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Am I eligible for student loan forgiveness?

September 25, 2012: 6:30 AM ET

I'm a public school teacher with a large student loan balance, and I have been working for 12 years. I've read that after 10 years of full-time work, any remaining student loan debt would be forgiven. How do I find out if I'm eligible? I'm not sure if I have a federal or private loan, but I'm making payments to American Education Services in Harrisburg, Penn. — Michelle M.

Your first step is to contact your loan servicer, American Education Services (AES), to identify what type of loan you have. Based on the information you provided, AES spokesperson Keith New says it's likely you have a federal guaranteed loan. If so, you may be eligible for two separate loan forgiveness programs: the Public Service Loan Forgiveness Program (PSLF) and the Teacher Loan Forgiveness Program.

The PSLF program may forgive the outstanding balance on your student loans. Depending on your loan type, you may have to convert your loan to a Direct Consolidation Loan. (AES should be able to help you with this conversion.) You are eligible for loan forgiveness once you make 120 consecutive monthly payments on your loan while working full-time as a public school teacher. New notes that only payments you've made after Oct. 1, 2007, will count towards your 120-payment requirement, so if you do qualify, it appears you have around five more years to go. (For more information on the PSLF program, go to the Department of Education website.)

The Teacher Loan Forgiveness program can cancel up to $17,500 of the remaining balance on your loan. One catch: This program is for elementary or secondary school teachers employed full-time for five consecutive years in qualifying, low-income schools. (For more information, again, go to the Department of Education's website.)

— Marc Mewshaw

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