Student loan forgiveness programs offer borrowers the chance to eliminate some or all outstanding federal student loan debt by working in public service, for a non-profit, or meeting other criteria.
There are several main federal student loan forgiveness programs available that relieve you from having to repay a portion or even the full balance of your student loans.
This guide explains the popular student loan forgiveness options, who qualifies, how much could be forgiven, and step-by-step instructions for how to apply.
What is Student Loan Forgiveness?
Student loan forgiveness is when the balance remaining on federal student loans is eliminated, so you are no longer required to keep making payments.
The government offers student loan forgiveness programs as incentives to encourage borrowing for public service careers or provide relief if you struggle financially.
When your loan balance is forgiven tax-free after meeting program requirements, you are no longer responsible for repayment of the remaining balance, which saves you from further interest costs.
Both federal student loans and FFELP loans are eligible for government forgiveness programs. Private student loans do not qualify. Parent PLUS loans may be eligible in certain cases.
The major federal student loan forgiveness programs include:
- Public Service Loan Forgiveness (PSLF)
- Teacher Loan Forgiveness
- Perkins Loan Cancellation
- Income-Driven Repayment Forgiveness
- Total and Permanent Disability Discharge
Next, let’s review the qualification requirements and application process for these key forgiveness programs.
Public Service Loan Forgiveness (PSLF)
The PSLF program forgives your remaining federal Direct Loan balance after making 120 qualifying monthly payments while employed full-time in an eligible public service position.
PSLF Eligibility Requirements
To qualify for Public Service Loan Forgiveness, you must:
- Have federal Direct Loans (not FFELP loans)
- Work full-time for an eligible public service organization – either a U.S. federal, state, local, or tribal government entity or a not-for-profit organization
- Make 120 payments that are counted as eligible based on the guidelines, while in an income-driven federal student loan repayment plan
- Fill out and submit the PSLF application and documentation
Qualifying public service jobs include government organizations, the military, public schools/education, public libraries, public safety, and many non-profit organizations.
Payments must be made under an income-driven repayment plan and you must be working full-time in a public service role when making the 120 payments to qualify. Parent PLUS loans may be eligible if consolidated into a federal Direct Consolidation Loan.
After meeting the 120 payment and employment eligibility requirements, you can apply to have your remaining federal student loan balance forgiven.
How to Apply for Public Service Loan Forgiveness
Follow these steps to pursue public service loan forgiveness:
- Make sure your federal loans qualify and enroll in an income-driven repayment plan such as REPAYE or PAYE.
- Find and maintain qualifying full-time public service employment. Get employer certification of qualifying employment.
- Submit the PSLF form annually and when changing employers to track eligible payments towards the 120 required.
- After making 120 qualifying payments, submit the PSLF application and employment certification to apply for forgiveness.
- Receive confirmation from the Department of Education after review. Your remaining loan balance will then be forgiven tax-free!
Submitting the PSLF annual certification and staying on top of the requirements ensures you remain on track to receive full loan balance forgiveness.
Teacher Loan Forgiveness Program
The Teacher Loan Forgiveness Program provides up to $17,500 in loan forgiveness for federal and Stafford loans if you teach full-time for five consecutive years in certain specialties and schools.
Teacher Loan Forgiveness Eligibility
To qualify for teacher loan forgiveness, you must:
- Have federal Direct or FFELP Stafford loans
- Work as a full-time teacher for five years in a row at a low-income school or educational service agency
- Teach certain subject areas (math, science, special ed, etc.)
Elementary and secondary school teachers and principals may qualify. Your school’s chief administrative officer must certify you meet the eligibility requirements outlined in the Teacher Loan Forgiveness application.
After completing the fifth year of qualifying teaching service, you can apply to have from $5,000 to $17,500 of your federal student loans forgiven.
How to Apply for Teacher Loan Forgiveness
Follow these steps to pursue forgiveness through the Teacher Loan Forgiveness program:
- Complete five consecutive years of full-time teaching at a qualifying school and subject area.
- Get certification of completed service from the chief administrative officer at your school.
- Submit the Teacher Loan Forgiveness application with employment certification.
- Receive notification from the Department of Education confirming your approved loan forgiveness amount!
Meeting the eligibility requirements and deadlines is critical to qualify for up to $17,500 in loan forgiveness through this program.
Perkins Loan Forgiveness and Cancellation
Borrowers with federal Perkins Loans (no longer distributed) may qualify for partial or full forgiveness through Perkins Loan cancellation.
Perkins Loan Cancellation Eligibility
To be eligible for Perkins loan cancellation, you must:
- Have an outstanding balance on a Federal Perkins Loan
- Work full-time in certain occupations like teaching, nursing, law enforcement, or the military
- Meet the service requirements of the specific cancellation program
Based on your occupation and service length, you can earn cancellation of up to 100% of your outstanding Perkins Loan balance.
How to Apply for Perkins Loan Cancellation
To pursue Perkins Loan cancellation:
- Enroll in the Perkins cancellation program that fits your occupation. Programs provide cancellation at different annual service percentages.
- Submit Perkins cancellation forms annually or when you change jobs certifying you completed a year of qualifying service.
- After meeting the full-service requirement for complete cancellation, submit the final cancellation form to apply for full forgiveness.
- Receive notification from the loan servicer when cancellation is processed fully forgiving your remaining Perkins Loan balance.
Carefully review the cancellation options to pick the one suited for your occupation and service length completed.
