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Student Loan Forgiveness Act of 2012 (H.R. 4170)

The Student Loan Debt Crisis

Since 1978 average college tuition for a four-year college education has boosted a shocking 900%. At the same time, funding for college grants continue to be cut down. In situation like this, millions of students are forced to take student loans that are non-dischargeable in bankruptcy in order to pay for their college education. In addition to this, more than a half of recently graduate students find it impossible to find a full-time employment and at least one out of five students presently default on their student loans.

It is expected for total outstanding student loan debt to go over $1 trillion in 2012. This fact marks it as a serious financial crisis which can lead to another crush of global economy in the USA. People buried in their student loan debts cannot afford to buy a car or a house, to start they own business, or even to get married. Millions of individuals are failing to be engaged in economically motivating activities and this can have a devastating effect to the country’s economic growth. Possible way out of this situation may be The Student Loan Forgiveness Act of 2012 (H.R. 4170).

What is The Student Loan Forgiveness Act of 2012 (H.R. 4170)?

On March 8, 2012, Congressman Hansen Clarke of Michigan has introduced the Student Loan Forgiveness Act of 2012, H.R. 4170, in the House of Representatives. This Act is a legislation intended to help those who are under pressure of enormous amounts of their student loan debts. This Act is a hope for millions of Americans who struggle to pay off their loan debts. This is a petition for the House of Representatives to vote on this bill in 2012 and for the president Barack Obama to sign this legislation into law.

The Student Loan Forgiveness Act of 2012 (H.R. 4170) Outline

H.R. 4170, the Student loan Forgiveness Act of 2012 main points include the following:

  • 10/10 Loan Repayment Plan

This plan limits a payment amount at 10 percent of borrower’s discretionary income and provides loan cancellation in 10 years. In other words, H.R. 4170 would create a “10-10 standard” for student loan forgiveness which means that if you have paid 10 percent of your discretionary income toward your loans for previous 10 years your remaining federal student loan debt would be forgiven. Discretionary income is defined as the borrower’s and his/her spouse’s (if applicable) adjusted gross income exceeding 150% of the poverty line applicable to the borrower’s family size as determined under section 673 (2) of the Community Services Block Grant Act (42 U.S.C. 9902(2).

In case you have already been paying off your education loans, you can expect for your repayment period to be shorter than 10 years. The sum of the loan you have already paid off over the ten years would be credited in the direction of meeting the requirement for loan forgiveness.

  • Low Interest Rates

The bill would guarantee low interest rates on federal student loans by limiting them at 3.4%.

  • Refinancing Private Loans

The bill will also help those who took private student loans with high interest rates and whose student loan debts surpass their income by allowing them to convert their private loan debt into federal Direct Loans and obtain a Federal Consolidation Loan which will allow them to enroll their new federal loans into “10/10 program”. The only eligibility requirement is that your average adjusted gross income is equal to or less than your total student loan debt.

  • Public Service Loan Forgiveness

The bill would reward graduates for entering public service professions. Individuals who decide to enter teaching profession, practice medicine or go into public service can be eligible to have their student loans forgiven after five years of service.

  • Forgiveness Amount

Under the Act of 2012 there would be no caps on the maximum amount of forgiveness available for those borrowers who are presently in school or in loan repayment. However, the 2012 Act caps the amount for new borrowers that can be forgiven to $45,520 in principal of the loan and fees plus the interest accrued on the principal and fees.

  • Defaulted Student Loans

Borrowers who have their loans in default would still be eligible to enroll in “10/10 program”.

  • Federal Plus Loans for Parents

Parents who took out a Plus Loan for Parents would also be eligible to enroll in “10/10 program”.

  • Tax Exclusion

The amount of your eligible education loans forgiven will be excluded from taxable income.

Student Loan Forgiveness Eligibility

Repayment and forgiveness under the Student Loan Forgiveness Act 2012 only applies to federal student loans. If you are planning to consolidate your student loans, consolidate into a Federal Consolidation Loan since this would be eligible for the Student Loan Forgiveness Act’s 10/10 plan and Public Service Loan Forgiveness (PSLF).

