Student Loans Forgiveness Programs

Did you take out loans to pay for your education? If so, you’re not alone. According to the Federal Reserve’s annual report on the economic well-being of U.S. households, 43% of college attendees take out some kind of student loan. With most repayment plans lasting 10 years or longer, you might feel the weight of debt for years after you graduate. Fortunately, student loan forgiveness programs can help you alleviate or even erase your student loan debt.

What is loan forgiveness?

Loan forgiveness erases your responsibility to repay all or part of your federal student loans based on the type of job you have. Pursuing loan forgiveness is a great way to make the weight of your student loans more bearable. If you work for the government, a not-for-profit organization, as a teacher or healthcare professional, you could qualify for one of the federal loan forgiveness programs. 

Student loan forgiveness programs

The Federal Student Aid Office lists two types of federal loan forgiveness programs: Public Service Loan Forgiveness (PSLF) and the Teacher Loan Forgiveness Program, but those aren’t the only ways to have your student loans forgiven. You can also take advantage of repayment-based forgiveness plans, forgiveness programs through your state or Department of Defense repayment for some military members (all military servicemembers fall under PSLF).

Public Service Loan Forgiveness

If you work full-time for a qualifying employer such as a U.S. government organization (federal, state, local or tribal) or a not-for-profit organization, you could qualify for PSLF. PSLF applies only to direct student loans, but you can consolidate your other federal student loans into a Direct Consolidation Loan to be able to take advantage of the program.

To qualify for PSLF, you need to maintain qualifying, full-time employment and make 120 qualifying payments within one of the Income-Based Repayment plans.

Teacher Loan Forgiveness Program

Seeing your student loan balance drop can change your life as a teacher. With the Teacher Loan Forgiveness Program, you can have up to $17,500 of your direct loans and Federal Stafford Loans forgiven. 

To qualify, you’ll need to teach for five complete and consecutive years at a low-income elementary or secondary school or at an educational services agency that helps low-income students. All schools that qualify for the Teacher Loan Forgiveness Program will be listed in the Teacher Cancellation Low Income Directory.

Income-Driven Repayment Plans

All of the income-driven repayment plans through the federal government come with a maximum repayment period of either 20 or 25 years, depending on the nature of your student loans and the plan you choose. These plans include Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR). You can check out the Federal Student Aid Office’s helpful guide to income-driven repayment to see if you qualify and which play would best fit your financial situation.

State Loan Forgiveness Programs

Many states offer student loan forgiveness and repayment programs based on your profession. The requirements and qualifications for each program vary widely, but many of the programs are meant to help teachers and medical professionals. The American Federation of Teachers provides a helpful tool to search for forgiveness programs for educators.

For medication professionals, the Health Resources & Services Administration provides cost-sharing grants for states to operate their own forgiveness program. If you work in a Health Professional Shortage Area (HPSA), you may qualify to have part of your student debt forgiven.

Because other programs vary widely by location, you should check with your state to see if there are any additional student loan forgiveness programs that you can take advantage of.

Military Repayment

While military service is considered qualifying employment for PSLF, you might have additional opportunities for repayment. The Office of Personnel Management, which oversees human resources for the federal government, permits military branches to offer student loan forgiveness as an incentive to attract and retain new recruits. You should contact your designated Military Personnel Officer or representative to see if you qualify and for application instructions.

Eligibility for forgiveness

If you view loan forgiveness in three buckets — career-based, repayment-based and special circumstances — you can determine your eligibility for one of the programs student loan forgiveness programs more easily.

For career-based forgiveness like PSLF, Teacher Loan Forgiveness or a state program, you need to work in a qualified career mentioned above, which often includes doctors, nurses, educators and lawyers. Each of these programs include different requirements on the types of organizations you can work for, where those organization can be located and for how long you have to work there.

PSLF, for instance, requires that you work at a qualifying organization while you make your 120 qualifying monthly payments. To verify your employment history, you should submit an employment certification form every year and every time you switch employers.

For repayment-based forgiveness, you’ll need to make regular payments in an income-based repayment plan for 20 to 25 years, depending on your loan and plan type.

For loan forgiveness requiring special circumstances, like repayment for military retention, you should talk to your Military Personnel Officer to see if you are eligible.

Applying for forgiveness

If you believe you meet the requirements to have your student loans expunged, you should contact your loan servicer to apply for forgiveness. They will be able to help you through the application process and give you specific feedback on the status and timing of your application. To avoid any confusion or mistakes that may harm your eligibility, continue making payments until your application is approved and you receive written notice that your loan has been forgiven.

In a nutshell

Education is a tool to make both your life and the lives of people around you better. In many ways, it’s a necessity, but that doesn’t mean you should have to spend your entire career paying for it. Student loan forgiveness programs make it possible for you to get out of student loan debt by being productive and responsible. 

If your career or repayment history makes you eligible for one of these programs, you can receive help right away. If student loan forgiveness may be in your future, follow the guidelines for your particular program carefully. Doing so will help lift the burden of debt and put you on a much healthier financial path.

Trevor Wallis

Contributing Writer

Trevor Wallis is a St. Louis-based personal finance writer who teaches people how to achieve freedom through good money practices. He’s written for The Simple Dollar, Bankrate, NextAdvisor, Rewards Credit Cards and Online Loans. When he isn’t writing, he’s roasting specialty coffee and planning new ways to use credit card rewards to explore the world with his wife and newborn son.