A Guide to Student Loan Repayment & Forgiveness Programs for Telecommuters

Student loan repayment is a daunting task for most college graduates. With student debt hitting an all-time high of $1.77 trillion in 2022, and the cost of goods and services rising by 7.1 percent in the same year, it’s no surprise that many Americans struggle to make minimum monthly student payments, let alone pay for basic necessities and save for emergencies.

A 2021 survey by Pew Charitable Trust showed that nearly one-third of all federal student loan borrowers have defaulted on their loans. Moreover, 44 percent of Americans say they do not have $1,000 in savings to cover an unexpected bill. Fortunately, there’s good news on the gloomy financial horizon for those with student loan debt: the rising trends of remote work and public support for student loan repayment and forgiveness programs.

The rise of the gig economy and the normalization of remote work have helped create exciting new opportunities for individuals to achieve a more sustainable work-life balance, supplement their income, and help them pay off student loan debt quicker. For example, many remote workers no longer need extra hours or a career switch; these flexible options allow people to gain additional revenue streams and reduce commuting costs, resulting in faster loan repayment.

Many office jobs became remote at the beginning of the Covid-19 pandemic, and the trend is here to stay. According to the U.S. Government Accountability Office (GAO), most work can be done remotely, citing a report that shows that 80 percent of employment was remote during the pandemic. In early 2023, data scientists show that 25 percent of all jobs will be remote. Financially, remote workers often qualify for tax deductions, which equals more money to pay off debts.

This guide discusses numerous loan repayment and forgiveness programs and how working remotely can help reduce the financial burden of student loans. Through simple strategic financial planning, remote workers can focus on building successful careers while working from anywhere in the world.

In short, loan forgiveness and repayment plans provide sustainable ways to manage student loan debt and help people gain control of their financial futures. While it’s true that the average student loan debt balance is approximately $40,000, loan forgiveness and repayment programs offer benefits for borrowers to reduce their debt burden.

Federal and private loan repayment and forgiveness plan benefits include:

• Lower monthly payments
• Reduced overall loan balances
• Complete loan forgiveness
• Staying in good standing with lenders
• Personal finance awareness
• Higher credit scores
• Accessibility to lower interest rates for mortgages and auto loans

By paying off debt faster, borrowers can gain more financial freedom by eliminating high-interest payments and freeing up more income for savings and investments.

The average undergraduate carries nearly $38,000 in debt after graduation, and those with student loans have several options when facing a mountain of debt. Here are some examples of common student loan repayment and forgiveness programs.

The federal government offers several repayment plans that are tailored for those with student debt through the Public Service Loan Forgiveness Plan. These programs allow borrowers to reduce their payments and even have part of their debt forgiven if they meet specific criteria. In addition, college graduates who work for federal agencies such as non-profits, military, state, tribal or local government can benefit from the PSLF program.

Many PSLF plans are discipline-specific and recruit employees to work in underserved and rural areas in exchange for partial or complete loan forgiveness. An example includes the Nursing Education Loan Repayment Plan Program, which pays 60 percent of a nurse’s loan balance in exchange for two years of work in an area experiencing nursing shortages and 25 percent for an additional third year.

In addition, Peace Corps volunteers can be eligible for deferment, partial cancellation, income-driven repayment, or the Public Service Loan Forgiveness (PSLF) Plan while serving in their federally-funded international locations. Rules vary for each borrower; once Peace Corp volunteers have their acceptance letters, they are strongly advised to reach out to learn about student loan forgiveness options.

Income-Driven Repayment (IDR) Programs are payment plans that help borrowers manage their student loan payments based on their actual income. These plans may allow borrowers to lower their monthly payments or even have their debt forgiven after a specific time. Payments can be set as a fixed percentage of one’s discretionary income and can be adjusted when income changes. Federal loans are eligible for IDR, but private loans are not.

The office of Federal Student Aid (FSA) offers four types of IDR programs:

• Revised Pay As You Earn Repayment Plan (REPAYE Plan)
• Pay As You Earn Repayment Plan (PAYE Plan)
• Income-Based Repayment Plan (IBR Plan)
• Income-Contingent Repayment Plan (ICR Plan)

Borrowers interested in this option must fill out an application.

Many large companies offer student loan repayment assistance as a part of their benefits package. Terms vary by employer, but typically this benefit kicks in after a certain number of months in the form of monthly or annual contributions to an employee’s student loan debt balance. Annual limits typically apply.

For example, employees at Fidelity Investments who work 30 hours or more per week can get $180 monthly, and those working less can receive up to $89 monthly towards student debt assistance. There is an annual cap of $7,5000 per year per employee.

Employees are encouraged to ask their employer’s benefits team if student loan repayment assistance is an option.

Another option is refinancing and consolidating federal or private loans at lower interest rates. A borrower with a decent credit score and a steady income can reduce their monthly payments and save hundreds or thousands of dollars in interest. Nerd Wallet offers financial advice on the best student loan refinancing companies for borrowers.

A Direct Consolidation Loan is a popular option for many borrowers struggling to make monthly payments on multiple federal education loans. This type of loan allows for one or more loans to be combined into a single new loan, which often has more beneficial terms and conditions than each individual loan did separately.

Consolidation can lower the required payment amount, offer access to more flexible repayment plans, and increase your eligibility for student debt forgiveness programs. Many borrowers find that direct consolidation loans provide valuable relief when managing student debt payments.

