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Options for Reducing Student Loan Debt for Those Choosing Public Service Careers
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He also pointed out that public service is broadly defined and includes any government and nonprofit organization job. A public health job would qualify, he and other advisers said.
But there is one caveat: The amount forgiven will probably be treated as taxable income, which could lead to a whopping federal income tax bill after 10 years. Presumably, though, the savings will outweigh the tax liability. Congress could end up excluding such loan forgiveness from taxable income by the time it becomes an issue, the advisers said.
Scott D. Prince, a student loan expert who runs Boston-based Prince Consulting Services, also advised Wheeler and other students in her position to look beyond these two programs.
Some states, such as Massachusetts, offer loan forgiveness programs, so be sure to contact your state higher education organization. Also check with your school and employer about programs they have available, he said.
In addition, graduates in certain professions, such as teaching and child care, could qualify for other federal student loan forgiveness, Prince said.
Frank Ruffing, a McLean-based certified financial planner and investment adviser, said Wheeler is taking a good first step by considering her repayment options even though she has another year of school to go.
"Don't borrow money without a clear plan for paying it back," he said. "You won't hear that from the schools or lenders, so it's up to parents to impress that on their children. A college education is too costly to buy on the cuff, even for highly paid careers."
