College loan debt now exceeds $1 Trillion Dollars in the United States and is only outranked by real estate mortgages. A combination of costly student loans and a lack of jobs available for graduates have made paying off student loans a complicated task. The high debt ratio not only has a negative impact on the college graduates, but also on this country’s economy as a whole. While a high population of college drop outs and graduates struggle to find jobs and pay off costly loans, they are unable to buy new businesses, cars, homes and other purchases or investments.
Default student loans will negatively affect a person’s finances and credit status more so than other types of loans (i.e. credit cards, auto loans, etc.) because student loans are no longer eligible to be included in a bankruptcy. Therefore, there is no way to get out of paying for student loans.
What is a Loan Forgiveness Program?
College loan forgiveness has been in existence since as early as 1958 when The National Defense Student Loan Program was established by the National Defense Education Act. The program was implemented by President Eisenhower as an effort to increase the level of technology in the United States.
By 1968, other college loan forgiveness programs followed. Alaska offered a program to encourage graduate residents to remain in the state for at least four years following college graduation. In the 80’s, programs were also put into place for those who served in the military and also for students who studied in health, law or education.
On March 8, 2012, the Student Loan Forgiveness Act of 2012 (aka: “10/10 Loan Repayment Plan”) was introduced. It creates a new loan forgiveness program, which caps interest rates for all federal loans; improves Public Service Loan forgiveness and even allows conversion of some existing private loans into federal loans.
To find out more about how to qualify for forgiveness on student loans and other school loan repayment programs, simply contact us online.