What is Student Loan Forgiveness and Where Can I Apply?

Image by AJC1 via Flickr

Your just out of college and you have a large student loan. What can you do about. Under certain circumstances the federal goverment will cancel all or part of you student loan. This is what "Loan Forgiveness" is. To qualify you must do one of these four things:

• Perform volunteer work.
• Perform military service.
• Teach or practice medicine in certain types of communities.
• Meet other criteria specified by the forgiveness program.

Volunteer Work

These volunteer organizations offer loan forgiveness:

AmeriCorps. Serve for 12 months and receive up to $7400 in stipends plus $4725 to be used towards your loan. Call 1-800-942-2677.

Peace Corps. Volunteers may apply for deferment of Stafford, Perkins and Consolidation loans and partial cancellation of Perkins Loans (15% for each year of service, up to 70% in total). Volunteers make a real difference in the lives of real people with two years of service in more than 70 developing countries. Contact the Peace Corps at 1111 20th St., NW, Washington, DC 20526 or call 1-800-424-8580 or 1-202-692-1845.

Volunteers in Service to America (VISTA). Volunteer with private, non-profit groups that help eradicate hunger, homelessness, poverty and illiteracy. Provide 1700 hours of service and receive $4725. Call 1-800-942-2677 or 1-202-606-5000.

Military

Students who are in the Army National Guard may be eligible for their Student Loan Repayment Program, which offers up to $10,000. (Note, the military and veterans' associations provide many scholarships and tuition assistance programs.

Teaching

Students who become full-time teachers in an elementary or secondary school that serves students from low-income families can have a portion of their Perkins Loan forgiven under The National Defense Education Act. This program forgives 15% of your loan for the first and second years of teaching service, 20% for the third and fourth, and 30% for the fifth. Contact your school district's administration to see which schools are eligible.

Legal and Medical Studies

Many law schools forgive the loans of students who serve in public interest or non-profit positions. For more information, contact Equal Justice Works (formerly the National Association for Public Interest Law) at 2120 L Street, NW, Suite 450, Washington, DC 20037-1541 (phone 1-202-466-3686 or fax 1-202-429-9766). The American Bar Association (ABA) also has a summary of Loan Repayment Assistance Programs (LRAP) and State Loan Repayment Assistance Programs.

The US Department of Health and Human Services offers loan forgiveness programs through the National Health Service Corps and the Nursing Education Loan Repayment Program. These programs offer loan forgiveness to physicians and registered nurses who agree to practice for a set number of years in areas that lack adequate medical care (including remote and/or economically depressed regions).

The US National Institutes of Health's NIH Loan Repayment Programs repays up to $35,000/year of student loan debt for US citizens who are conducting clinical medical research.

The US Department of Agriculture's Veterinary Medicine Loan Repayment Program (VMLRP) offers loan forgiveness of $25,000 per year for three years for veterinarians who commit to work in a veterinary shortage area for three years. The application deadline is June 30.

If you're a California resident, contact the Office of Statewide Health Planning and Development (State Loan Repayment Program, 400 R Street, Room 330, Sacramento, CA 95811; 1-916-326-3745). Other states may have similar programs.

Many hospitals and private healthcare facilities use loan forgiveness to recruit occupational and physical therapists. Contact the American Physical Therapy Association (1111 North Fairfax St., Alexandria, VA 22314-1488; 1-800-999-2782) or the American Occupational Therapy Association (P.O. Box 31220, 47200 Montgomery Lane, Bethesda, MD 20824-1220; 1-301-652-2682).

Other loan repayment programs for medical school students include:

• Nicholas J. Pisacano MD Memorial Foundation Inc. (American Board of Family Practice)
• American Academy of Family Physicians Foundation
• Disadvantaged Health Professions Faculty Loan Repayment Program
• Indian Health Service (IHS) Loan Repayment Program
• US Air Force, Army, and Navy Financial Assistance Programs
• The American Association of Medical Colleges (AAMC) maintains a database of state and other loan repayment programs for medical school students.

