Interested in Public Service? You might get a discount on your loans

The Kansas City Star has a good analysis of the provisions buried within the new College Cost Reduction Act. Read the excerpts below:

Students interested in public service jobs can get loan incentives

By STEVE ROSEN

The new federal law that revamps college education financing contains two hidden gems for students interested in civic-minded jobs.

Buried deep in the College Cost Reduction and Access Act — signed by President Bush in September — are incentives that essentially forgive thousands of dollars in federal student loan debt for graduates entering teaching, social work, public health, public interest law and other eligible public service areas.

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Here are details:

Sweet forgiveness

Students with an altruistic bent have an added incentive to pursue their passion.

Under the new Public Service Loan Forgiveness Program, borrowers who work for at least 10 years in a qualified job will be eligible to have their remaining loan balance forgiven. In other words, the balance of a student loan — meaning principal and interest — is forgiven after 120 monthly payments, or 10 years. The borrower must be current on payments.

Only students who borrow from the federal government directly qualify for this deal. Students who borrow from banks and other lenders can become eligible by consolidating their loans through the federal Direct Loan program.

According to Department of Education, eligible jobs include “full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education, social work, public interest law services, child care, and public library sciences.”

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Teaching incentive

The federal legislation also provides a spark for students who dream of teaching.

Students in education and teacher preparation programs who commit to teaching for at least four years after graduation can apply for annual grants of $4,000 to defray college costs. According to the regulations, grant money generally must be used for tuition and fees and may not exceed $16,000 for undergraduates or $8,000 for graduates.

The following fields are eligible for the grants: math, science, foreign language, bilingual education, special education and reading specialists. The Education Department said other “high need” positions may later be covered.

There’s one catch: If a student ultimately decides not to teach, the grants must be repaid.