Research has shown that American Indians and Alaska Natives complete college at a much lower rate than the rest of the U.S. population. But finishing school often leaves students with a huge debt burden.
While there are some specific programs to help with Native American student loan forgiveness, it’s important to also research what financial aid, including scholarships and loans, is available for American Indians and Alaska Natives.
The Consumer Financial Protection Bureau estimates about a quarter of American workers might be eligible for student loan debt forgiveness, but you’ll need to meet certain qualifications in order to be eligible.
Picking a Career With Loan Forgiveness
Many states offer financial aid to Native American students attending college. Some individual colleges or state schools also offer free tuition and room and board to Native American students. For instance, Native American students who are Montana residents can qualify for a tuition waiver at Montana State University.
You could check with your school of choice about their enrollment incentives for indigenous students. The Bureau of Indian Education has a list of scholarships and grants available to Native American students as well, such as the American Indian College Fund.
If you are a Native American who has student loans, you’re in the same boat as thousands of other Americans looking into debt repayment and forgiveness. According to the U.S. Department of Education , loan forgiveness (or cancellation) is generally the term used if you are no longer required to make payments on some or all of your student loans. The specific career you choose to pursue could have a major impact on your federal student loan forgiveness eligibility.
One of the few programs that give priority to Native Americans is the Indian Health Services Loan Repayment Program . This program, part of the U.S. Department of Health and Human Services, provides funds for health professionals to help repay eligible education loans, up to $40,000 .
In exchange, health professionals agree to an initial two-year service commitment practicing in areas that serve American Indian and Alaska Native communities.
Priority enrollment in this program is given to American Indians and Alaska Natives. Professions across the healthcare spectrum, including behavioral health, dentistry, and dietitians, are eligible .
The organization says that available opportunities are based on the greatest staffing needs in Native American health facilities. Participants are also eligible to extend their contracts annually until their qualifying student debt is paid.
Public Service Loan Forgiveness
This program, offered by the U.S. Department of Education, is open to all qualified students, not just Native Americans. But some popular majors for Native American students, according to the University of Montana’s survey of their students, include business, forestry, natural resources, law, and pharmacy, many of which can lead to careers that qualify for the Public Student Loan Forgiveness Program (PSLF).
To receive loan forgiveness for work in public service, applicants must work full-time for a qualifying government agency or certain nonprofits. By paying the loan on an income-driven repayment plan, after 120 on-time, qualifying payments, the remainder of the student debt can be forgiven.
The Department of Federal Student Aid offers a PSLF Help Tool to start work on the Employment Certification Form to apply.
Serving as a full-time AmeriCorps or Peace Corps volunteer also counts as qualifying employment for the program. Loans that may be eligible to be forgiven under PSLF include any non-defaulted loans that you received under the Direct Loan Program from the government. Private loans are not eligible for any federal forgiveness plans.
Teacher Loan Forgiveness Program
For students interested in pursuing a career in teaching, if you teach full-time for five years straight in a low-income school or educational service agency, you might be eligible for up to $17,500 in student loan forgiveness on certain federal loan types.
If you don’t teach math, science, or special education, you could still receive up to $5,000 in loan forgiveness if you are a qualified full-time elementary or secondary education teacher.
This might be another great option for Native American students looking for student loan debt forgiveness by giving back to a community in need, possibly even their own.
To qualify, the school or educational agency must be listed in the annual directory , published by the Department of Education, for the years you were/are a teacher.
Lowering Your Student Loan Payments
While student loan forgiveness is often a great solution for debt relief, the sometimes complicated eligibility requirements might make it difficult for some students to be granted forgiveness, even if they do qualify.
In fact, according to a March 2019 report from the U.S. Department of Education, 1% of student borrowers who have applied for PSLF have been granted loan forgiveness. The problem with these more than 70,000 denied applications include: lack of qualifying payments, missing information, ineligible loans, and ineligible employers.
This is why it’s key to enroll in an income-driven repayment plan, so that the payments made on the loans qualify for PSLF.
With all federal student loans, even if you don’t qualify for the PSLF program, you can apply for income-driven repayment plans that could cap your monthly payments at 10% to 20% of your income, depending on the plan you qualify for (if any).
There may be some downsides to these plans, so you could research which version is right for your loans and financial situation. But if you make the required payments every month, your balance could be forgiven after 20 or 25 years.
Income-driven plans typically lower your monthly payments, but the longer the loan repayment term the more interest you’re likely to pay over the life of the loan.
If you are in need of more immediate student loan debt relief, you could also apply for forbearance or deferment, which could help you put payments on hold if you are experiencing financial hardship—but your loans will almost certainly still accrue interest, so be sure to research these options thoroughly.
Refinancing Student Loans
Another potential way to make student loans more affordable is to refinance your student loans. Refinancing provides qualified borrowers with a new loan, with a new term and (hopefully lower) interest rate, which could mean potential savings on interest or the amount you pay over the life of the loan.
A private lender like SoFi can refinance federal and private student loans, to streamline payments or possibly lower your monthly payments.
But keep in mind that if you refinance federal loans, you will no longer be eligible for any federal benefits, such as PSLF, Teacher Loan Forgiveness, income-driven repayment programs, or deferment and forbearance.
SoFi refinances loans without hidden fees, at either a fixed or variable interest rate.
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Student Loan Refinancing
If you are a federal student loan borrower you should take time now to prepare for your payments to restart, including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. (You may pay more interest over the life of the loan if you refinance with an extended term.) Please note that once you refinance federal student loans, you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans, such as the SAVE Plan, or extended repayment plans.
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Student Loan Refinancing