Other Paths to Forgiveness

Students who receive the Michael Murphy Loan to study law enforcement, law, probation and parole, penology, or other related fields are eligible to work off one-fifth per year as a State Trooper (or related law enforcement official) in Alaska. Contact the Alaska State Troopers, Director's Office Scholarship Fund, 5700 East Tudor Rd., Anchorage, AK 99507; 1-907-269-5511.

Maryland state and local government employees who earn less than $40,000 gross annually may be eligible for a loan assistance/repayment program to study law, nursing, physical and occupational therapy, social work and education. Contact the Maryland State Scholarship Administration, 16 Francis St., Annapolis, MD 21401; 1-410-974-2971 x146.

Federal Government Loan Forgiveness Programs

Perkins loans and Stafford Loans can be cancelled for full-time service as a teacher in a designated elementary or secondary school serving students from low-income families, special education teacher (includes teaching children with disabilities in a public or other nonprofit elementary or secondary school), qualified professional provider of early intervention services for the disabled, teacher of math, science, foreign languages, bilingual education, or other fields designated as teacher shortage areas, employee of a public or non-profit child or family service agency providing services to high-risk children and their families from low-income communities, nurse or medical technician, law enforcement or corrections officer, staff member in the educational component of a Head Start Program, service as a Vista or Peace Corps Volunteer and service in the Armed Forces (up to 50% in areas of hostilities or imminent danger)

These are but a few places that may suit your needs to help you pay back your student loans. There are more depending on your occupation.

Related articles

• Student Loan Forgiveness (studentloans.net)
• The Top 10 Student Loan Tips for Recent Graduates (education.com)
• Defer Student Loan Payments to Stay Afloat (usnews.com)

My Daughter's Used Car Lives On - Part 2

Image via WikipediaIt was two months ago when the subject of my daughter's possible used car purchase came up. I wrote a post describing it called "She's Buying a Car, What's Better a Rebate or Low Interest? Help Dad." In said post I described how the bane of my daughter's transportation life was starting to cough and sputter like never before. The question of replacing the 200,000+ miles 1999 Mitsubishi Galant was brought to the forefront, again.


We went shopping and got some prices but we never pulled the trigger on the purchase because with a little tinkering by a friendly, trustworthy mechanic ole' Betsy lived on another day. Till this day it's a miracle that the car is running. I am "AMAZED".


The decision has been made to wait and play it by ear till the car finally and forever packs it in. I am proud of my daughter for not having car fever and patiently waiting. Must take after Dad. 


My daughter has her used car fund in place and it's growing every month. It's fascinating that this car is running and running well. Over the years belts, gaskets, timing belts, and other minor service has been done. Yet it still has the original power train. It says something for the car makers.


I drive a 2001 Ford van with 125,000 miles on it and feel challenged to see if I can get that odometer up to 200,000 or more. The notion of driving  used cars with these kind of numbers has not been in our lives before. But with the recession and business problems, a new purchase is out of the question. In the old days I would be worried when the odometer got to 50,000 miles. Not any more.


If there has to be a bright side to this recession it's that we are relearning grandma's and grandpa's frugal ways that they learned in their depression. I can tell you that those lessons were always a part of their lives. It always stuck with them to pinch every penny and spend wisely.


Someday the next generation will point at us and what will they say. Will they say we remembered the lessons learned or did we cast them aside when things got good again. For me and mine the lessons are now a way of life. 


How about You?

Is Charlie Sheen Crazy?

Image via WikipediaLately I have been following the misadventures of our friend Charlie Sheen. Over the last 20 years Charlie's life has consisted of run ins with prostitutes, porn stars, drugs, alcohol, and domestic violence. But through his ups and downs he has managed to work and even become more successful.

Charlie Sheen is a well liked actor who has done very well for himself. He makes $2 million an episode on his popular show "Two and a Half Men". He's pushing to raise that to $3 million dollars at the current time. The movie and TV moguls are condemning him for his behavior. But are falling over each other to get him to be on their programs. The powers that be know he is a money machine when he appears in TV or movies.

