The Ultimate Guide to Student Loan Forgiveness

What Is Student Loan Forgiveness?

Student loan forgiveness means the government erases all or part of your federal student loan balance so you don’t have to pay it back. This can happen for many reasons, but the most common are tied to your job, public service, or participation in certain programs.

💡 The terms forgiveness, cancellation, and discharge all mean your loan is wiped out, but they’re used in different situations.

Forgiveness and cancellation usually happen when you meet certain work or service requirements, like teaching in a low-income school or working in public service for a set number of years.

Discharge typically happens when something outside your control makes repayment impossible, such as a total and permanent disability, the closure of your school while you were enrolled, or certain bankruptcy cases.

How Does Student Loan Forgiveness Work?

Most federal student loan forgiveness programs work the same way: you make payments for a set number of years while meeting specific job, service, or program requirements.

Once you’ve met those conditions, you can apply to have the rest of your loan balance erased.

⚠️ Forgiveness doesn’t happen automatically. You have to submit an application and provide proof that you qualify.

Most student loan forgiveness programs are federal government programs. This means they only apply to federal student loans, not private student loans. Further, some programs only apply to certain federal loans.

What Types of Federal Student Loans Are Eligible for Forgiveness?

• Direct Loans: (most common): Fully eligible for most forgiveness programs

• Federal Stafford Loans: Eligible for most programs

• Perkins Loans: Eligible for specific cancellation programs (though no new Perkins Loans have been issued since 2017)

• PLUS Loans: Eligible for some programs, including PSLF

Though Federal Family Education Loans (FFEL) are federal loans, they're backed by private lenders, so they aren't eligible for the most popular forgiveness programs. But there's a way around this: You can consolidate your FFEL loans with a Direct Consolidation Loan, which will then be eligible for many student loan forgiveness programs.

Who Qualifies for Student Loan Forgiveness?

The most common student loan forgiveness program is Public Service Loan Forgiveness (PSLF). Several categories of people can qualify for PSLF, including:

• Government employees (federal, state, local, or tribal government, including the military and AmeriCorps) with Direct Loans

• Qualifying nonprofit workers with Direct Loans, including medical professionals like nurses and doctors that work at qualifying non-for-profit organizations

Teachers can also qualify for Teacher Loan Forgiveness of up to $17,500 of Direct Loans or FFEL loans. You can find eligibility criteria and application instructions on the Federal Student Aid website.

Less commonly, if you've suffered a total and permanently disability, you may qualify for a Total and Permanent Disability Discharge (TPD). TPD can discharge Direct Loans, FFEL loans, and Perkins Loans.

Finally, if you've been on an income-based repayment plan, you may qualify to have your student loan balance forgiveness after 20 or 25 years of repayment, depending on when you took your loans out.

Starting in July 2026, existing income-driven repayment plans will be replaced by the Repayment Assistance Plan (RAP), which requires 30 years of repayment before borrowers can qualify for forgiveness.

How Does Public Service Loan Forgiveness Work?

The Public Service Loan Forgiveness (PSLF) program is available for people who work in government organizations or for eligible nonprofits. It’s not about your job title. It’s about who employs you. You must be a full-time employee to qualify for debt forgiveness under PSLF. You can be employed at any level of government, including federal, state, local, or tribal. But if you work for a political party or other political organization, you won’t meet the eligibility requirements for student loan forgiveness under the PSLF program. 

Other qualifying employers include:

• 501(c)(3) charitable organizations

• Full-time volunteer service in AmeriCorps

• Full-time volunteer service in Peace Corps

You must be in an income-driven repayment plan and make 120 qualifying payments to qualify for PSLF, and there are several other rules as well. You can use the PSLF help tool from the Federal Student Aid office to see if you qualify. 

How Does Teacher Loan Forgiveness Work?

The Teacher Loan Forgiveness program allows teachers who work in a qualifying low-income school for five full, consecutive years to qualify for student loan forgiveness of up to $17,500 on Direct Loans (subsidized and unsubsidized) and Federal Stafford Loans (subsidized and unsubsidized). 

To qualify for the Teacher Loan Forgiveness program, you must be considered a highly qualified teacher through the U.S. Department of Education and meet other program requirements.

Under some circumstances, you can receive forgiveness under both the Teacher Loan Forgiveness program and the Public Service Loan Forgiveness program. But the teaching service terms for eligibility can’t be served at the same time. You must be current in your loan payments to qualify for forgiveness. 

