1990 for the same teaching service for which you are seeking forgiveness on your Direct Loan.
∑ You must have been employed as a full-time teacher for five consecutive, complete academic years, at least one of which was after the 1997-1998 academic year, in an elementary or secondary school.
The Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue in the teaching profession. Under this program, individuals who teach full time for five consecutive academic years in certain elementary and secondary schools that serve low-income families may be eligible for forgiveness of up to a combined total of $17,500 in principal and interest on their Stafford Loan. As of August 14, 2008, an otherwise eligible borrower may qualify for forgiveness if the borrower has provided qualifying teaching services at one or more locations that are operated by an educational service agency.