When looking for ways to pay for college or grad school, there are other options that don’t involve going into debt. Additional resources can help fund higher education without taking out student loans.

Grants and scholarships are available for those wanting to reduce their tuition costs or pay off student loans. In addition, students can apply for scholarships from nonprofits and organizations that provide financial assistance. In most cases, grant and scholarship awards need not be repaid. The website, Scholarships360, is one of many websites for finding scholarships.

Employer tuition benefits can save students thousands of dollars and help people avoid student loans entirely. In addition, depending on the employer’s policy, tuition benefit programs can provide reduced costs, full coverage, or partial reimbursement for college courses or textbooks.

For example, UPS offers part-time employees in package handling through its Earn & Learn program, which gives students up to $5,250 per year in tuition reimbursement without restrictions on courses or subjects.

Federal work-study programs provide part-time paid work for college students through the office of Federal Student Aid (FSA). These jobs may involve working on campus in the library, cafeteria, lab, or even off-campus with a local employer.

The student debt crisis is no longer a backburner issue. In August 2022, the Biden Administration announced a three-part plan to cancel student loan debt for those earning less than $75,000 annually. But, unfortunately, the US Supreme Court blocked this debt-relief program in December 2022, devastating 26 million Americans who qualified for $20,000 in loan forgiveness.

However, there is good news: a bipartisan-approved overhaul of the Office of Federal Student Aid (FSA) was approved in 2019 and is scheduled to begin in 2023. This means more resources will be devoted to simplifying the loan application process and reforming the student debt relief and forgiveness programs.

Despite the current challenges, it’s reasonable to predict that federal student loan forgiveness will be overhauled soon. While it may provide much-needed financial relief to the 42.8 million Americans with student loan debt, borrowers are advised to continue making monthly payments.

The Covid-19 pandemic fueled the remote work trend when employees traded their cubicles for couches overnight. Remote work allows employees location independence and, for some, helps people pay off student loan debt faster. The phrase “remote workers” includes:

• Business owners
• Corporate employees
• Freelance workers
• Self-employed individuals

More and more people recognize the potential of remote work as an effective tool to help them reach those goals and make smarter financial decisions. According to international survey results published in 2022, remote workers are 20 percent happier than their in-office counterparts.

There’s never been a better time to embrace remote work, and employees are making their priorities clear to companies: give me remote work, or risk losing me.

Social movements such as the Great Resignation, which describes the critical mass of people who voluntarily quit their jobs in Spring 2021, are normalizing remote work. In addition, companies wanting to hire the most talented workers offer hybrid remote work (a work week that allows for partial remote work) or fully remote work to avoid losing the best employees to self-employment opportunities.

While remote work has a reputation for tropical locations, it includes employees who work from home part- or full-time.

Here are some everyday remote work situations and their financial benefits:

• A remote worker who stays at home benefits by reducing or eliminating commuting expenses and taking advantage of self-employment tax deductions.
• A remote worker may move closer to loved ones to an area with a lower cost of living or into a multigenerational living arrangement to care for aging family members and save money.
• A remote worker may move abroad and work wherever there’s wifi, possibly benefiting from geographic arbitrage, the practice of earning money in a strong economy and living in a location with a lower cost of living.

Relocating to an underserved area that desperately needs skills and expertise is a popular option for remote workers to contribute to social justice and reduce their student debt.

For example, many Public Service Loan Forgiveness (PSLF) programs aim to put highly-qualified professionals in underserved rural and urban areas with limited access to essential services, such as medical care and education. In these programs, workers agree to work in a rural area for a specified time in exchange for partial or complete loan forgiveness.

No matter where people choose to work, outstanding debts still must be paid (or, in the best case, forgiven). So remote work doesn’t cancel financial debt, but it does give people more agency over where they decide to live, which can reduce their cost of living.

In this way, remote work is a tremendous economic equalizer: empowering people with location autonomy, reducing expenses to pay off debt, and putting people on the path to financial freedom.

Here are some additional resources to help remote workers pay off their student loans:

• Federal Student Aid (FSA): The source for student loan policies and reform
• MERIC: A cost of living index ranking the most and least affordable states
• We Work Remotely: The largest remote work community
• Working Nomads: A remote work job search site
• You Need a Budget (YNAB): Popular with freelancers, YNAB offers free financial resources and a paid budgeting app with a loan pay-off planner
• Zippia: A remote job board site

Working remotely presents various potential financial benefits that make loan repayment more manageable. For example, maximizing income, taking advantage of tax deductions, and minimizing expenses can contribute substantially towards paying back debts faster.

Those considering this option should know that it requires careful planning to secure a position with the necessary stability for long-term success. Therefore, networking is vital when identifying suitable positions—particularly those offering loan payment assistance or other related incentives.

Nevertheless, with dedication, hard work, determination, and luck, people struggling with student loan debt can enjoy the location independence of remote work as they strive toward meeting their financial goals.

Rachel Drummond, MEd

Writer

Rachel Drummond is a freelance writer, educator, and yogini from Oregon. She’s taught English to international university students in the United States and Japan for more than a decade and has a master’s degree in education from the University of Oregon. A dedicated Ashtanga yoga practitioner, Rachel is interested in exploring the nuanced philosophical aspects of contemplative physical practices and how they apply in daily life. She writes about this topic among others on her blog (Instagram: @racheldrummondyoga).