Although the Student Loan Forgiveness Act 2012 has not yet been passed it already gained a huge popularity. One million people so far dedicated to a SignOn.org petition supporting H.R. 4170, the Student Loan Forgiveness Act 2012.

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Student Loans Forgiveness Opportunity with Sallie Mae

Student loans are designated to give assistance to students in paying for their educational expenses, which is beneficial to millions of students in the terms of their pursuit for successful career. However, student loans can lead into a deep financial crisis if you let your debts pile up and it can take years to repay your loan. Though, there is a loan forgiveness program offered by the federal government intended to help a selected group of college graduates to repay their student loans. This group includes nurses, teachers and law students who choose to work in areas in high demand such as high need healthcare facility, low-income schools or as public interest attorneys with deprived individuals. Student loan forgiveness is offered to these professionals in exchange for certain number of years service in the fields above-mentioned. Sallie Mae Loan holders may apply for this loan cancellation program if they meet certain eligibility requirements.

Are you Eligible for Sallie Mae Student Loan Forgiveness?

To qualify for the Sallie Mae Student Loan Forgiveness, you must meet certain criteria:

  • You must have started your student loan with Sallie Mae after June 30th, 1985 and no later than July 1st, 2009;
  • Your student  loan debt cannot be over $100,000;
  • Your Sallie Mae loan must be in good standing;
  • You cannot presently be an enrolled student at a qualified institution.

In addition, every of the particular loan holder categories must meet additional conditions in order to qualify.

Nurse Student Loan Sallie Mae Forgiveness

RNs, LPNs, nurses with advanced degrees, and particularly nurse faculty are all in high demand in the USA today. In order to qualify for this cancellation opportunity, professionals in this field must:

  • Be holders of student federal loans and
  • Work in a high demand healthcare facility

Teacher Student Loan Sallie Mae Forgiveness

To be eligible for teacher loan cancellation, borrower must:

  • Work in a designated low-income public school or private non-profit school for at least five consecutive years or
  • Teach one of critical need study area, such as math, science or bilingual courses
  • Works with disabled children
  • Works In early childhood programs.

Law Student Loan Sallie Mae Forgiveness

Field of public interest law is in high need and attorneys who work with disadvantaged individuals are eligible to apply for their student loan cancellation.

How to Apply for Student Loan Sallie Mae Forgiveness

  • First make sure that your student loans meet the criteria
  • Make 120 required payments under one of Direct Loan repayment programs such as Standard Repayment Plans, Income Contingent Repayment Plans and Income Based Repayment Plans
  • Find employment as a teacher in certain schools or fields for at least five consecutive years , as a nurse in high need healthcare field or a public interest layer
  • Fill out a forgiveness form from the Department of Education
  • Get your teaching certification from the school’s administrator or your employer in order to qualify for Sallie Mae student loan cancellation
  • Following your loan forgiveness application is finished send it to your loan servicer for the further processing
  • If your loan provider finds that you are eligible for student loan forgiveness, you will be mailed a confirmation for the cancellation balance.

Don’t miss the opportunity to get your student loans cancelled. If you find that you qualify, apply today for your Sallie Mae student loan forgiveness.

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An Introduction to Teacher Loan Forgiveness Program and How to Apply

What is the Teacher Loan Forgiveness Program?

Nowadays, a large number of students in The USA take student loans to pay for their academic education. Student loan repayment usually comes in six months after student finishes school.  However, professionals in some particular occupations can expect to have their student loans forgiven, and teaching profession is one of these. Teacher loan forgiveness program (TLFP) is a supportive loan cancellation program introduced by the US Congress. Given that teaching is considered as a very responsible and demanding profession, the intention of this program is to reward those working as school teachers for their important commitment and to encourage them to stay in teaching profession. Teachers with student loan debts now can save significant amount of money with launching this program. To qualify for a US federal loan forgiveness program, applicants have to work on full-time bases as teachers for five consecutive academic years in schools where teacher earnings may not be high. These schools are called “low-income” schools as they have a lot of students from low-income families. A list of selected schools can be found in the Department of Education’s online Teacher Cancellation Low Income Directory. The Department of education publishes this list of designated school boards every year.

