3 On Your Side: Erasing College Loan Debt With Public Service Loan Forgiveness Program
By Jim Donovan
PHILADELPHIA (CBS) -- The numbers are staggering, seven out ten college graduates have outstanding college loans and up to 25 percent of borrowers are behind in their payments! In today's 3 On Your Side report we take a look at a program that can erase thousands of dollars in college debt.
Leah Burke racked up nearly $140,000 in student loan debt by the time she finished grad school. She says, "I just always figured it would be juggling, and balancing and trying to make ends meet every month while making these loan payments."
Making payments became even harder when she switched to a lower paying job at a non-profit college. But it turns out that making that career move was a smart one. That's because Burke learned about the Public Service Loan Forgiveness Program.
The program wipes away college debt for educators, soldiers, firefighters and many others with public service jobs after they make 10 years of payments.
"After paying your loans on time for 10 years on any qualifying repayment plan, the remaining balance of those loans get forgiven," says Kim Rogers of Clarifi, the region's largest non-profit credit counseling agency.
According to Rogers, "There's been a lot of misinformation about the program. Number one you want to make sure you're working for a qualifying employer, number two, that you're on a qualifying repayment plan and number 3 you want to make sure you that you have a qualifying loan."
The first college loan debt will start to be forgiven in October of 2017, at which point you can submit an application. Until then, you can start the ball rolling by filling out an employment certification form which will document your eligibility as you work.
Burke estimates she'll be forgiven $20,000 to $30,000 of college loan debt. "I think this is one piece of the puzzle of figuring out how to take that burden away."
Not all loans qualify for the Public Service Loan Forgiveness Program. It applies to Federal Direct Loans, not private loans. If you have a Perkins loan or Federal Family Education Loans, those can be consolidated into a Federal Direct Loan so that you can apply for the program, but those loans in and of themselves don't count.