Student loan debt is a significant concern for many borrowers. If you’re one of thousands who are crippled by high monthly student loan payments while trying to make ends meet, student loan forgiveness programs may be able to offer relief.
Qualifying for these programs can be challenging and requires meeting certain eligibility criteria. Unfortunately, student loan forgiveness typically isn’t available to private loan borrowers.
While there’s still a great deal of uncertainty surrounding mass loan forgiveness, and if student loans will be forgiven anytime soon, programs currently exist that you can access in the meantime. Log into your account at StudentAid.gov to sign up for alerts and see what options are available for you.
Student loan forgiveness means you’re no longer required to repay some or all of your federal student loan debt. The federal forgiveness programs are offered by the U.S. Department of Education. You qualify based on various conditions, such as your disability status, the type of work you do, or if you are the victim of education fraud.
Each federal student loan forgiveness program has different eligibility criteria. For instance, forgiveness under the Public Service Loan Forgiveness (PSLF) Program requires making 120 qualifying monthly payments while under a qualifying repayment plan and working for a qualifying employer. On the other hand, you may be eligible for Teacher Loan Forgiveness if you teach full-time for five consecutive academic years in a low-income school.
Generally, with student loan forgiveness programs, after you meet the forgiveness programs’ requirements, the remaining loan balance is canceled. If you’re uncertain if you qualify or just want to find out how to apply, contact your loan servicer. If you have a Perkins Loan, contact the loan servicer designated by your school or the school itself.
In August 2022, the Biden Administration announced up to $20,000 of forgiveness for eligible federal student loan borrowers. But the student loan forgiveness plan was blocked by a federal judge in Texas, and the Supreme Court refused to lift an injunction on debt relief from the U.S. Court of Appeals for the 8th Circuit. As of now, the future of the mass forgiveness plan remains unclear.
With all the confusion about student loan forgiveness, be on the lookout for student loan forgiveness, discharge, and cancellation scams. If you have any questions about an email, text, or phone call you receive, log into the Student Aid website to verify this information.
The average amount of federal student debt per student in the U.S. is currently $35,800, according to a 2022 report by College Board. Fortunately, federal student loan forgiveness programs come in all shapes and sizes to meet the growing financial needs of these graduates. Take a look at the seven federal forgiveness programs, how each works, and who is eligible.
Employees of a government or not-for-profit organization may qualify to receive loan forgiveness under Public Service Loan Forgiveness (PSLF). After making 120 qualifying payments under a qualifying repayment plan while working for a qualifying employer full-time, the remaining balance of your Direct Loans may be forgiven.
Registered Nurses, Advanced Practice Registered Nurses, and nurse faculty can apply for forgiveness of up to 85% of their unpaid education debt under the Health Resources & Services Administration NURSE Corps Loan Repayment Program. After two years of service as a nurse or faculty member at an eligible facility — in underserved communities at critical shortage facilities — you will receive repayment of 60% of your loans. If you participate for an additional year, you may get another 25% of loan assistance.
Income-Driven Repayment (IDR) plans provide relief in the form of lower payments if you have high federal student loan debt compared to your income and family size. If your loans aren’t fully repaid after you make payments for 20 or 25 years, any remaining balance is forgiven.
With IDR plans, your monthly payment will adjust each year based on your income and family size, and you must resubmit documentation each year proving your eligibility to remain in the IBR program. Use the U.S. Department of Education’s Loan Simulator to see if you can benefit from an IBR plan.
About 71% of all medical students that graduated in 2021, including doctors and other healthcare professionals, had an average graduate student debt of $200,000, according to the Association of American Medical Colleges.
Medical school loan forgiveness repays or forgives some or all of your student loan debt. For instance, one program for full-time medical professionals, called the National Health Service Corp (NHSC) loan repayment program, offers up to $50,000 for full-time medical experts and $25,000 for part-time medical professionals. But you must meet specific requirements, and work for two years at an approved site.