The details of teacher loan forgiveness program vary by state and federal government regulations. For example, some states like Georgia have their own programs for teacher loan debts forgiveness which gives the opportunity to more categories of teachers to get their student loan cancellation. In Georgia foreign language teachers can also benefit from this program, since they are eligible for TLFP in this state.

The teacher loan cancellation program only is valid to the exceptional balance at the time the application was accepted. Preceding payments are not to be refunded. The particular loan provider makes a decision on student loan forgiveness plan, and it is not possible to be automatically approved for debt forgiveness. The maximum forgiveness amount is up to $5,000 (increases to $17,500 for teachers who teach special education or math and science in secondary schools).

Teachers Loan Forgiveness Programs

Stafford Loans Program

Stafford Loans Program is a federal program intended to support people entering teaching profession. Consolidated Stafford Loans are made throughout the Direct Loan or Federal Family Education Loan programs. To qualify, teacher must be a new borrower of the Federal family Educational Program or Direct Loan Borrower on or after 1st of October 1998. In addition, teacher must not have received refund from the AmeriCorp Program under Subtitle D of Title 1 of the National community Service Act of 1990 for the loan she is seeking cancellation for.  Furthermore, he or she must not be in failure to pay on the loan.

How to qualify?

To be eligible for the Stafford Loan Forgiveness Program applicant must:

  • Have worked as a teacher for at least five successive academic years in an elementary or secondary public or nonprofit school that was nominated a “low-income” school by the US Department of Education
  • Must be employed on full-time basis
  • Must have his teaching service began on or after October 30, 2004
  • Have no less than one of the teaching years after the 1997/98 academic year
  • Student loan must be made before the end of the fifth year of qualified teaching
  • Those teaching in elementary schools, must provide evidence they have knowledge of teaching skills in elementary curriculum areas
  • Teachers working in secondary schools must certify that they are teaching a subject applicable to their university major
  • Highly-qualified teachers of secondary school key subject areas: math and science or teachers of special education who work with disabled children may qualify for the forgiveness maximum to $17,500

Perkins Loan Cancellation Program

The Perkins Loan cancellation plan has less strict requirements concerning loans that can be canceled than Stafford Loans program, although normally comprise Perkins Loans made on July 1, 1972, or after. Perkins Loan forgiveness program allows teachers to receive forgiveness benefits increasingly. Fifteen percent of teacher’s Perkins Loan credit gets canceled after first two years of teaching service; twenty percent gets canceled after third and fourth year and thirty percent after the fifth and any following years.

How to qualify?

To meet the criteria for the Perkins Loan Cancellation Program applicant must:

  • Have worked as a teacher for at least five following academic years in an elementary or secondary public or nonprofit school that was designated a “low-income” school by the US
  • Department of Education, where at least 30% of students come from the “low-income” families
  • Have taught  in the specific subject area or has been a special education teacher; in that case there is an exemption of the “low-income” rule
  • Have worked in a private, but strictly non-profit school, servicing “low-income” students
  • Must be considered as a full-time professional by the employing school
  • Have taught in the field of science, math, bilingual education and foreign languages or in a subject designated as a teacher deficiency area by the state education agency.

How to apply

  • You can apply for Teacher loans forgiveness program after you have taught for five consecutive years in “low-income” school
  • You can submit the application by filing out online Teacher Loan Forgiveness Application Form (2012). Applications and regulations are available on the Department of Education website under Student Financial Aid.
  • You must get your teaching certification from the school’s administrator (usually principal or vice principal) in order to qualify for teacher loan cancellation
  • After your loan forgiveness application is completed, send it to your loan servicer (if you have a direct loan) or to the Department of Education (if you have a federal loan) for the further processing.
  • If your service provider finds that you are eligible for TLFP, you will be mailed a confirmation for the forgiveness balance.

