Alabama is home to college football, Southern pride, and numerous historical landmarks from the Civil War. Another thing Alabama has, unfortunately, is a high level of average student loan debt.
It has the dubious distinction of being one of the states hit hardest with student loan debt, ranking fifth in the greatest average amount owed by 2017 graduates at $31,861. That can be an overwhelming amount of debt for young graduates who may be seeking entry-level jobs to get their foot in the door of their particular profession.
Let’s look at what state student loan forgiveness programs Alabama offers to its residents.
An Overview of Alabama Student Loan Forgiveness
Student loan forgiveness can be a tremendous asset to graduates. It’s completely different than other methods of dealing with debt, such as low-interest student loans or interest-only payments. One way to get federal student loans forgiven is by working in a public service job. Payments will still have to be made on those loans for a minimum of 10 years though.
If Alabama student loan borrowers are looking for loan forgiveness opportunities, they’re going to have to find them on the federal level. Alabama doesn’t have any loan forgiveness programs sponsored at the state level.
Forgiveness Opportunities for Alabama Residents
Public Service Loan Forgiveness
Being a government employee in Alabama doesn’t automatically mean you qualify for public service loan forgiveness (PSLF). If it were that easy, you’d probably see a lot more students gravitating toward those professions so they could be free and clear of some of the debt they’re facing.
Let’s shine a hard light on just who can qualify for the different types of public service student loan forgiveness and how to apply.
Overall, to qualify for PSLF, you have to work for a government or nonprofit organization, and have federal loans that are owned by the U.S. Department of Education. In order to meet requirements, you also have to be a full-time worker, which is considered at least 30 hours per week.
Specifically, you have to have a federal Direct Loan – including subsidized or unsubsidized Direct Loans, a Direct Consolidation Loan, or Direct Plus Loans. Not all federal loans are Direct Loans, which is where some borrowers seeking PSLF go wrong. For example, loans from the Federal Family Education Loan Program or Federal Perkins Loan Program are not eligible unless you roll them into a Direct Consolidation Loan. Private student loans are also not eligible.
You should also be paying that loan on an income-driven repayment plan. But before that loan can be forgiven, you have to make 120 monthly payments, for a total of 10 years of payments.
You have to meet all those requirements before you can be eligible for PSLF if you’re a public service worker in Alabama.
How to Apply
To apply, you must fill out and send in the Employment Certification form right away. If you wait, you won’t be making qualifying payments. You’ll need to fill out this paperwork every year, and if you change employers you’ll have to fill it out again.
Teacher Loan Forgiveness
The teacher loan forgiveness program allows you to earn loan forgiveness if you teach for at least five years full-time in a school that meets the criteria as a low-income school or if you teach with an educational service agency. If you meet all the qualifications, you might be able to land up to $17,500 of student loan forgiveness.
In addition to meeting the teaching requirements, you must also have Direct subsidized or unsubsidized loans, or subsidized or unsubsidized Stafford loans.
You could also earn additional student loan forgiveness through being approved both for the Public Service Loan Forgiveness Program and the Teacher Loan Forgiveness Program. But the payments you send to your Direct Loan for the Teacher Loan Forgiveness Program can’t count for the 10 years of payments you need to make for the Public Service Loan Forgiveness Program. So you would still have to make 10 years of payments after you earn forgiveness through the teacher program to potentially get the public service forgiveness as well.
How to Apply
To apply, you have to fill out and give a teacher loan forgiveness application to your loan provider. If you have any doubts about whether you’ve turned in everything you’re required to, you can ask your provider what else their guidelines require.
Nurse Loan Forgiveness
Nurses are another segment of the workforce who can have their student loans forgiven. To be eligible, the borrower must be a licensed registered nurse who received their degree from an accredited nursing school in the U.S. They must also be employed full time at either an accredited nursing school or at a critical shortage facility in a location that’s deemed high-need.
To apply, you should sign up to be alerted when the application cycles for the program open back up.
Alabama residents don’t have to be left out of student loan forgiveness opportunities just because their state doesn’t have any loan forgiveness programs. They can, and should, take advantage of opportunities offered by federal loan forgiveness programs.
They can get the ball rolling by printing out the appropriate forms online, filling them out, and turning them into their loan providers. If there are any doubts about whether they have submitted everything they need, their student loan servicer should be able to give them all the necessary information to start them on their way.