When you graduate college, the number of outstanding loans you have can be quite overwhelming. For many Iowa college graduates, it is nearly impossible to get all those payments made, making it difficult to succeed in the real world. To help combat these issues, Congress created the public service loan forgiveness program to help college students with their loans. Now students in Iowa who have graduated college can take part in the Iowa student loan forgiveness program.
What is the Iowa Student Loan Forgiveness Program?
The College Cost Reduction and Access Act of 2007 prompted Congress to create the program to help college students who enter certain fields of employment. Borrowers who enter the fields that are accepting new applications for loan forgiveness can apply to have their student loans forgiven, which basically means written off. The forgiveness of debt begins after the borrower has made 120 payments on their student loans.
What Loans Are Eligible?
Loans under the William D. Ford Federal Direct Program that have not gone past due are eligible for this program. This program includes direct subsidized loans, direct unsubsidized loans, direct PLUS loans and direct consolidation loans. There are other federal student loans that can become eligible if they are consolidated into a direct consolidation loan. The loans that can be consolidated include subsidized and unsubsidized Stafford loans, federal PLUS loans, federal Perkins loans and some nursing loans. It is important to note that even if the other federal student loans are consolidated into a direct consolidation loan, only the payments made on the direct consolidation loan will count toward the 120 payments required.
What Are the Borrower Requirements?
The main requirements are that the borrower must not be behind on payments on the loan and must be employed full-time in certain industries to be eligible. This employment must be in place at the time of application, while making the 120 required monthly payments and at the time of forgiveness of the loan.
What Are the Acceptable Industries?
Borrowers can work for any government agency, whether it is federal, state or local. They can also work for any non-profit agency that is recognized as tax exempt by the IRS or for a private non-profit employer that is not tax exempt. Some examples of this type of employment include policemen, fireman, lawyers, doctors and teachers. The Iowa student loan forgiveness program is a great way to encourage college graduates to work in a public service role, as well as help them be financially stable in their future.