Student Loans

Student Loans
Gray Easterling

Whether it is good fiscal policy or not, and whether it has enticed college graduates to stay in Louisiana or not, the TOPS program has saved parents and students huge sums of money. In a December article in the Wall Street Journal, it was reported that there are 44 million people burdened by educational debt. While Louisiana parents and students may end up with college loans, the totals should be much less. I have a grandson living in Mississippi who would have loved to have the luxury of state assisted tuition help. There is some good news for those with debt. In certain situations, forgiveness of debt is possible. Here are some of the programs out there now.


If you work for a federal, state or local government, or a 501(C)3 nonprofit, have a federal Direct Loan, have an income-driven repayment plan, and have made 120 on-time payments, you may qualify under the Public Service Loan Forgiveness program. If you have a Federal Family Education Loan, which does not qualify, it can be consolidated into Direct Loans. Do your homework, because there has been a lot of confusion related to this program. If you are a teacher working in qualifying schools for five consecutive years, you may qualify for forgiveness of up to $17,500 on certain federal loans. If you are a nurse, firefighter, or public defender, you may be eligible for cancellation of your Perkins Loans. Generally, a portion of the loan is forgiven for each year of service, culminating in 100% of the loan being discharged after seven years. Finally, borrowers using income-driven plans for federal loans can have the balance of the debt discharged after 20 or 25 years of payments, even if you are not working in federal programs. The debt relief will be taxed as income.


There are also state and local programs available, generally tied to working in a specific occupation, living in a specified area, or both. Many of these programs cover private student loans, which federal programs do not. The Institute of Student Loan Advisors compiled a list of 115 debt forgiveness programs on the state and local level. Also, in some cases, a borrower may be able to combine a state or local program with the Public Service Loan Forgiveness plan. The occupation focused programs typically center on healthcare, education or legal services. When considering these options, consider your willingness to commit to staying put for a long period of time. One final consideration: maybe, if available, you should take a higher paying job and pay off the debt instead of a public service-oriented career offering the option of debt forgiveness. Evaluate your options. Hopefully you will be able to pursue and enjoy a career of your dreams, free of school debt, sooner rather than later.


In my morning study, I was reminded of the beauty of psalms after reading 146: “Do not put your trust in princes, who cannot save. When their spirit departs, they return to the ground; on that very day, their plans come to nothing. Blessed are those whose help is in the God of Jacob, whose hope is in the Lord their God. He is the maker of heaven and earth, the sea, and everything in them; He remains faithful forever. He upholds the cause of the oppressed and gives food to the hungry. The Lord sets the prisoners free, the Lord give sight to the blind, the Lord lifts up those who are bowed down, the Lord loves the righteous. The Lord watches over the foreigner and sustains the fatherless and the widow, but he frustrates the way of the wicked. The Lord reigns forever, your God, O Zion, for all generations. Praise the Lord.” Hope you all have a great day. Be kind to one another.


Although this information has been gathered from sources believed to be reliable, it cannot be guaranteed.  This material is intended for informational purposes only and should not be construed or acted upon as individualized tax, legal or investment advice.  FSC Securities Corporation does not offer tax or legal advice.  The views expressed are not necessarily the opinion of FSC Securities Corporation. Financial Solutions Group is a marketing name.  Financial Solutions Group is located at 128 Versailles Blvd, Alexandria, LA  71301.  We can be reached at (318) 448-3201. Securities, insurance and advisory services offered through FSC Securities Corporation, member FINRA/SIPC.