Government Grant Money to Pay Off Student Loans

Nothing puts a bigger dent in the thrill of getting your diploma than the realization that it will take you 20 years to pay off the student loans. Of course it was worth it, but wouldn’t it be nice if there was grant money to payoff student loans? Well, the good news is there is government grant money to pay off student loans as well as other options to make things a bit easier.

  • Student Loan Consolidation. In some cases where the student has multiple student loans, getting a consolidation loan may cut the payments by as much as 50%. Obviously this will mean a longer period of time to repay the loans (perhaps as long as 30 years), but if money is tight right out of college, this may be a smart option. Be sure to go with a reputable lender and read all the fine print. Some will not be in your best interest if they greatly increase the interest rate or have excessive fees involved.

  • Volunteering Loan Forgiveness. There are various programs in place for trading volunteer services for loan forgiveness. For example:

    • AmeriCorps – Found at http://www.americorps.gov/ are programs by which you can provide a year worth of service in return for money to pay on your student loans. Many of their programs also include a small living allowance to cover basic expenses while you are in the program.

    • VISTA (Volunteers in Service to America) - will pay off $4,725 of your loans in return for at least 1,700 hours of service. http://www.friendsofvista.org/

    • Peace Corps – Student loans are automatically deferred while you serve the 27 months (2 years service, 3 month training) in the Peace Corps. When you finish you will receive approximately $6,000 that you can use towards your student loans or for anything you want. Furthermore, there are scholarships for graduate school offered by some schools for those that have completed their service. Additionally, Perkins student loans are eligible for partial cancellation – 15% after each year first two years of service and 20% for each year if you continue for a third and fourth year for a total of 70% cancellation.

There are obviously more ways than these to pay off student loans. Some are specific to the type of education, such as law school and medical school loan forgiveness programs. Others require huge commitments, such as joining the Army. Do a little research and you may just find a program that will get you out from under that 20 year financial obligation.

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