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Public Service Loan Forgiveness Program

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This information comes from a great web page created by the National Council of Nonprofits. It has to do with the Public Service Loan Forgiveness Program which was created by the College Cost Reduction and Access Act of 2007. There might be hope for those with tremendous student loan debt yet!

1. What is the Public Service Loan Forgiveness Program?
The Public Service Loan Forgiveness Program is intended to encourage individuals to enter and continue in full-time public service employment by forgiving the remaining balance of their eligible federal loans after they satisfy the Program’s public service and loan repayment requirements. Those individuals with certain federal student loans for college (Federal Eligible Direct Loans) may qualify to have the outstanding principal balance and accrued interest cancelled under the following conditions: (a) the borrower makes 120 monthly payments on the loan after October 1, 2007; (b) the borrower is employed by a “public service organization” at the time that loan forgiveness is requested and granted, as well as during the period the borrower makes the required 120 monthly payments; and (c) the loan is not in default at the time of the request.

“Federal Eligible Direct Loans” is defined to mean a Direct Subsidized Loan, a Direct Unsubsidized Loan, Direct PLUS loan, or a Direct Consolidation Loan. Your loan documentation should identify the type of federal loan you have.

2. What is a “public service organization?”
Public service organizations include full-time jobs at a nonprofit that is a Section 501(c)(3) organization under the Internal Revenue Code. Other public service organizations include federal, state, local or tribal governments, agencies or entities; public child or family service agencies; Tribal colleges or universities; and private organizations that provide public services like emergency management, public safety, public interest law service, public care for children, elders or disabled, or public health, education or library services.*

3. When and how can I start counting my ten years?
The Program applies to payments made after October 1, 2007. Every month you work at a public service organization and make your loan payment on time counts towards the necessary 120 payments. Your service does not have to be consecutive however (e.g., if you worked for a nonprofit for a year, then a business for a year, and then again at a nonprofit, you just starting counting payments where you left off).

4. Do I have to keep working in the same public service job?
No. For a payment to count towards the forgiveness period, the borrower has to have been employed full-time by a public service organization when the payment was made. As noted, there are many types of public service organizations.

5. What does it mean to work full time?
“Full-time” means working in one or more public service jobs for the greater of: (a) an annual average of at least 30 hours per week, or for a contractual or employment period of at least 8 months, an average of 30 hours per week; or (b) the number of hours the employer considers full-time.

6. What if I am a teacher?
For borrowers with a contractual or employment period of less than 12 months, qualifying payments have to be made each month for all 12 months. Teachers who work on an academic year basis, often for only nine months in a year, would still be required to make payments on their loans during the summer vacation period.

7. What if I was/am an AmeriCorps or Peace Corps volunteer?
Full-time service in an AmeriCorps or Peace Corps position counts as employment in a public service job. AmeriCorps Segal Education Awards or Peace Corps transition payments used for loan repayment may qualify to meet the 120-payment requirement.

8. How do I keep track of this?
It is the borrower’s responsibility to collect and retain the documents that support eligibility for this benefit.

9. Does this just apply to loans taken by the student, or does it also apply to the loans a student’s parent(s) have taken?
For the most part, this just applies to eligible loans the student has taken directly. Parents with outstanding loans would need to contact the Department of Education to learn the conditions under which part of their loans could be forgiven.

10. What if I have further questions?
For further information on the Public Service Loan Forgiveness Program, contact Nikki Harris at the Department of Education. Telephone: (202)219-7050. Internet: Nikki.Harris@ed.gov

*This last category of private organizations providing public services do not include the following: for profit organizations, labor unions, partisan political organizations, or religious organizations (unless the activities of the religious organization are unrelated to religious instruction, workshop or any form of proselytizing).

Disclaimer: The information in this courtesy fact sheet is provided for informational purposes only and is not a substitute for expert legal, tax, or other professional advice specific to an individual’s circumstances.

Again, this information comes from the National Council of Nonprofits and I trust in their review of this program. For those of us with tremendous student loan debt – be on the lookout for more information about this program. It could be big!

A Whole Bunch of New Stuff

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Last week I asked the question of whether or not anyone has found any big bargains out in the stores. I hadn’t found anything worth buying until late last week when I came across a ridiculously marked down 47″ Vizio LCD full HDTV at Wal-Mart. After being dropped a few hundred dollars there was no question about it and I had to get that television.

Aside from the television and an extended warranty plan I also picked up the items needed to mount the TV to the wall, a new DS game (which is interesting because I really don’t have time to play the thing these days), a bunch of new books from Barnes & Noble (thanks to a gift card from my older brother), a new luxury sheet set, new pillows for my bed, a new carry-on piece of luggage and travel kit, and some minor pieces of clothing. For what it’s worth, all of my cost cutting and budgeting over the last few years allowed me to purchase these items with no concern about long-term financial burden.

