Everybody knows there's a student loan crisis brewing, but what the solution to it might be is far from clear. It's not that there aren't a lot of ideas -- groups like FixUC have come up with viable plans, and the federal government is considering policy changes that could make student loan debt easier to bear. But for those who are nearing graduation or are already trying to service their debt, even the best of these solutions will arrive too late.
Maura Kastberg, executive director of services for RSC, a college prep company, suggests that college graduates need to face up to their loan problems sooner rather than later. "When you get out of school, the first thing to do is look at your loans," she emphasizes. "You should ask yourself what kind you have, how much you owe, and to whom you owe it."
Depending upon which types of loans students have, their repayment options can vary greatly, Kastberg notes, and one common method students use to deal with those debts can actually open the door to bigger problems. "When they graduate, many students immediately consolidate their loans," she notes. "While this can simplify things, it also can close off many loan forgiveness options."
Kastberg advises students to continue to maintain their frugal college lifestyles for awhile, even after graduation. Living on the cheap and saving that new adult paycheck can pay great dividends: the money you'll save can contribute to paying off those loans.
Taking that idea a step further, we've compiled a list of jobs that specifically give a bonus to college loan repayment. While moving to Tanzania or joining the military might not be at the top of your agenda, it's worth noting that spending a few years in some of these low-paying, service-related jobs will give you more than a valuable entry on your resume -- it might even leave you with the economic freedom to pursue the future you desire.
Escape Your Student Loan Debt
Escape from Student Loans! 8 Creative Ways to Ditch Your Debt
Many school districts are desperate for teachers to work in low-income schools or to teach in high-demand programs. In return for teaching for five years, college graduates may be able to get large portions of their loans forgiven. The exact payoff depends on the type of loan, but the benefits can be huge: Stafford loans may qualify for up to $17,500 in repayment, while Perkins loans may qualify for full forgiveness.
Facing huge amounts of student loan debt? Eager to see the world? Desperate to fill out your resume? Look no further! The Peace Corps will cancel up to 70% of Perkins student loan debt. When it comes to Stafford and consolidated loans, the deal is not quite as good -- the Peace Corps will allow full deferment for up to 27 months, but won't pay off loans. Right now, though, spending a couple of years filling out a resume and waiting to enter the job market could be a very attractive option!
For new grads who are interested in volunteering, but aren't interested in traveling halfway around the world, Americorps and VISTA could be attractive options. VISTA places volunteers with nonprofit groups, while Americorps places them in a variety of jobs, from teaching school to environmental cleanup. In return for a one-year stint, workers in both programs get stipends of up to $7,400, plus $4,725 to pay off loans.
The military offers some outstanding education resources, including the Montgomery GI Bill, which can cover more than half of the cost of a college education. For graduates facing heavy loan debts, the Army National Guard has some particularly nice options, including the Student Loan Repayment Program, which will pay up to $50,000 worth of student loans, depending upon the student's area of study.
Love working with animals, but hate being in debt? The Department of Agriculture's Veterinary Medicine Loan Repayment Program may have the answer: Qualified applicants may receive up to $75,000 in loan forgiveness -- $25,000 per year for up to three years. The only catch is that you'll probably have to get used to living in the boonies -- participants are placed in areas that have insufficient veterinary coverage.
Veterinarians aren't the only ones who can benefit from loan forgiveness -- the government also offers some great loan forgiveness options for human doctors. Health care professionals looking to have the Northern Exposure experience might consider working with the National Health Service Corps and the Nursing Education Loan Repayment Program, both of which place medical workers in underserved regions.
Nor are small towns the only place where doctors can get their loans paid off. The National Institutes of Health will repay up to $35,000 per year in loans for qualified clinical researchers, and many hospitals will help repay loans for doctors who agree to work in physical therapy, among other career tracks.
As many young law school grads have been discovering, a Juris Doctor degree is not the moneymaker it once was. Luckily, some states, including Maryland, offer loan repayment aid for state employees who have studied law. For that matter, there are several programs that will help pay off loans for lawyers who work with nonprofits or public interest groups.
If worst comes to worst, you could always try escaping from your loans by literally escaping. The French Foreign Legion, for example, not only offers the opportunity to go to foreign lands, but encourages new members choose a new identity. Enlistment is for five years, and new enlistees receive roughly $1,400 per month. After serving one stint, legionnaires may apply for French citizenship, an option that may give you legal protection from your creditors, in addition to a pretty sweet state-run universal health care system.