Student Loan Relief

Recognizing the need to support the student population, the Obama government introduced the Health Care and Education Reconciliation Act of 2010. Second half of this bill addresses the student loan relief situation and has made sweeping reforms in the issuance and repayment of student loans. The act has also increased the funding of several federal education grants like Pell Grants. Sections in the act have also made it easier for parents to get loans for their child's education.

The current economic recession has also played havoc on the financial condition of many students graduating with student loans and low entry-level salaries. Recent statistics have shown that individuals are paying more than 15 percent of their income towards their student loans. With the economic revival taking more time than expected, people with students loan are facing hardships. To relieve this financial burden, the administration enacted the Health Care and Education Reconciliation Act of 2010, which is popularly known as the Obama Student Loan Relief Act.

The student loan relief act was envisaged predicting that the concessions given under the act will increase market spending and in turn cushion the economic spiral. The act has come under criticism from some quarters as people are saying that individuals who took loans were well aware of their financial obligations and these loans need not be forgiven.

One of the provisions under this act allows students who will be starting their loans in 2014 to qualify for loan repayments which are under 10 percent of their discretionary income. Currently individuals are paying as high as 15 percent of their discretionary income towards loan repayments.

The new act also states that those student who borrow after 2014 and pay their monthly due on time for 20 years will be eligible for forgiveness of the remainder of their loan amount. Under the current scenario the duration is 25 years of repayment without default.

For students opting for public service jobs like the peace corp or the military services there is a provision which states that just 10 years of on time payments is required to qualify for the Obama student loan forgiveness program. Another important step under the federal relief act cancels the practice of giving subsidies to banks and financial institutes for giving federal loans. Student loans will now be given directly by the Department of Education.

The federal student aid also runs loan relief programs that give special considerations to certain professions like teaching, law, medical and volunteer work. Eligible individuals from these professions who are working towards the betterment of the community can apply for federal student loan forgiveness programs.

Teachers
A teacher with a student loan working in a school catering to students from low income families is eligible for the loan relief program. Loan relief for teachers is also available to teachers catering to special needs students like infants, children and students with disabilities. Teachers of Foreign Language, Maths, Science, and some other areas determined by the state education agency also qualify for the loan cancellation program.

Lawyers
That there is a shortage of lawyers in the public sector is a known fact, hence lawyers who serve in the public domain are eligible for loan relief programs. Lawyers who assist nonprofit organizations should also contact their schools as they stand a chance to wipe out a portion of their student loan. Contacting the American Bar Association is also a good idea as they have information on student loan forgiveness programs.

Medical
For medical professionals carrying out research work the National Institute of Health forgives student loans up to USD 35,000 a year. Nurses and doctors who serve areas with low income families are also eligible for debt forgiveness. Veterinarians and physical therapists serving residents who do not have access to tolerable medical care qualify for student debt forgiveness programs.

Although the loan relief act has come under criticism it has helped many individuals get out of the education related debts. To get details regarding specific loan forgiveness programs, check out the National Student Loan Data System website. Individuals working as social workers or working with organizations like the Peace Corps or AmericCorps are also eligible for student loan debt forgiveness.