Applying procedure in five steps

  1. Visit the studentaid.ed.gov and choose “Repayment Information”, than select “Cancellation and Deferment Options for Teachers”. In case you have received application from your lender, go to step 3.
  2. Determine if you meet the eligibility criteria
  3. Print a copy of Teacher Loan Forgiveness Application and complete the necessary information in sections 1 and 2. Sign your name in the field where it asks for the borrower’s signature
  4. Have your Chief Administrative Officer fill out the information in section 3
  5. Mail the application to the address given in section 9. In case the address is missing, contact your loan provider.

Benefits and drawbacks of Teacher Loans Forgiveness Program

The main advantage of teacher loan cancellation is that it saves low-income school working teachers a considerable amount of money, especially for teachers who borrowed a minimum amount of student loan. This is beneficial for “low-income” schools also giving the fact that they usually have difficulty hiring highly qualified teachers. On the other side, one of the main disadvantages of this program is time. Namely, teachers are obligated to complete five uninterrupted year teaching period to qualify, which means that they must extend their endurance in order to meet the criteria. In addition, most of these designated schools are often located in deprived and dangerous parts of the city.

To sum up

Teacher Loans Forgiveness Program is US government project intended to reward teachers who have preferred to work in high-demanding teaching areas. The major purpose of this program is to reward those working as school teachers for their commitment to profession.

To qualify for either Stafford or Perkins Loan cancellation programs, the main requirement for applicants is to have five comprehensive academic qualified teaching years. Stafford Loan cancellation program requires teachers to complete consecutive five years of teaching, while with Perkins Loan forgiveness teachers receive forgiveness benefits increasingly. The limit of possible forgiveness is $5,000, but teaching science and math at secondary school or teaching special education which includes work with children with disabilities increases applicant’s prearranged forgiveness maximum to $17,500.

Only full time teacher can qualify for either, Stafford or Perkins Loan cancellation programs. To qualify for teacher loans forgiveness program, teachers must get certification of their teaching from the school administrator.

Many US states, such as Georgia have their own teacher loans cancellation programs. Such programs regularly work adding together to federal loan forgiveness programs. Moreover, they create opportunity to more teachers to get their student loan cancelled.

Apply for your teacher loan forgiveness today

There are many “low-income” school boards across The USA today who are in need for qualified teachers to provide quality education to their students. If you meet the criteria and you have passion for teaching in one of these schools, apply for the teacher loan forgiveness program and have your student loans forgiven. Once your loan forgiveness is accepted, your student loans are fundamentally erased, together with any interest sustained.

We strongly recommend potential applicants to check their state’s Education Department to get information if the state provides such loan forgiveness program.

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Basics of Student Loan Forgiveness and Repayment Programs

While costs for a college education continue to rise, people aren’t making much more money than they did a few years ago. Because of this, many family’s budgets are stretched beyond the ability to pay for a college education out of pocket. In this situation how many people take out student loans to help pay for their education at a university. Many people who have completed college are left with large student loan balances that could take many years to repay. While large student loans can be an issue, some people can actually qualify for student loan forgiveness.

Student Loan Forgiveness

So what exactly is student loan forgiveness and how does it work? Student loan forgiveness is a process in which the lender eliminates part of the debt that the borrower has in place. Once the that has been forgiven, the borrower does not have to worry about repaying it at any point in the future. There are many different types of student loan cancellation that are available to individuals who have outstanding debt.

Medical Loan Forgiveness

In order to become a doctor, you have to go to medical school, which takes many years to complete MD education. Because of this, doctors are often left with very large student loan balances after they get done with college. With the medical loan forgiveness program, doctors can get a big portion of their student loan debt forgiven in exchange for working in a specific geographic region. Most of the time, doctors are needed in rural areas at hospitals and clinics. As long as a doctor is willing to go to these areas and work for a certain number of years, he can get part of his MD student loans cancellation.

Teacher Loan Forgiveness

Another way that you could get part of your student loans forgiven is if you work as a teacher. The teacher loan forgiveness program makes it possible for certain school teachers to get part of their debts forgiven if they work in a qualifying school district and many States like Georgia, Texas or Arkansas have their own programs of loan cancellation in addition to federal program. If you serve a school district that helps many low-income families and children, you may be able to get up to 30 percent of your student loans taken away. This can be a sizable forgiveness amount, depending on how big your loans are overall.

