With all the controversy surrounding college loans and their contribution to the unprecedented levels of debt across the country, a bleak picture may have been painted for some Arizona college graduates. However, even though personalbankruptcy does not discharge student loans, debt relief options do exist for some college loans.
A public program, known as the Public Service Loan Forgiveness Program, was created in 2007 to ensure that students with overwhelming federal student debt do not shy away from the public sector because of the lower salaries. The federal program assists those indebted students who have entered the public sector and worked in a government or non-profit job for 10 years by cancelling the balance of their loans at the end of the 10 year mark. This program works best with repayment programs that base payments on a percentage of the income - the lower the income the lower the monthly payment.
Not many college students are aware of this option, and may in fact avoid going into the public sector altogether because of the ratio of their income to loan payments. However, this option may allow students to save in the long run and focus on getting their dream job while still repaying their college loans.
Debt relief exists for most financial difficulties. It may just be a matter of looking in the right place. Arizona residents struggling with their finances, whether due to medical bills, credit card bills or mortgage payments, may be able to find relief. Arizona residents may want to consider taking advantage of the federal options available to them, including filing for personal bankruptcy, to discharge most of their debts and restart their financial lives with a relatively clean slate and peace of mind.
Source: New York Times, "Relief from student loan debt for public service workers," Ann Carrns, Sept. 10, 2013