Let’s be honest, paying back your student loans can be a stressful situation. At the end of the day it doesn’t matter how or for what reason you’ve accumulated your massive student loan debts, you just know that you have a student loan balance that remains which you are reluctant to pay, especially if you’re caught in the student loan hoax.
The Student Loan Hoax
As soon as you left undergraduate school, you should have quickly found that the entire system of accruing “good debt” (i.e. student loans) in order to pay for a college degree that would allow you to find your dream job was a giant hoax. And now you’re stuck. According to an article written for the Washington Post, “only 27% of college graduates have jobs relating to their major.”
After leaving college, it seemed as though your student loan payments sneaked up on you. And it seemed as though your student loan payments became due even before accepting the HR department’s low-paying offer in your first job that was in no way related to your degree…if you were even lucky to find employment. There was no way that you were prepared to begin paying off your student loans under the standard student loan repayment plan.
But, hopefully by this point in your career you’ve cracked the code of this hoax. At the expense of having a massive load of student loan debt you have now learned that the only guarantee that comes from earning a college degree is the transfer of a piece of bond paper, from the University to you, that represents the culmination of what you should have received while at college—only an education. Contrary to popular belief, the job that you were told would be on the other side of the graduation stage was not there.
Now you’re angry, with good reason.
Instead of following your high school dreams of landing the job you’d love in a career field you’d enjoy, you’re now working as a barista in the local coffee shop waiting until the economy gets better so someone can recognize your valued knowledge for which you paid tens of thousands of dollars to receive. Though, the truth of the matter is no one but yourself is going to rescue you from paying off your student loans. So why not tack action and do it, but with a twist. Hack your way out of your student loans!
How to Hack out of your Student Loans
Even though you are angry, for the most part, your student loans are here to stay. However, the good news is that you don’t have to struggle your entire life paying them. In fact, I suggest you retaliate and pay the least amount you can on your student loan debt until you are eligible to have them forgiven. Rise up and fight against the student loan hoax by hacking your way out of repaying the full amount of your student loans!
If the system allows for it, why not take advantage of it? There will be people who suggest you take the “moral high ground” by paying every cent that you borrowed but I challenge you to ask those folks, “are you going to pay my loans for me?” If their answer is no, you can immediately ignore any and all future suggestions from them.
STEP 1: Know what type of Loan(s) You Have
Before you can employ any of the tactics below, you must know which of your loans, if any, are eligible for a student loan hack. To find out, go over to the National Student Loan Data System (NSLD) website, which is the U.S. Department of Education’s central database for student aid.
This information is important to know because some of the following programs cannot be implemented if your student loans are not federally funded.
Private student loans you may have received are not federal loans and are not included in the NSLDS.
STEP 2: Get Your Student Loan Payments Manageable and as Low As Possible
Deferment or Forbearance
If you’re having trouble seeking employment, consider Deferment or Forbearance. Or, if you have the opportunity to build a business while living with your parents or some friends, do it, since you’d be technically unemployed.
A deferment is a period during which repayment of the principal and interest of your loan is temporarily delayed. Depending on the type of loan you have, the federal government may pay the interest on your loan during this period.
If you can’t make your scheduled student loan payments, but don’t qualify for deferment, a forbearance may allow you to stop making payments or reduce your monthly payment for up to 12 months.
There is no sense of stressing out to find a job just so you can pay your student loans if you trying to create a business. While your student loans are in either deferment or forbearance, next consider changing your repayment plans even before your full student loan payments kick it.
Check out the Student Aid’s summary page on deferments and forbearance.
Change Your Repayment Plan
If your student loan debt is just “too damn high,” consider a student loan repayment plan that is other than the standard repayment plan. For example, if you have Direct Loans or Federal Family Education Loan (FFEL) Program Loans, you can possibly use an income-based repayment plan to lower your payments. Monthly payments are capped at 10% of monthly discretionary income. And after 25 years of reduced payments, the remaining balance on the loan is forgiven.
There are also payment plans such as:
Graduated Repayment Plan
Extended Repayment Plan
Pay as You Earn Repayment Plan
Income-Contingent Repayment Plan, or
Income Sensitive Repayment Plan.
Check out the Student Aid’s summary table of the different payment plans for your student loans.