Volunteer Work

In many cases, you can get your student loans forgiven by participating in volunteer work. If you have Stafford loans or Perkins loans and you volunteer for the Peace Corps or AmeriCorps, you can get up to 70 percent of your loans forgiven, depending on how long you are in the program. With this option, you need to make a difference in the lives of people all around the world, while getting rid of your student loan debt at the same time.

Legal Forgiveness

If you get a law degree and then work in a non-profit company or charity after law school, you could get part of your loans forgiven. Many law schools will actually forgive part of your loan if you work in one of these types of entities after you graduate.

Compared to Repayment

Some businesses and other entities will actually repay part of your loans in exchange for your service. While this provides the same results as loan forgiveness, it is technically not the same thing. With loan repayment, the company that you work for simply pays off some of your loan. For example, the military loan repayment program offers members of the military up to $10,000 to repay their student loans.

Tax Considerations

If you are thinking about getting part of your student loans forgiven, you should pay attention to the tax factors involved. Depending on what type of loan forgiveness you take advantage of, you may have to pay taxes on it. When you get loan cancellation for being a teacher, working as a lawyer, working as a doctor or volunteering for the Peace corps, you will not have to be responsible for taxes on that forgiven debt.

However, if you get part of your debt forgiven because the school closed or because of an unpaid refund, you may have to pay taxes on that amount. If you have debt forgiven because of debt or disability, the amount that is forgiven is taxable.

Considerations

Overall, the student loan cancellation programs are definitely helpful if you qualify for them. If you are thinking about pursuing one of these programs, just make sure that you find out if you’re going to be liable for paying taxes on the amount that has been forgiven. If you are sure that you can handle the taxes that come with the forgiven debts for you will not be responsible for taxes, then move forward with the student loan forgiveness program.

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The New Obama Student Loan Forgiveness Program

Obama’s student loan debt forgiveness plan

The promises that a quality college education will guarantee a great paying job are lost with a downturn of the U.S. economy. The unemployment rate has remained above 9% for the last two years as employers are practicing a hiring freeze or reducing their payrolls. In the last several years, college students have spent thousands of dollars in college tuition to get a quality education and a degree that promises to pay these loans back. Now these graduates cannot find the jobs they need to fulfill their obligations.

Graduates having trouble paying their student loans have many options. Some of these options include deferments and forbearances, where payments can be postponed for any number of reasons until graduates can find a job and begin earning income.

Another option has also been recently made available. The Obama student loan forgiveness program can help help those student that have too much student loan debt. Under this plan students that are making satisfactory payments for twenty years can have their remaining loan balance forgiven, regardless of how much it is. What’s even better news is that people that work in public service, such as teachers, can have their remaining loans forgiven after 10 years, which is good news for public service workers in Georgia.

The Obama student loan forgiveness program covers student loans like FFEL, Stafford loans, Direct loans and the Perkins loans. It is not covered for private student loans. Georgia residents should fill out the application for the Obama student loan forgiveness program sooner rather than later. The ten year repayment period begins as soon as the application is completed and signed. Those people who are already in public service cannot count their previous years of service.

Another option many graduates can take advantage of is the income sensitive repayment plan. This repayment plan limits your monthly student loan payments to 10% of your total income after taxes and other basic expenses are taken into consideration. This is the one solution for many college graduates that are facing limited income after graduation. In some cases, if income is low enough, the monthly student loan payment can be zero, but it can still count towards the 120 qualifying payments.

While many Americans will attempt to put their student loans into deferment or forbearance, it’s worth doing a little bit of research to find out if you qualify for the newly passed student loan forgiveness program. In fact, you may discover any number of programs that could apply to your situation should you not qualify for the new Obama plan. The last thing anyone should do is allow their loans go into default as this would disqualify any type of repayment plan. Making payments on any plan also gives a person the chance to save or rebuild their credit score too.

Many Americans have student loan debt and are making payments over many years. The student loan debt forgiveness plan can help by limiting the duration of the loan payments for 20 years or even cut it in half for public service workers. Even better is that many students can take advantage of the income sensitive repayment plan and have their monthly payments reduced even further.

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