Advantages to consolidating student loans

Covered loans include Federal Direct Loans, Perkins Loans and Stafford Loans.

By volunteering with the Peace Corps, 15% of your Perkins Loan balance will be forgiven for each year of service.

As a full-time elementary or secondary school teacher in a low-income community, you can have 15% of your Perkins Loan forgiven for years one and two of employment, 20% in years three and four, and the remaining 30% in year five.

Federal Direct Subsidized and Unsubsidized Loans – and Subsidized and Unsubsidized Federal Stafford Loans – may also be forgiven if you teach an understaffed subject such as math, science, or special education or work in a school in a low-income neighborhood.

Potentially-eligible positions include those in nursing, government, police, fire and social work.

Only payments made after October 1, 2007, qualify towards earning eligibility, so borrowers won't reach the 120-payment milestone to qualify for forgiveness until 2017.

Each has its own conditions, requirements and limitations. The Public Service Loan Forgiveness Program (PSLF) is designed specifically for people who work in public service jobs, either for the government or for a nonprofit organization.

You may also be able to get all or part of your loan forgiven through certain types of volunteer work, military service or medical practice.

According to figures released by the Department of Education in August 2015, nearly 3.9 million Americans were enrolled in an income-based or income-contingent repayment plan, a 56% increase since June 2014, to deal with a collective total of more than 8 billion in outstanding debt.

The plans have a two-pronged appeal: the possibility of lower monthly payments now, plus the chance for balances to be forgiven later.

Non-federal loans (those handled by private lenders and loan companies) aren’t part of this program. Ford Direct Loan, and instead borrowed through the Federal Family Education Loan Program (FFEL) or Perkins Loan Program, you are allowed to consolidate these debts into a Direct Consolidation Loan; this new piece of consolidated debt would then be eligible for public service loan forgiveness, under the same terms as those described above.

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