Loan Forgiveness

[jmccray]

Hey guys!!! Just signed a contract to teach math at the local high school. Because I am in a critical shortage area I heard I can have a percentage of my loans forgiven. Now for the questions:

1. These are Direct Stafford Loans. Should I start paying on these now as I am in grad school so that I can write off the interest on my taxes next year?

2. Since I hear they pay back Perkins Loans Completely, should I take out the max loans for grad school and perhaps maybe buy a car to get around in or even pay off credit card debt or even invest in a savings account?

3. Do you have to work at the same school for the 5 years, or can it be at another school (eg 3 years at one and 2 at another)?

 

Thanks so much for the help.

 

 

ETA: My loans are still in Deferment.

Edited August 6, 2005 by jmccray

[LynnInMN]

Found this on a google search. There is state specific info on the site.

 

http://www.aft.org/teachers/jft/loanforgiveness.htm

 

FEDERAL PROGRAMS

The Federal Student Aid Web site contains information on loan cancellation for both Stafford and federal Perkins loans. The qualifications for cancellation are outlined for each. A possible qualification for cancellation with both loan types is teaching in a school designated by the U.S. Department of Education as a "low-income school." Access the database of schools using the Web site listed below.

 

Cancellation/Deferment Options for Teachers

http://studentaid.ed.gov/PORTALSWebApp/students/

}english/teachercancel.jsp

The U.S. Department of Education has a variety of federal loan forgiveness programs: http://www.ed.gov/finaid/landing.jhtml?src=rt

 

Stafford loan recipients who received the loan after Oct. 1, 1998, and have taught for five years in a low-income school may be eligible to have up to $5,000 of their loan cancelled.

 

Stafford or PLUS loan recipients may have their loans deferred if they are teaching full time in a federally designated teacher shortage area for a minimum of three years.

 

Recipients of Perkins loans prior to June 23, 1992, may receive partial cancellation of their loan for service as a full-time teacher at a low-income school or in certain subject areas, on or after Oct. 7, 1998.

 

Recipients of Paul Douglas Teacher Scholarships (formerly the Congressional Teacher Scholarship Program) in or before 1995-96 may be eligible for reduced service obligations if they are teaching in a federally approved teacher shortage area.

[snowpuppy]

If you think you meet the date requirements Lynn gave you above, check to see if your school/district is on the list. I believe math/science is a field that is eligible in any school district.

 

Contact your board of ed. Usually one person is responsible for deferment/cancelation certifications. You get your forms from your guarrantor (such as SallieMae) or from Direct Lending. There has been a recent increase in the amount of forgiveness for Stafford/Direct Loans for teachers. Perkins are eligible for up to 100% forgiveness.

 

Check with your school for availability of Perkins funds at the grad level. The Perkins Loan program is scheduled to be axed by congress in the 06 or 07 federal FY.

[jmccray]

Is there any way around the no loans before Oct 1998 thing? I started in Aug 1996 and have about $5000 from then until Oct 1998 and about $38000 after that.

[jmccray]

bump. They told me I would have to pay for all my loans prior to 1998 in order to have loan forgiveness. Do you think I should maybe take the Citi 0% for a year BT and pay this amount off so that they can pay back a good amount of the rest?