Obscanity: You'll know it when you see it

Cross-posted from my Hubpages article, though I’ve posted the text below for preservation’s sake:

If you’re graduating with a mountain of student loans some time in the near future (or recent past), you should be aware of a new federal student loan forgiveness program (a part of the new “College Cost Reduction and Access Act“) designed to ease the burden of education debt and encourage new graduates to pursue work in the public sector.

What Kind of Debt Is Eligible For Forgiveness?

The loan forgiveness program applies to Stafford, PLUS and federal consolidation loans made through the U.S. Education Department’s Direct Loan program. In case your federal loans were borrowed through another lender, you should be happy to learn that as of Tuesday, July 1, 2008, any federally guaranteed student loan can be converted into a Direct Loan consolidation loan so the borrower can qualify for the debt forgiveness program [PDF].

Federal loans have the added benefit of allowing graduated payments so that your monthly payment amount is commensurate with your income. Since public sector jobs tend not to pay as much as those in the private sector, you’ll pay less over those ten years than you would have if you made more money, and a greater portion of the principal balance will be forgiven at the end of the ten-year period.

Who Can Qualify For This Program?

According to a recent article in the LA Times, the new loan forgiveness program is open to “anyone who works full-time for a state, federal or local government — including police officers, firefighters, the military and public school teachers. It also applies to some people outside of government, including employees of tax-exempt, nonprofit organizations and those working in emergency services, public interest law or public child care, healthcare or social work.”

The Bottom Line

If you’re graduating with minimal student loan debt, this program may not be the optimal solution for you, although the public can always use more talented professionals.

However, college education costs are growing by the minute, especially if you are working toward an advanced degree (since you’ve still got your undergraduate loans to deal with, too!). If you will be graduating with a seemingly insurmountable amount of federal student loan debt, this program might be the answer for you, as long as you are willing to devote the first ten years of your career to working for the public good.

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