Repayment Assistance: How It works



Basically, you have loans - too much debt for your income, right? You would apply for student loan repayment assistance, which is a fancy name for forgiveness. The program looks at your qualifications - which you'll learn more about below - and then either awards you some money or doesn't.

Easy, right?

How come organizations offer these programs? That goes back to the 3 critical factors, but typically your work both deserves some recognition and you don't make very much money, or you are willing to do something most others in your field won't do.

You can think of these programs and awards as a backwards scholarship. Since you have finished your degree and used it to help people, you can have some money for college. Funny, right? You didn't get enough money in scholarships when you went to school, but now you can even apply after the fact.

Nearly every field has some kind of loan forgiveness or repayment assistance. Sometimes you find your university offering it, sometimes a national organization. State and federal governments have also stepped up assistance for many groups of public servants as well.

The Three Critical Factors

In general, every program has two or three things in common. These are the critical elements of a student loan forgiveness program:

1. Spend time working in a public service position

2. Work in a job that has a critical need

3. Accept a position with low pay in comparison to others in their field

A few examples that meet the above items:

- Americorps or Peace Corps volunteer. You work for a couple of years in the Peace Corps or Americorps, which are very low paid

- Take a job teaching at a public school for a few years

- A doctor or nurse working in an area that is short on their talents

- Public defenders, lawyers who work for low pay in civil service

You can find many more, the list goes on and on. But the point remains the same: if you spend time in a public service position, possibly in an understaffed area, and don't get paid much, you probably qualify for some loan repayment assistance.

How To Qualify

To get accepted for assistance, you need to look at the application and the requirements of the program. Usually, you will have to work at the job for at least a year, with benefits tied to how long you have worked there. You might get a benefit year by year. The forgiveness amounts will vary as well.

When a university offers loan repayment, you usually have to be an alum. And for a state program to accept you, you need to live in the state as a resident. Some programs rely on the type of loan to repay as well.

Do You Have A Chance?

If you find yourself in a job similar to the description above, then you have a chance. Many programs accept applicants up to ten years after graduation, and many fields have dozens of programs.

Start with your school, see if the school has established a loan assistance program. Next, look to your state for help through the department of higher education. Then check with the federal government programs. You can also ask your employer if loan repayment is offered as a benefit, but often this must be negotiated at hiring.

For Students

You still have time to make some plans if you find yourself still in school and looking at a sizable debt. Consider doing a couple of things now.

First, think about taking a qualifying position. Sorry to say, after you get out the pressure may be on. If you can qualify for a teaching certificate now and take a public school job for a couple of years to get your loan under control, it may be worth it. And when will you have a better opportunity to volunteer for the Peace Corps or Americorp?

Second, since you can still choose a field, you might want to choose a higher paying one, but don't let this fool you. Relatively fewer of the programs cater to business and scientific fields due to higher pay. You can still get some assistance by volunteering or spending a couple of years in a position that offers the help.

And if you are a lawyer, doctor or nurse, you have a great opportunity. Basically, you will be paid to get experience, help people, and lower your debt, if you take a job where others with your credentials don't want to work. Give it a try.

Good luck, and learn how the programs work. Also, new ones pop up regularly.