Income-Driven Repayment Forgiveness
Federal student loans under income-driven repayment plans qualify for forgiveness after 20-25 years of payments based on the specific plan.
Income-Driven Repayment Forgiveness Eligibility
To receive student loan forgiveness through income-driven repayment, you must:
- Have federal Direct Loans
- Be enrolled in an income-driven repayment plan
- Make 20-25 years of qualifying monthly payments
Plans that offer forgiveness include:
- Revised Pay As You Earn (REPAYE) – 20 years
- Pay As You Earn (PAYE) – 20 years
- Income-Based Repayment (IBR) – 20 years
- Income-contingent repayment (ICR) – 25 years
Your remaining loan balance will be forgiven tax-free after making all required monthly payments over the 20 or 25-year period.
How to Get Forgiveness Through Income-Driven Repayment
Follow these steps for student loan forgiveness under income-driven repayment:
- Enroll in an income-driven repayment plan like REPAYE or IBR.
- Recertify your income and family size each year. Your payment will be adjusted based on your updated income.
- Make qualifying payments every month over the 20- or 25-year term.
- Once you make the required number of payments, your student loan servicer will discharge any balance left tax-free!
The main thing is to enroll, recertify annually, and continue making the income-based monthly payments until you hit forgiveness.
Total and Permanent Disability Discharge
Federal student loans may qualify for forgiveness through a Total and Permanent Disability (TPD) Discharge if you are unable to work due to a disability.
Total and Permanent Disability Discharge Eligibility
To receive a total and permanent disability discharge, you must:
- Be disabled and unable to work
- Have a physician certify your eligibility
- Apply for Social Security disability benefits or provide other documentation of the disabling condition
If approved, both federal and private student loans qualify for forgiveness under the TPD discharge program. Having a totally disabling condition provides relief if you are unable to earn income to repay student loans.
How to Apply for a Total and Permanent Disability Discharge
Follow these steps to apply for a student loan discharge due to disability:
- Get certification from a doctor that you are unable to work or earn an income due to your disability.
- Submit the TPD discharge application with physician certification documentation.
- Provide Social Security Administration documentation or another source verifying disability if requested.
- Get notification that the Department of Education has approved the application and forgiven your federal student loans.
Make sure supporting details confirm you meet the federal eligibility criteria for a total and permanent disability discharge if pursuing this forgiveness option.
When Can You Expect Student Loan Forgiveness?
When your student loan forgiveness application is approved, your loan servicer will notify you, and the remaining balance on your federal loans will be eliminated.
However, the timeline varies by program:
- Public Service Loan Forgiveness – After making 120 qualifying payments over roughly 10 years while working full-time in public service.
- Teacher Loan Forgiveness – Once the 5-year teaching service requirement is completed and certified.
- Perkins Cancellation – On an annual basis once service is certified, culminating in full cancellation when requirements are met.
- Income-Driven Repayment – After making 240-300 payments over a 20-25 year period.
- Total and Permanent Disability Discharge – Once approved, loans are discharged within 60 days typically.
Meeting all program criteria is critical to qualify and receive federal student loan forgiveness. Carefully check in on and track your advancement to guarantee you stay on course with satisfying requirements.
Check our post on the Fresh Start Program, you might find it useful.
Alternative Options if You Do Not Qualify for Forgiveness
If you do not qualify for federal student loan forgiveness programs, here are some options to make payments more affordable or repay loans faster:
- Enroll in an income-driven repayment plan to get payments as low as $0/month based on income.
- Request a deferment or forbearance to postpone payments temporarily if facing financial hardship.
- Refinance or consolidate loans privately to lower your interest rate. Note you will lose federal borrower benefits.
- Make extra payments when possible to pay down the principal faster.
- See if your employer offers student loan repayment assistance as a workplace employee benefit.
Do not give up if forgiveness programs do not work out. You still have alternatives to repay your student loans in a more manageable way.
Check Your Eligibility for Federal Student Loan Forgiveness
The government offers numerous student loan forgiveness and cancellation programs to provide relief to borrowers who genuinely need it. Make sure you understand the eligibility criteria and application process for each program.
Consult the Department of Education’s guidelines on qualifying employment, loans, and service periods to see if you may be eligible for forgiveness. Submitting annual documentation is crucial.
If you work in public service, teaching, or another field where loan forgiveness incentives are offered, be sure to find out if you can qualify and reduce or eliminate federal student loan debt.
Every borrower’s situation is different. But if your career and loans line up with a federal forgiveness program, it is worth learning more and applying to potentially save yourself from thousands in future repayment costs.
In Conclusion… Federal student loan forgiveness programs relieve borrowers in certain public service fields or facing financial hardships.
Having a portion or even the full remaining balance discharged can save thousands in future repayment costs. However, each forgiveness program has specific eligibility requirements and application processes that must be followed meticulously to qualify as shown in this article.
Given the complexities and implications of pursuing loan forgiveness, it is critical to conduct thorough research and seek professional guidance first.
Consult with a financial advisor to review your overall financial situation and loan details when weighing forgiveness.
Also, seek out a legal professional to ensure you understand the forgiveness program criteria and paperwork before submitting any application.
While forgiveness may seem enticing, get personalized advice to determine if it truly aligns with and benefits your circumstances, and that you complete all required steps correctly for the best chance of approval.
With wise counsel, you can make an informed decision when evaluating these federal forgiveness options.