Let’s face it, not everyone’s kid can be valedictorian, captain of the high school swim team, fluent in three languages and president of the National Honor Society.
Even if they were, these days that wouldn’t ensure they’d be: a) accepted by the college of their choice, or b) receive any grants to help pay for their education.
For most families, financing a degree involves cobbling together an array of student loans, parental loans and perhaps part-time work for the student. The joy of finally receiving a diploma on graduation day is dampened by the mountain of debt you owe.
The fact that your student doesn’t qualify for grants while in college doesn’t mean they can’t have all or a significant portion of their college debt erased after they graduate.
There are a surprising number of state-sponsored programs that will forgive, i.e. pay off, student loan debt if you meet certain conditions. Furthermore, this does not require your son/daughter to enlist in the military, although the armed services route is one way to earn a free college degree.
Surprised? Intrigued? Shocked? So was I.
If you’re wondering why you haven’t heard about these programs before, don’t feel like the Lone Ranger. “Most people are unaware they exist," according to Terrence Thomas, spokesperson for Education Dynamics, parent company of www.eLearners.com.
Thomas says a study conducted by the firm found that “most state programs had money left over at the end of 2008.” Money that went unused simply because people didn’t apply for it.
A major reason state-sponsored student debt forgiveness programs have attracted so little attention is that until a few years ago, there was no central location to learn about these opportunities. If you didn’t know they existed- or where to look for information- you simply missed out.
Although eLearning.com focuses on Internet-based college programs, the company realized that no matter what type of school students chose, they still want help in financing their degree.
So, The Debt-Free College Guide was launched, which Thomas claims is “the only site where you’ll find student loan forgiveness programs for all 50 states.”
Many programs are offered to individuals who go into teaching or medical fields.
“The beautiful thing,” says Thomas, “is that all you have to be is an eligible resident. It’s not subjective.” In other words, your GPA doesn’t matter and there are no essays to write. All you need is a degree that qualifies you to work in a profession for which that state has an urgent need.
If you meet the criteria, your student loans will be partially- or completely- paid off. According to Thomas, the state of New York has a program for nurses and “100% of the applicants received the funds.”
As you might expect, there are some strings attached. Often, this involves accepting a job in an economically-disadvantaged area for a certain period of time. Thomas also cited a program for Maryland residents who plan to become dentists. No matter where you earn your degree, if you come out of dental school with “outstanding higher education loans and 30% of your patients are low-income, you can apply to have some of your loans forgiven.”
Another example is Florida which, says Thomas, has “a critical teachers shortage reimbursement program. Once you are under contract with the state, they will forgive your loan.” This is available to new graduates as well as working adults who return to college to earn a teaching degree. If you graduate with a law degree, Arizona will forgive all of your loans if your practice provides advice to underprivileged residents.
In Thomas’ words, “If you’re passionate about what you want to do, but afraid of the cost,” a state-sponsored loan forgiveness program can be a win-win solution. “It gets good people into public service.”
When I entered “Pennsylvania”- my state of residence- I discovered there are loan forgiveness programs for teachers as well as those who graduate with a degree in agriculture or veterinary medicine. There are also grants available to undergraduate students from certain zip codes who pursue science and engineering degrees.
Pennsylvania also offers a calendar that will remind you about deadlines for submitting paperwork, either by e-mail or text message.
Not all programs require you to be a state “resident” or even attend college in that state in order to receive loan relief. However, most pay-back programs are tied to service in the state. For example, according to Thomas, if you graduate from a college in, say, Michigan and return to Pennsylvania to teach, you would apply to Pennsylvania’s loan forgiveness program. The key, he says, is “to look at the specific rules of the program” to see if you’re eligible.
The good news is that you can apply to a tuition program while you’re in school or after you graduate. The bad news is that some states have been forced to reduce the amount of help they can provide due to budget cuts. Nonetheless, if you’re looking for ways to make college less financially daunting, state-sponsored loan forgiveness programs are worth investigating.
Ms. Buckner is a Retirement and Financial Planning Specialist at Franklin Templeton Investments. The views expressed in this article are only those of Ms. Buckner or the individual commentator identified therein, and are not necessarily the views of Franklin Templeton Investments, which has not reviewed, and is not responsible for, the content.
If you have a question for Gail Buckner and the Your $ Matters column, send them to: firstname.lastname@example.org, along with your name and phone number.