After making 120 eligible payments, you’ll need to submit another form to apply for forgiveness. In as soon as ten years, these programs can help you lower your monthly payment, shorten your loan term, and achieve tax-free forgiveness. Doctors and healthcare professionals also have access to income-driven repayment plans, public service loan programs, national and state-specific programs, as well as U.S. military programs.
Several student loan forgiveness programs are available for lawyers. Requirements vary slightly for each program, so examining them individually may help you weed out those that may not meet your specific needs.
Some programs are specifically for law graduates in the military. Others offer loan forgiveness for lawyers working in public service, for a non-profit, in the government, or for high-earning lawyers in the private sector. The American Bar Association outlines the specifics about loan forgiveness for its employees.
In appreciation of your military service, several programs offering loan forgiveness are available to military grads. Although requirements may differ, generally, if you’re employed by the military or you’ve had a qualifying public service job for the last 10 years, you may have your federal student loans forgiven.
For some programs, you must be employed in these positions full-time, or at least 30 hours per week (or what the employer considers to be full-time). Like the Public Service Loan Forgiveness (PSLF) Program, you must make 120 qualifying monthly payments under a qualifying repayment plan while working for a qualifying employer before your remaining balance will be forgiven. Private student loans are excluded.
Some additional programs available for military personnel may not include loan forgiveness, but outline repayment or deferment options.
If you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency, you may be eligible for forgiveness of up to $17,500 on your FFEL Program or Direct Loans. But if you did not teach for a full academic year, that year might still be counted toward the required five complete and consecutive academic years under certain circumstances.
If you have a Federal Consolidation or Direct Consolidation Loan, you may be eligible for forgiveness of the outstanding balance on the consolidation loan that repaid an eligible Direct Unsubsidized Loan, Direct Subsidized Loan, Subsidized or Unsubsidized Federal Stafford Loan.
Depending on the volunteer organization, you might have part or all of your student loan debt forgiven. Working as an AmeriCorps, Shared Harvest Fund, or Peace Corp volunteer or a doctor in an underserved community may qualify you for loan forgiveness and help eliminate thousands of dollars in student loan debt. Each program lists specific requirements for loan forgiveness and what the program may also include, such as a travel stipend or medical or dental coverage.
State prosecutors and public defenders willing to commit to three years of service can participate in the John R. Justice Student Loan Repayment Program offered by the U.S. Department of Justice. Participants can receive up to $10,000 per year, or a total of $60,000, to repay federal student loans. The American Bar Association (ABA) has put together a list of state loan repayment assistance programs.
Under certain circumstances, you may have your federal student loans canceled — such as if you worked for a specific amount of time in a public service job, if the school closed, if you have a serious disability, or if your school falsely certified your eligibility to receive a loan. It’s a good idea to consult with a tax professional regarding possible consequences associated with some cancellation programs. But keep in mind that the American Rescue Plan Act of 2021 made student loan forgiveness tax-free through 2025.
For Perkins Loans, the cancellation rate (including interest accrued) per completed academic year of full-time teaching or other qualifying full-time service is:
The Perkins Loan program stopped disbursing new loans in September 2017. But based on where you work and your volunteer service, it may be possible to have all or part of your Perkins Loan canceled or discharged. If you are in default for not making your repayments (you have not made any payments for 270 days or more), you may also qualify. Also, if you volunteer or provide some public service you may qualify for Perkins Loan cancellation.
If you’re a teacher, it’s possible to qualify to have up to 100% of your Federal Perkins Loan canceled if you have served full-time in a not-for-profit or public elementary or secondary school system. You must work in a school that teaches students from low-income families, be a special education teacher, or a teacher in the fields of science, mathematics, bilingual education or foreign languages, or in another field determined to have a shortage of qualified teachers by a state education agency.
To receive loan cancellation, you must be employed by the school system. Keep in mind that if you teach in a postsecondary school, there is no provision for canceling your Federal Perkins Loans.
