On seventh September, 2007 a new student loan forgiveness program for non-profit employees came into effect that meant that those students that are looking for direct student loan forgiveness will now be covered under the terms of this bill. In effect, the provisions of this bill mean that direct student loan forgiveness has become a reality and certain implications will need to be understood in order to benefit from this bill.
Direct Student Loan Forgiveness Can Cancelling Entire Unpaid Loan Amount
For one, direct student loan forgiveness means that the Federal Government has allowed for cancellation of entire student’s loan outstanding amount that is still unpaid even after ten years of having performed public service. However, direct student loan forgiveness does not mean that the student is given reimbursement for those loan payments that they have made including all those payments made during ten years of having done public service.
Direct student loan forgiveness in fact, means that the borrower that is eligible for such forgiveness will not receive any checks from the Federal Government for the amount of debt still outstanding. It only means that the debt stands cancelled.
At present, the only people that are eligible for direct student loan forgiveness are existing non-profit employees that have made one hundred and twenty payments on their outstanding student loans after the first of October, 2007 at which time they should also have been employed in either non-profit organization or have been working in public service jobs.
As of now, the US Department of Education has not spelt out the exact process in regard to how eligible borrowers can opt for the direct student loan forgiveness program. This is because the first set of public service employees that will qualify for direct student loan forgiveness will only be eligible in the year 2017.
Also, to qualify for direct student loan forgiveness you need to show that you have organized and performed voluntary work, organized and performed military service and have taught, preached or practiced medicine in certain communities. Lastly, you should also show that you have thoroughly researched and met certain other direct student loan forgiveness program criteria.
Direct student loan account is opened after you are awarded a loan by participating in the Direct Loan Program. It presupposes the fact that the student has completed a FAFSA and has also signed the master promissory note or MPN.
Others that are eligible for direct student loan forgiveness include persons that have joined the military, are engaged in public education, or in emergency management or law enforcement and even in public health.