Student Loan Consolidation
If you have multiple student loans that have different interest rates and you want one lower fixed payment, consider a student loan consolidation into a federal Direct Loan.
The advantage of a student loan consolidation into a federal Direct Loan is that you can possibly stretch out your payments for up to thirty years, which means that the amount of your monthly payments lowers and your take-home pay increases.
In order to take advantage of any possible student loan forgiveness programs, be sure to use either the Direct Consolidation Loans Website or the StudentLoans.gov website, depending on your applicability.
Check out the details and how to apply for a direct consolidation loan on the Student Aid website.
STEP 3: Get Your Student Loans cancelled, discharged, or forgiven after 10 Years by choosing the right career!
As long as you have Direct, FFEL Program, or Federal Perkins Loans, there are plenty of options that you can use to have your student loans forgiven.
You will likely not be eligible for some of the student loan discharge conditions, such as total and permanent disability, death, or bankruptcy, even though these cases discharges 100 percent, but that’s okay.
The money discharge is in your career choice!
Since you are already employed in a career that you likely do not like, consider switching to a career that will allow you to have your massive debts discharged, reduced, or forgiven.
For example, a full-time teacher for five consecutive years in a designated elementary or secondary school or education service agency servicing students from low-income families can have up to $17, 500 discharged.
Or, an eligible public service employee can have up to 100 percent of their balance forgiven after 120 eligible monthly payments (10 years).
What type of public service jobs will qualify a borrower for loan forgiveness?
Organizations that meet the definition of “public service organization” for purposes of the PSLF Program are listed below.
- A government organization (including a federal, state, local, or tribal organization, agency, or entity; a public child or family service agency; or a tribal college or university).
- A not-for-profit, tax-exempt organization under section 501(c) (3) of the Internal Revenue Code.
- A private, not-for-profit organization (that is not a labor union or a partisan political organization) that provides one or more of the following public services:
- Emergency management
- Military service
- Public safety
- Law enforcement
- Public interest law services
- Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten)
- Public service for individuals with disabilities and the elderly
- Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations)
- Public education
- Public library services
- School library or other school-based services
STEP 4: Choose a Career that has a Student Loan Pay Back Program
If you don’t want to stick around in a public service career for 10 years just to have your loans repaid, consider a career where you received your repayment award and then transition earlier.
The Nursing Education Loan Repayment Program, “helps alleviate the critical shortage of nurses by offering loan repayment assistance,” and offers loan assistance for nurses. However, you will be required to work at either a “health care facility with a critical shortage of nurses or at an eligible school of nursing in the case of nurse faculty.”
Most branches of the military have student loan repayment programs with the added benefit of receiving a very healthy unmatched pension, if after serving you required obligation you later determine you want to continue serving 20 years of active duty service.
The Navy’s Loan Repayment Program can provide you with up to $65,000 to use toward paying off qualifying loans. The Army, which includes the Army National Guard, also has a College Loan Repayment Program that provides up to $65,000 (Army) or $50,000 (National Guard) in assistance. Check with local recruiters to learn specifics for each branch of service.
Qualified applicants under The Department of Agriculture’s Veterinary Medicine Loan Repayment Program may receive up to $75,000 in loan forgiveness — $25,000 per year for up to three years.
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.
Other Government Employee:
The Securities and Exchange Commission, Department of Justice, Department of State, and plenty other government agencies have student loan repayment programs. Consider seeking employment with a government agency and receive up to $10,000 per year for each year that you work.
You should know what type of student loans you carry because only federal student loans are eligible for many of the previous listed programs. These programs may allow you to lower your student loan payments, consolidate your loans, or have a public service entity assist with your payback.
If you choose a public service career that you’d enjoy, such as the military, not only will you gain the satisfaction of serving the public, you’ll also have a decent salary, an opportunity for world-wide travel, and a healthy pension after twenty years of active duty service.
Instead of stressing over student loan payments, choose any of the methods above to hack your way out of paying the full amount. You don’t have to pay the tens of thousands of dollars that you’re worried about, find a way to take advantage of one of the programs above. You owe it to yourself to hack your way out of the student loan hoax.
Rise up and fight back! If you think this post would be beneficial to someone you know—perhaps someone you are tired of hearing complain about paying their student loan debts—be sure to share this post with them.
Originally posted 2015-04-27 10:00:11.