Native American Student Loan Forgiveness & AssistanceJuly 9, 2021
With the cost of college on the rise, many students know they need student loans to cover funding gaps. However, even if you do end up with student loans, there are many student loan forgiveness and loan repayment assistance programs available to help people who may be struggling to pay off their student debt. Some of these programs are designed specifically to help Native Americans and Alaska Natives with student loan repayment.
Choosing a career that qualifies for loan forgiveness, provides student loan repayment assistance as a benefit, living in a state with a student loan repayment assistance program, or moving to a state for student loan forgiveness are good ways to get help paying off student loans.
Let’s take a look at some of the Native American student loan forgiveness programs available.
Public Service Loan Forgiveness
Students with federal loans can take advantage of Public Service Loan Forgiveness (PSLF) by working for a federal, state, or tribal government entity, or by doing work for a nonprofit. There are a number of employers and careers that can allow you to receive forgiveness for your remaining balance after you make 120 qualifying payments.
Popular majors for Native American students, according to a University of Montana survey, include business, forestry, natural resources, law, and pharmacy. All of these majors can lead to careers that qualify for PSLF. For example, there are student loan forgiveness opportunities for lawyers who work for a qualified employer.
Here are the requirements:
- Be employed by a federal, state, or tribal government. U.S. military service is included as a federal service, and you can also qualify if you volunteer full-time with AmeriCorps or Peace Corps.
- Work full-time for a qualified employer.
- Have Direct federal student loans. A Direct Consolidation loan can be used to qualify.
- Use an income-driven repayment plan for your loans.
- Make 120 qualifying payments. These payments don’t have to be consecutive.
Indian Health Services Loan Repayment Program
One of the programs that prioritizes Alaska Native and Native American student loan assistance is the Indian Health Services Loan Repayment Program. With this program, it’s possible to receive up to $40,000 to help repay eligible student loans.
To be eligible for this Native American student loan forgiveness program, you need to meet the following qualifications:
- Commit to provide two years of service.
- Practice in health facilities that serve Native Americans and Alaska Natives.
- Work in an area with high staffing needs and in-demand disciplines.
- Have a health profession degree and the proper licensing.
It’s possible to apply online through Indian Health Services. You need to submit your university transcripts, a copy of your license to practice, employment verification (such as a hiring letter) and your loan documentation. You also need to turn in a form documenting your tribal membership if you want priority consideration.
Tribal College or University Cancellation
For those who provide five years of service by teaching at an accredited tribal college or university, it’s possible to have your federal Perkins Loans canceled. This Native American student loan forgiveness program allows you to receive forgiveness based on how many years you’re a faculty member.
- 1st & 2nd year: 15% of the original principal loan amount, plus interest accrued during the year.
- 3rd & 4th year: 20% of the original principal loan amount, plus interest accrued during the year.
- 5th year: 30% of the original principal loan amount, plus interest accrued during the year.
As you can see, if you take advantage of this Native American student loan assistance program, you may be able to have all of your debt paid off by the end of your fifth year.
Teacher Loan Forgiveness Program
You can receive up to $17,500 in federal loan cancelation if you teach for five consecutive years in an underserved area. This Teacher Loan Forgiveness can be one way for Native American and Alaska Native students to reduce their student loan debt.
Eligibility requirements include:
- You can’t have an outstanding balance on a Federal Family Education Loan as of October 1, 1998.
- Be employed as a full-time teacher for five complete and consecutive academic years.
- Be employed at a school that serves low-income students.
- Your loans must have been made before the end of your five-year teaching service.
If you’re unable to complete a full academic year, there are some exceptions that can still allow you to receive loan forgiveness.
Military Student Loan Forgiveness
There are various military student loan forgiveness programs available to those that serve in the armed services and meet certain qualifications. Depending on the situation, you might even qualify for complete discharge of your student loans. For those looking for Native American student loan forgiveness through military service, these programs can help.
Student Loan Forgiveness Alternatives
If you have private student loans or don’t qualify for Native American student loan assistance programs, there are other ways to get immediate and long-term relief for student loan debt.
Income-Driven Repayment Plans
Income-driven repayment plans allow you to make a reduced payment, based on your income. There are four different plans, each with different features and with different requirements for student loan forgiveness of your remaining balance at the end of the repayment period.
- Revised Pay As You Earn (REPAYE): Payments generally amount to 10% of your discretionary income. Loan term is 20 years for undergraduate loans and 25 years for those with graduate or professional loans.
- Pay As You Earn (PAYE): Usually about 10% of your discretionary income, but never more than what you’d pay with 10-year Standard Repayment. Repayment is 20 years.
- Income-Based Repayment (IBR): Usually 10% of discretionary income for new borrowers as of July 1, 2014, and 15% for those who aren’t new borrowers as of that date. However, the payment will never be more than the Standard Repayment amount. Repayment is 20 years for those who meet new borrower requirements and 25 years if not.
- Income-Contingent Repayment (ICR): The lesser of 20% of your discretionary income or what you’d pay on a fixed plan over 12 years, based on your income. Repayment term is 25 years.
Most Direct federal student loans are eligible for IDR plans as long as the borrower meets the eligibility requirements. These types of student loans include:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans made to graduate or professional students
- Direct Consolidation Loans that don’t include PLUS Parent Loans
- Direct Consolidation Loans that include FFEL Stafford Loans and Perkins Loans
Student Loan Refinancing
Student loan refinancing can be a good option for those with private student loans that meet common student loan refinancing eligibility requirements.
The benefits of student loan refinancing often include helping people consolidate their student loans, earn a lower interest rate, pay off student loans faster, get a lower monthly payment, and save money long term.
If you’re interested in seeing if you can benefit, consider using ELFI’s student loan refinancing calculator to estimate your potential savings.*
Student Loan Deferment or Forbearance
If you’re worried that you can’t make a student loan payment in time or that you might default on your student loans, look into student loan deferment and forbearance. Note that while this could help you avoid the consequences of not paying student loans, interest still accrues on the loan payments postponed through forbearance. There might also be additional fees added to your loan balance. In some cases, you might qualify for IDR, which could help you avoid the fees that come with deferment or forbearance.
Refinance Your Student Loans With ELFI
ELFI offers student loan refinancing, featuring personal loan advisors who can help you through the process.* ELFI’s loan advisors are assigned to you over the life of the loan, ensuring that you’re working with someone who understands your situation and your loan. You can prequalify today with no impact on your credit to see if you’re eligible, see what interest rate you might qualify for, and what your payments might be.