When you can’t make your student loan repayments due to extenuating circumstances, you may qualify for student loan discharge. That means you’re no longer legally required to make your student loan repayments.
Discharge is different from student loan cancellation or forgiveness programs as these programs are typically reserved for graduates working in a specific industry or for a specific time period. There are six main federal student loan discharge programs:
Three types of false certification may qualify for discharge:
If the school you attended closed while you were still enrolled or shortly after you graduated, you may qualify for discharge of your Direct Loans, FFEL Loans, and Perkins Loans.
If you provide documentation to the U.S. Department of Veterans Affairs, the Social Security Administration, or a physician proving you have a total and permanent disability, you may qualify for discharge of your Direct Loans, Federal Family Education Loan (FFEL) Program loans, Teacher Education Assistance for College and Higher Education (TEACH) obligations, and Federal Perkins Loans.
If your school violated state laws or you feel you were misled by your school, you may qualify for discharge for all or part of your school loans through borrower defense to repayment. But you will need to prove you were misled, resulting in financial harm. Only Direct Loans are eligible for this type of discharge.
If you file for bankruptcy and can show that repaying your student loans will cause undue hardship, you may qualify for full or partial discharge due to bankruptcy. But this type of discharge is not common, and you’ll have to file a separate action called an adversary proceeding. The court may also determine that you will have to repay your loans at modified terms, like a longer repayment period with a lower interest rate.
If you pass away, your federal loans will be discharged. Relatives must provide proof of death in the form of a death certificate or a certified copy for your loans to be discharged. Parent PLUS Loans are also discharged if the parent who took out the loan on a student’s behalf or the student who benefitted from the loan dies. FFEL Loans, Direct Loans, and Perkins Loans are eligible.
Keep in mind that only authorized student loan servicers or the federal government can discharge your federal loans, and your relatives will be required to fill out an application and provide documentation.
To qualify for student loan forgiveness, discharge, or cancellation, you’ll have to meet eligibility requirements. These requirements vary based on the type of forgiveness or discharge you’re seeking, and include criteria such as your employment and the type of loan you borrowed.
For instance, to qualify for Public Service Loan Forgiveness, you’ll need to be employed full-time by a federal state, local, or tribal not-for-profit organization, have Direct Loans (or other federal student loans consolidated into a Direct Loan), and be enrolled in an income-driven repayment plan. You’ll be eligible for forgiveness after making 120 qualifying monthly payments.
Private student loans are not covered by student loan forgiveness, even if you’ve refinanced your federal loans into private loans. You can see what types of federal loans you have by logging in at StudentAid.gov.
The easiest way to apply for student loan forgiveness is to log in to your account at StudentAid.gov. From your dashboard, you’ll be able to see what forgiveness programs you qualify for and apply.
Both federal and private student loan borrowers may be eligible for student loan interest deductions. Student loan interest deduction lets you deduct the yearly interest you paid up to $2,500 on both private and federal loans in a given tax year. You can make this deduction even if you choose not to itemize.
Because private loans are funded through a private lender, they do not qualify for any student loan forgiveness programs.
The time it takes largely depends on factors such as your career and the type of loan you borrowed.
Borrowers seeking Public Service Loan Forgiveness may be eligible to have their loans forgiven after making 120 qualifying payments, or one payment per month for 10 years. But borrowers who may qualify for Teacher Loan Forgiveness may have up to $17,500 of their loans forgiven after teaching full-time for five consecutive years in a low-income elementary or secondary school.
On the other hand, if you borrowed Perkins Loans, you may be eligible to have some or all of your loans forgiven or discharged. To qualify, you’ll have to meet employment requirements or conditions such as bankruptcy, school closure, or total and permanent disability, among others.
To find out if you’re eligible for forgiveness and determine a timeline, be sure to log in to your account at StudentAid.gov to check your options.
Related: Learn more about refinancing your student loans on Credible.com