Everyone is trying to figure out what makes Charlie tick. Whenever he has a crisis he manages to land on his feet and continue on. He's been removed from work presently and the show has been shut down.

Charlie's problem is he hasn't managed to escape from what's know as "Hollywooditis". It's the malady that occurs when you mix large amounts of money with idilic adoration. We have seen it many times before from our Hollywood stars. As far back as Clark Gable, misaligned values surface when a person is put on a pedestal.

It also can happen in places where people are put in the position of having large amounts of power, like our leaders in federal and state capitals. Surrounded by money and power the personal boundaries or checks and balances fall to the wayside.

We can also see these things in our own local world. We all know someone that is full of themselves because of money.

The bottom line is no one is excusing Charlie Sheen's behavior. He's demonstrating the concept of money makes you more of whatever you are. It magnifies whatever you are. If you are a jerk, money makes you a massive jerk. If you are caring, money makes you and allows you to be more caring.

Hopefully Charlie Sheen will be able to work out his demons, for his sake and his 5 children.

Related articles

• Charlie Sheen Says the Darndest Things! (eonline.com)
• Charlie Sheen technically isn't updating his own Twitter (hollywoodnews.com)
• Charlie Sheen Motivational Poster (PHOTO) (blippitt.com)

Is My Business to Small for a 401(k)?

Image via WikipediaI stop in at Forbes.com from time to time to see if Steve Forbes is making any money and check out the headlines. This time I see they have added a new blog called "Down the Road". It's written by Stuart Robertson, general manager and principal at ShareBuilder Advisors, LLC, a subsidiary of ING DIRECT. Stuarts blog will cover ideas that can help small and mid-size businesses save for retirement and save on taxes too. 

His latest post concerns the common myths associated with 401(k)'s for small business. He estimates only 15-20 percent of small businesses have a retirement plan. He says there is a general perception of these retirement plans that are mostly wrong.

Myth #1 As a small business, we don’t have enough employees: Actually, any size business can have a 401(k), even the self-employed. Any owner-only business can qualify for a type of 401(k) often referred to as an Individual 401(k) or Solo 401(k).

Myth #2 We can’t afford to offer a company match: No worries as matching is not required when offering a 401(k) plan. Not matching can reduce the amount higher earning employees including the owner can contribute to their 401(k) account (below the $16,500 2011 limit), but that’s about it. Still, matching is making its way back as many larger companies are re-adding matches as the economy picks up.

Myth #3 The tax benefits just aren’t that big of a deal: In reality, the tax benefits of a 401(k) can significantly improve a business owner’s tax situation. There are several unique advantages that can make a real difference. Let’s break them down:

• Saving limits are higher versus most any other retirement tax advantaged option. In 2011, individuals can contribute up to $16,500 tax-deferred as an employee ($22,000 if 50+ years of age) plus receive employer contributions up to $49,000 limit or $54,500 if you are 50+. These limits are inclusive of both employee and employer contributions.
• When a small business starts its first 401(k) plan, the business can receive a $500 IRS tax credit each year for the first three years (assumes you have less than 100 employees and $1,000 or more in costs. Sorry, solo(k) plans don’t qualify for this credit);
• Any employer contributions to a 401(k) (match or profit share) is deductible for the business; and

Myth#4 401(k)s are too hard to administer: Setting up a 401(k) plan is now probably easier to setup than your voice mail. How does 20 minutes of online setup and 5-10 minutes each payroll thereafter sound? Online and paper-free is not only easier, but also simpler to manage.

Myth# 5 01(k)s are just too darn expensive: Not any more. Companies can get set-up at a fraction of the cost from what they might think. Couple that with the tax credits offered by the government mentioned earlier and the tax-deferred savings that can help pad your nest egg and the plan nearly pays for itself.


There are probably other myths to conquer but these are enough to conclude that a 401(k) is right for your small company. If you have one for one company please relate the experience to us.

