By Kemberley Washington NEW YORK ( MainStreet) -- Yes, graduating from college is great but student loans suck! However for many grads, this is becoming a common story. According to the Consumer Financial Protection Bureau (CFPB), student loan debt has risen to more than $1.2 trillion dollars, a more than 20% increase from the year 2011. Furthermore, student loan debt is rising at an alarming rate, only second to household mortgages. Although the burden of student loan debt can be a bit overwhelming, there may be some relief in sight. The Department of Education offers the Public Service Loan Forgiveness (PSLF) program to individuals who qualify. The PSLF program allows for student loan forgiveness for borrowers who work in the area of public service full time. Federal Student Aid website.
Read: Pant Suits, Be Gone! 2.) Don't delay payments The key to forgiveness is to make certain your payments are timely. According to the Department of Education, borrowers will be granted forgiveness if they make 120 qualifying payments while employed by qualified employers. Borrowers are required to make payments within 15 days of the due date, and the payment has to exceed or equal the required payment. If a borrower has difficulty making payments, he should contact his servicer to review possible options. Periods of deferment or forbearance, which allow a borrower to cease making payments temporarily, are not qualifying payments for the purposes of PSLF. That being said, the 120 qualifying payments do not need to be consecutive. For example, if a borrower makes 10 qualifying payments, spends 6 months in an unemployment deferment, and then resumes employment with a qualifying employer and also resumes making payments, the borrower will still start at the eleventh qualifying payment when payments resume.
3.) Any student loan won't do The type of student loan will also determine whether or not it qualifies for loan forgiveness under the PSLF program. According to the Department of Education, only loans made under the Direct Loan Program - William D. Ford Federal Direct Loan - will qualify. Therefore loans made under the Federal Perkins Loan (FPL) and Federal Family Education Program (FFEL) will not qualify. However, there is a work-around. Borrowers can consolidate these loans into the Direct Loan program to take advantage of the PSLF program. But keep mind, you should do your homework or speak with a financial advisor to determine whether consolidating will make sense for your unique financial situation. Federal Student Aid website. Remember: your choice, your future. --Written for MainStreet by Kemberley Washington, a certified public accountant and professor. Follow her on Twitter or connect with her on Facebook.