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As you probably read in one of my previous articles on this topic, the program in which the government will pay off your federal student loans is called The Federal Student Loan Repayment Program. It’s run by the Office of Personnel Management (www.OPM.gov). Here is a direct link to more information about the program.

www.opm.gov/oca/pay/studentloan/index.asp

Fact Sheet, Q&As and Annual Report to Congress

At the website, be sure to click on the Fact Sheet and the Questions & Answers on the left side of the page for additional details. But to answer your question, in a nutshell, any participating federal agency for which you might work can help pay your student loans through this program, as long as that agency participates in this program. Each year, participating agencies report to Congress about their activities in paying off employees’ loans. The 2008 Report to Congress from the Federal Student Loan Repayment Program is the most recent report available. Here is a link to that 38-page report. www.opm.gov/oca/pay/studentloan/html/CY2008StudentLoanRepaymentReport.pdf. In it, you will find listings of every single government agency that participated in the Federal Student Loan Repayment Program for that year.

For more information about this program and about paying off student loans, be sure to read a copy of my book, Zero Debt for College Grads: From Student Loans to Financial Freedom.

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A subscriber wants to know if he should get married even though his girlfriend has a lot of debt.
Click now to hear Lynnette’s answer.

In the current economic environment, one impact of the credit crunch is that it’s getting harder than ever to obtain loans of all kinds, including student loans. Unfortunately, millions of Americans rely on loans to pay for a college education. That’s why roughly $730 billion in federal and private student loans are outstanding, and only 40 percent of it is currently being repaid, according to FinAid.org, which tracks student loans.

If you require loans to pay for your education – or your child’s – you need to arm yourself with information to be a smart borrower. Here are five facts you should know in order to do just that.

Fact #1: You can eliminate or reduce student loans by squeezing more free financial aid out of a school

Slash your need for student loans by getting your college to give you a better financial aid package – especially scholarships, grants or work-study awards. You may be able to do this if your family situation has changed substantially since you applied for aid (i.e. a divorce among the parents, a death of the family’s main breadwinner, serious illness, etc.).

At your request, a helpful financial aid counselor may also reconsider your initial financial aid award if you can demonstrate that the package offered is significantly less (at least $2,000 or so) than the cost of attending the school.
Fact #2: Student loan rates and terms are negotiable

Every July 1, Congress adjusts the interest rate caps charged on federal student loans. However, contrary to popular belief, Congress doesn’t “set” the rates for federal student loans. Instead, the feds impose a “maximum” interest rate that lenders can charge, then lenders set their own rates based on what the market will bear.

Therefore, if you’re willing to negotiate and ask for more favorable rates and loan terms, you can find many lenders that will agree to charge a lower rate than the federal maximum interest rate. Ask for lower interest rates based on:

a) Having payments automatically deducted from your checking/savings account.
b) Making a set number of ‘on time’ payments (24 to 48 months of on-time payments often qualifies you for a rate cut, and a few lenders will give you break even sooner).
c) Earning good grades or qualifying for any other incentive programs a lender offers.

Fact #3: If you must borrow, always seek federal loans first – not private loans

Federal student loans have better loan forgiveness, forbearance and deferment options than do private loans. They’re also much cheaper loans – and they’ll be even less costly in the near future. Right now, the federal cap on Stafford Loans, the most common type of federal student loan, is fixed at 6.8 percent for undergraduates. It’s 8.5 percent for PLUS Loans – loans awarded to graduate students or parents to pay for their kids’ education.

The good news is that any student taking out new, subsidized Stafford loans will have progressively lower interest rates now and in the future, thanks to the College Cost Reduction and Access Act of 2007. Subsidized loans are the ones where the government pays the interest on the loans while the student is in school.

For the 2010-11 school year, the interest rate on subsidized Stafford Loans gets cut to 4.5 percent. In 2011-2012, rates on subsidized federal loans drop again to just 3.4 percent. By comparison, private loans currently have variable interest rates and can average about 10 percent, depending on a student’s credit and whether or not he or she has a co-signer.

Read Facts #4 and #5 on Black Voices

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There are different kinds of government grants which you can apply for.  If you are looking for help to pay off your student loans, you can read this post, and this article too.  More information can also be found on this post. 

If you are a first-time homebuyer, you can find more information about grants which you can avail of in this article.

You can also read this article on the Best Place to Find Grants, Loans and Financing for Entrepreneurs if you are seeking information about grants for business owners.

The main types of programs that will help you eliminate student loan debt include:
* service-based work activities, such as becoming a police officer, firefighter or social worker
* volunteer work, such as joining VISTA or the Peace Corps
* working for the federal government and taking advantage of the Federal Student Loan Repayment Program
* working in the medical arena as a doctor, nurse or other specialist, in places where there is a critical shortage of healthcare experts
* enrolling in the armed services (i.e. Army, Navy, Air Force or Marines)
Read this post on how to pay off student loans fast, including getting help from student loan assistance programs. Also, refer to my book Zero Debt for college Grads for an extended list of specific programs to help you tackle student loan debt.

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