Fifty percent of 2007 University graduates left college in debt, and on average they owed nearly $19,000 each. But if those students, and those graduating in debt this spring, choose certain careers, part of that debt can be eliminated.
Stafford and Perkins loan debt can be alleviated by the federal government for graduates participating in the Peace Corps and AmeriCorps, and fields such as education, medicine and law. Employers use loan forgiveness as way to recruit graduates into fields that do not traditionally pay large salaries.
Deb Chereck, University career center director, said the practice is a great tool for recruiting and retaining employees and benefits the students as well.
Loan forgiveness and deferral began as an incentive to get graduates to volunteer, she said. “The great thing about your generation,” she said, “is that you don’t need an incentive to serve.” Help with student debt can allow students the opportunity to volunteer without worrying about their paycheck, Chereck said.
AmeriCorps, which is part of the Teach for America program, usually provides deferral of student loans, which means a student can put off paying them for a period of time. However, the program sometimes provides a stipend that can be used for loans.
Jeff Woods, 2007 University graduate and Teach for America participant, said he received one $5,000 payment from AmeriCorps for each of the two years he taught. He didn’t have any loans, but knew people who used that money to help make their own payments.
The Peace Corps is more generous with its volunteers. Stafford loans are only eligible for deferment, but Perkins loans can be partially cancelled. Fifteen percent can be cancelled for each of the first two years of service, and 20 percent for each of the third and fourth years, which means 70 percent of a Perkins loan could be cancelled after four years in the Peace Corps.
Therefore, a student with a $10,000 Perkins loan who served four years would only have to pay $3,000.
While Perkins loans are the only ones the Peace Corps will help pay, some professions will pay any student loan in return for work in certain jobs.
Teachers who work for five years in elementary or secondary schools that serve low-income families can apply to have up to $17,500 of their Stafford loans forgiven.
Some law schools pay off the loans of students who serve in non-profit positions. The University of Oregon School of Law does this.
In the medical profession, nurses and doctors in areas with inadequate health care can have loans forgiven, as can clinical researchers and occupational and physical therapists.
In addition, the federal government has a program that can help pay off parts of any student loan. The student must work in a public service field and have made 120 payments on their loans. The government will pay for what is left of the debt.
Elizabeth Bickford, director of financial aid at the University, said, “they need to read carefully before any student starts embarking on that path,” because many of the programs require a minimum amount of service, often five years in a profession.
Chereck agreed that it can entice graduates to participate in jobs that are typically considered low-paying, such as non-profit and government work.
Bickford said loan forgiveness can be a great thing. “For the student, it’s terrific, and they are doing work that nationally people think needs to happen,” she said.
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