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Types of Loan Forgiveness Programs

Without loans you may not do some important things in your life fast as you would want them to be. The responsibility of repaying your loans belongs to you as the borrower. You can be lucky to qualify under some special terms, for cancellations of all or part of your whole loan debt burden. Misfortunes such as permanent disability, illness, or lack of permanent employment can aggravate the burden of repaying your loans which can sometimes be more than one and huge in value. There are now loan forgiveness programs which are provided by the government, which can relieve you from the financial struggle You have an opportunity to apply for relief from the financial responsibility of repaying an educational loan, whose form of education you are no longer interested in. The common loan cancellation programs are four in number.

The common program of the four is public service forgiveness program. If you belong to such classes of employees as teachers, nurses, military personnel and firefighters among others, count yourself lucky. Before your request for cancellation of the loan outstanding, there are special conditions that you must meet. The condition is that, at the time of application, you must have faithfully serviced your loan for at least ten years, as long as you are working in a government department or in a non for profit organizations. One unique feature about the program is that for the loan to qualify under the same, it must be a state direct type, although there are options of tying all other student loans into one for them to qualify as well.

The second one is income driven loan forgiveness program. The income driven loan cancellation has interesting feature whereby you as the borrower has an opportunity to pay a lesser amount of your regular monthly repayment. You will get to benefit from any of the four alternatives under income based loan forgiveness program, which include, pay as you earn, revised pay as you earn, income contingent repayment, and income based repayment. There are conditions which you must meet for you to qualify for either of the four types of income driven loan cancellation programs. The programs will benefit borrowers who have consistently serviced their loans for over twenty years and it is targeted at those with huge loan balances outstanding.

A special type of loan cancellation program intended for teachers only is the teacher loan cancellation program. Teachers who have worked for five years following each other uninterrupted will have a reason to smile. A certain sum amount of money will be taken off from your loan burden. It is however for those teachers who are working in low income public elementary and secondary schools and have got direct loans and Stafford loans.

As alternative of loan cancellation program, you can apply for Perkins loan cancellation program. State employees who have worked for five years are eligible. Interestingly, this Perkin loan cancellation program, the whole amount of loan outstanding is done away with.

The four loan forgiveness programs are major ones available for students loan borrowers.

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