What Is the Total and Permanent Disability Discharge for Student Loans?

A discharge acts in the same way as forgiveness in that the borrower will no longer be responsible for repaying the amount that’s discharged. Discharge is just a different term used in the case of disability. If you are permanently disabled, you may be able to have your entire student loan balance discharged.

To qualify for a total and permanent disability discharge, you’ll need to provide documentation of your disability from one of three places:

• The Social Security Administration

• The U.S. Department of Veterans Affairs

• A physician

You can find full application criteria and apply for discharge through the Federal Student Aid portal.

Perkins Loan Cancellation for Teachers and School Workers

You can get up to 100% of your Perkins Loans forgiven if you’re serving full time in a public elementary or secondary school or a nonprofit elementary school.

Full-time service roles include:

• Working as a special education teacher 

• Working in schools that serve students from low-income families

• Teaching bilingual education, foreign languages, mathematics, or science

You may qualify to have your student loans deferred while you’re waiting for cancellation if you’re teaching in one of the above capacities.

This type of student loan forgiveness is limited to Perkins Loans. Low-interest Perkins Loans were given to people with exceptional financial needs, but the program ended in 2017. New Perkins Loans aren’t available, but if you’re carrying a Perkins Loan, you can still get the entire loan canceled in some situations. 

Does Enrollment in an Income-Driven Repayment (IDR) Plan Lead to Loan Forgiveness?

Theoretically, yes. If you enroll in an income-driven repayment (IDR) plan and make the required number of monthly payments (usually over the course of 20–25 years), the federal government promises to erase your remaining loan balance. 

Efforts were made under President Joe Biden to streamline forgiveness under IDR plans, but under President Trump, the existing IDR plans will be scrapped altogether. Effective July 2026, all current IDR plans will be replaced with a Repayment Assistance Plan that requires 30 years of repayment — an even longer timeline.

Student Loan Forgiveness FAQs

Changes to student loan programs have been happening quickly and often in the last few years. Here are some of the most frequently asked questions about student loan forgiveness.

How Do I Know if My Payments Are Counting Toward Forgiveness?

For PSLF, submit an Employment Certification Form annually or whenever you change jobs. This form:

• Confirms your employer qualifies

• Counts your qualifying payments to date

• Identifies any issues before you reach 120 payments

For other programs, track your progress by:

• Keeping detailed records of all payments made

• Maintaining documentation of employment/service

• Contacting your loan servicer annually to verify your status

• Using the Federal Student Aid website tools to monitor progress

Red flags that payments might not count:

• You're not in the required repayment plan

• Your employment doesn't meet program requirements

• You're in deferment or forbearance (payments typically don't count)

• Your loan servicer hasn't been properly tracking your progress

Do I Have To Pay Taxes on Forgiven Student Loans?

It depends on the type of forgiveness program. Most employment-based forgiveness programs are not taxable, including:

• Public Service Loan Forgiveness (PSLF)

• Teacher Loan Forgiveness

• Military service-related forgiveness

• Total and Permanent Disability Discharge

However, Income-Driven Repayment (IDR) forgiveness after 20-25 years is typically taxable as income in the year your loans are forgiven. This can result in a significant tax bill, sometimes called a "tax bomb." Under the new Repayment Assistance Plan starting in 2026, forgiveness after 30 years will also likely be taxable.

Does Student Loan Forgiveness Apply to Private Student Loans?

No. Neither the federal programs based on profession nor Biden’s proposed one-time student loan forgiveness applies to private student loans. If you’re struggling to repay your private student loans, you may be able to negotiate with the lender or loan servicer to get a lower monthly payment or interest rate. Unfortunately, private student loan borrowers often have fewer repayment options than federal student loan borrowers.

What’s the Difference Between Student Loan Forgiveness, Cancellation, and Discharge?

The terms forgiveness, cancellation, and discharge all mean the same thing with regard to student loans: You’re no longer obligated to pay all or part of your loan debt. Considering that Americans collectively owe $1.75 trillion in student loans, any of those words would sound good to most borrowers!

Usually, though, we use these words in different contexts. Forgiveness or cancellation usually means your debt has been erased due to your employment or service accomplishments. Discharge usually means your debt has been erased due to some circumstance beyond your control, such as disability or financial struggles leading to bankruptcy.