Sharde Jennings dreams of being a lawyer, but the $65,000 in student loans she acquired to complete her bachelor’s degree has her contemplating teaching or any job that has a loan-forgiveness program. For an increasing number of students like Jennings, their right-out-of-college career choices are being dictated by their loan situation.
College students are graduating with record levels of debt as they’ve come to increasingly rely on student loans to meet their college expenses. The pressure to start repaying these loans is prompting many of them to consider loan forgiveness programs.
“In three years, I have accumulated around $65,000 in student loans, hence (the possibility of) me postponing law school in fear of acquiring more debt,” said Jennings, a native of Milwaukee who is graduating from Dillard University this spring.
“I am doing extensive research on financial aid packages offered by law schools because of the amount of undergraduate loan debt I have accumulated,” Jennings said.
According to Trends in Student Aid by the College Board, nearly two-thirds of students at four-year colleges and universities have student loan debt. Over the past decade, debt levels for graduating seniors with student loans more than doubled from $9,250 to $19,200.
In addition to the U.S. Department of Education’s administered provisions, there are federal loan forgiveness and service payback programs specific to particular occupations or categories of borrowers, for example, health professionals, legal professionals, teachers and even the military.
“When students graduate from undergraduate and graduate school they could have up to six figure amounts of student loan debt,” said Kevin Murphy, grants coordinator at the Louisiana Bar Foundation. “The whole concept of loan forgiveness programs is so important for students.”
Student loan forgiveness programs provide financial incentives in exchange for work commitment. These programs agree to repay a percentage of an employee’s student loan.
In July 2006, the Louisiana Bar Foundation created its Loan Repayment Assistance Program in efforts to improve the recruitment and retention of highly qualified attorneys. This program offers financial assistance of up to $5,000 annually to attorneys making less than $45,000.
“The lesson learned here is if the money is available then you will see people coming at it,” said Murphy. “The problem is there aren’t enough programs.”
Murphy advises students to explore all options before choosing a job or pursing a progressive degree.
Dallas Lee, a graduating senior at Langston University, is looking forward to teaching in a school system where his student loans can be forgiven. “I know I have to find a school district offering a great package and willing to help pay back some of my loans,” said Lee, who is from Chicago. “I know this process won’t be simple.”
Generally, loan forgiveness programs are very competitive and have a very taxing selection process filled with lengthy applications and personal interviews. Organizations such as AmeriCorps, Peace Corps, Teach for America and National Health Service Corps are designed so that students can reduce their loans through public service. Some programs seek to entice individuals to remain in a high need occupation, region or underserved facility.
“Definitely, these loan forgiveness programs are tempting for students,” said Lee. “What’s the harm of working somewhere in your field or even close, for a few years, to alleviate some of your debt?”
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