I made the mistake of going to Graduate school the year the US economy went to hell (2008)! At that time I was earning $36,000 annually working a Grant funded job. I thought work experience and Master’s degree would help me get a job making around $50,000.
My master plan was to live frugally for five years and pay my student loans off. The political climate changed so much and federal grants and government jobs became scarce. So Plan B was to take advantage of the job market that didn’t seem to dwindle, Family Services.
I went back to school and acquired a second Master’s degree in Family and Consumer Sciences, only to discover that the better paying jobs in this field require a License Social Work Certification/Examination.
I have no money for certification and refuse to borrow any more money even if I could. I have been substitute teaching, contract outreach services, and temporary jobs just to pay bills. Sometimes my yearly income ha s been so low that my Income Based Repayment Plan has been $0. The interest that has accrued on this IBR plan has exponentially increased my debt.
However, I have been focusing my job search on jobs that qualify for loan forgiveness. Plan C is to work 10 years in a job that qualifies for Loan Forgiveness to pay my student loans off and still keep my house.
Is there a maximum amount of student loan debt that can be forgiven? If so, does liability continue for any remaining amount not forgiven after the 10 year Plan? Is there a list of agencies and companies who are known for providing loan forgiveness jobs?
Well you’ve been dealt a crappy hand but you’ve played it well. Your approach to dealing with all of this is fantastic.
I’m assuming all of this student loan debt is federal loans. Under the Public Service Loan Forgiveness program your federal student loans can be 100% forgiven after you make 120 on-time payments on the debt as long as the loans are consolidated into a Direct Loan. Income driven repayment on the Direct Loan will count as well. Even your $0 per month IBR payment counts.
There is no limit for the amount of federal student loan debt that can be forgiven. The only catch for you will be to make sure you work for an employer that gives you at least 30 hours of work per week and will qualify to count towards the Public Service Loan Forgiveness.
In general, the following employers will qualify:
- Government organizations at any level (federal, state, local, or tribal).
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code.
- Other types of not-for-profit organizations that provide certain types of qualifying public services.
- Serving in a full-time AmeriCorps or Peace Corps position also counts as qualifying employment for the PSLF Program.
To make certain your employment is counting towards your loan forgiveness, you might want to complete the Employment Certification for Public Service Loan Forgiveness form.
As you’ve noted, the balance of your loans will continue to grow while you are on an income driven plan. I would suggest you read Why Income Based Student Loan Payments Can Be a Terrible Trap. But considering your goal is to work for a qualifying employer and pursue the 120 qualifying payments for total loan forgiveness, the growing balances is less of a concern.
However, it is something to keep in the back of your mind during the next ten years. If for some reason you bailed out of the IBR or found yourself in default, that big and growing balance will come back to bit you.