So…over the past few days I’ve done my part to help kick the economy in the ass!

In the mean time, check out New Jersey Carpet Cleaning for the best carpet cleaning in the Garden State!

Good Advice: When Starting a Small Business…

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Go with what you know! Or at least that is the advice given in an article from last week’s Daily Record. Daily Record writer Abbott Koloff interviewed Sheila Bermel, owner of Good to Go, about her experience with the Small Business Development Center at Centenary College. This is her advice to aspiring entrepreneurs:

Don’t start a business without having the clients first.

A good piece of advice. The article also goes on to give some other good pieces of advice including how resumes should, “concentrate on accomplishments, such as increasing sales, rather than simply saying what a previous job entailed.” Another little piece from the article:

“We get too many resumes that look like job descriptions,” he said.

Leon Wojna, an adjunct professor at CCM, teaches accounting, business planning and other skills as part of the state’s Self-Employment Assistance program. He said people starting their own businesses should start with a realistic business plan, building on knowledge gained in previous jobs, and should not give up too quickly.

I wish I could provide a link to the article in the entry so you guys could read the entire thing, but the Gannett newspapers make you pay for their articles after they’ve been posted for longer than a week (talk about a group that needs some advice on how to treat their customers!).

Are You Finding Big Deals Out There?

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With the economy in the shitter, there is a lot of talk about how retail stores are almost being forced to drop their prices in order to bring in more revenue. The other day there was an article in the New York Times that started with a great little sentence which put this phenomenon into a concise statement:

For weeks, reluctant consumers have forced retailers to lower their prices — and lower them again and again — before they even considered opening tight wallets and purses.

Consumers have every right to be cautious with their dollars! You can read the rest of the article (which is pretty good) at your leisure, but I loved that first sentence so much that I wanted to create an entry around it.

I’ve also been looking around in the post-Christmas shopping scene looking for some good deals. As I suggested in a previous post, the post-Christmas sales are the best time to store up on stuff for next year’s holiday. I spent $25 on a new Christmas tree at Target and about $25 at Wal-Mart on Christmas cards, bags, candles, blankets, and some other stuff for next December. All of this stuff was half-price so it was a pretty good deal.

But I haven’t found any major, big ticket items that I’ve wanted to purchase. So I wonder if anyone out there has seen anything like that in their travels. Have any of you seen a big “Black Friday” type deal in any of the post-Christmas sales? Better yet, did you buy whatever item caught your eye? I think that many people will be looking for these deals, finding them, and then opting not to spend their money on the big ticket item anyway.

Times are tough and, as if they didn’t already know it, retailers are in for a rocky 2009.

Colleges Are Feeling the Pressure, Too

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Some colleges are feeling the pressure from the recession, too. The New York Times ran an article the other day talking about how private colleges are beginning to show some concern over their projected enrollments for the coming year. In fact, while early admission enrollments are dramatically up from previous years, regular admission applications are much further down than previous years.

Admissions officers nationwide point to several possible reasons for the drop in applications. Some students have pared their college lists this year. Many more are looking at less-expensive state universities. Many institutions accepted more students under binding early-decision programs, and each such acceptance drains off an average of 8 to 10 regular-decision applications. And some experts suspect that students are delaying their college plans.

I hope that the last sentence here is somewhat correct. I wrote last April about an article talking about how more students are deciding to take time off in-between high school and college. The suggestion above by the New York Times might be the proof to the previous article.

Many students would be much better served by taking this time off and getting an internship or an entry-level job somewhere. So long as high school graduates do not begin to get themselves into a mountain of debt, the option to apply to college and begin a more rigorous study is always available. Now, of course it would not be a good idea to prolong the college activities for too long. But if high school graduates are beginning to think about alternatives to the quick entrance into college, then I think that can only be a good thing.

Besides giving the students a bit more of a real world view on issues (which is often lacking in the academy), the decline in students who immediately enter college could put colleges in a new position where they have to prove the value of their education. In other words, colleges might be put in a position to have to show how each dollar spent by a student (or his/her family) can translate into real dollars earned post-graduation.

Some forward-thinking departments at the local college are already putting these facts out there – or at least trying to generate the right numbers to put out to the public. Talk about a powerful piece of information for the college applicant. Imagine being able to look at a variety of business schools and choose from the ones that have a proven track record of creating the highest paid executives? There’s some education reform that everyone can believe in…