Related articles

• Retirement Plan Options for Small Businesses (thinkup.waldenu.edu)
• You: Pensions at Risk, States Consider Plans Like 401(k) (nytimes.com)
• 401(k) Savings: Up, But Not Enough (abcnews.go.com)
• Tips to Keep Your Retirement Plan on Track (abcnews.go.com)

Why is My Saving Account Paying Me Such Low Interest?

While preparing my taxes I was gathering my interest 1099's from my bank. I noticed that I was getting a very low rate of interest on my savings account. I remember just a few years ago when I was receiving 4 % interest on a few CD's I had. Now, banks pay somewhere around 1% interest on a CD.

Why is my interest rate so low?

Banks take our deposits and lend the money out in the form of mortgages, car loans, and personal loans. Their gross profit is the difference between the loan rate and the rate they pay depositors on saving instruments. For many years this was a small amount on average. Today the margin is much larger. In 2007 a 12 month CD yield was 4%, now the best rate you can get is 1%. A Mortgage interest rate at that time was 5%. The bank's margins, were then less.

Since the financial crisis the Federal Reserve has set interest rates at nearly nothing. Banks are able to borrow the nearly free money and loan it out at 5% and higher. The banks are under no pressure to raise the rates they are paying depositors, because of the Federal Reserve policies of low interest.

The federal banking regulators say that doing this is a way of helping banks beef up their balance sheets. They want the banks to raise capital to cushion against losses. Bank's earnings are on the rise. The financial sector earned an average $3.39 a share in the fourth quarter of 2010 vs. $1.54 in the fourth quarter of 2009. In 2007, they were earning in the $10-per-share range. I believe for the foreseeable future we are going to enjoy many more years of 1% interest at our banks.

Related articles

• How can it be that savings account interest is so little? And interest on loans is so much? It doesn't make sense to me! (johnskelton077.wordpress.com)
• Making the Most of a Low Interest Rate Environment (financialplan.about.com)

Energy Rebates on Appliances, Especially Hot Water Heaters

Image via Wikipedia
Utilizing $300 million in stimulus-funded rebates on energy-efficient appliances, consumers have bought more than half a million washers, dryers, refrigerators and other appliances. Yet despite rebates of up to $425 offered, less than 3% of those consumers bought water heaters, often considered the second-largest energy hog in the home.

That's one reason the rebate program isn't meeting the US Department of Energy's projected energy savings. Only 88% of the rebates have been spent, generating $27.5 million in annual fuel and water savings – substantially less than the projected $84 million.

The government originally projected that 19% of energy savings would come from water heater replacements, but by June 30, that number was only 5%. The national program ends in February 2012, although it has already closed in 24 states. Experts offer a number of explanations for the low numbers so far:

Weather. In most states, the rebate program launched in March or April, giving a boost to sales of cooling appliances like refrigerators and air conditioners. The Department of Energy notes that climate is a driving factor in appliance purchases.

Visibility. Most people don't think about their water heaters – until they break down. Unless there's a puddle on the floor, a new water heater isn't a consideration for most consumers. Homeowner awareness of the warning signs of a failing water heater could help to drive the purchase of more energy-efficient appliances, before disasters strike.

Distribution. Most people directly purchase their refrigerators, washers, dryers, and dishwashers from retail stores. However, replacement water heaters are often chosen by plumbers. As individual states study the best ways to make use of remaining funds, many are communicating more actively with plumbing contractors.

State rules. The federal government allowed each state to craft its own rules for the program, based on local needs. Of all states and territories, only 29 offered specific rebates on water heaters.

The $814 billion stimulus program was designed with multiple goals, of which energy savings were just one. If you plan to purchase a new appliance – especially a water heater – prior to the program's 2012 expiration, research the costs and benefits of various energy-efficient machines. If your state is still participating, there are big savings to be reaped if you avail yourself of the Department of Energy's rebate program.

This guest post was brought your way by CareOne Credit - glad to assist you with any debt consolidation needs you may have."?