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The Ultimate Guide to Student Loan Forgiveness

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In a Nutshell

There are several federal student loan forgivness programs, for example: the Public Service Loan Forgiveness and Teacher Loan Forgiveness programs. These programs often require working a certain number of years for specific employers or in designated professions. Additionally, some borrowers may qualify for forgiveness after making payments for 20–25 years on an income-driven repayment plan. However, recent studies suggest this approach may not be effective for most borrowers seeking loan forgiveness. The Biden Administrations is working on fixing this issue.

Written by Attorney Kassandra Kuehl
Updated March 7, 2024


How Many Student Loan Forgiveness Programs Are There?

Several other long-standing student loan forgiveness programs offer debt relief for qualifying borrowers. 

Each has its own set of eligibility criteria and requirements. This includes, but isn’t limited to, programs for:

TIP: Student loan forgiveness may also be called debt cancellation or discharge. All of these terms mean the same thing — your student loan balance goes away. 

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.

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. This includes the one-time account adjustment for PSLF and IDR student loan forgiveness happening under the Biden administration.

⚠️ To qualify for the automatic one-time account adjustment (forgiveness) happening now, the Department of Education advises FFEL loan holders to consolidate their loans into a federal Direct Consolidation Loan by April 30, 2024. To learn more, read this Federal Student Aid announcement. To consolidate your loans, call your loan servicer or apply online through StudentAid.gov. ⚠️

Loan Forgiveness Programs Based on Occupation or Employer

Many of the existing student loan forgiveness programs are based on the borrower’s employer or occupation. Higher education is expensive, and public service workers often make less than their private industry counterparts. These forgiveness programs are meant to encourage skilled and educated workers to take public service jobs in government and nonprofits. 

Each program has its own set of rules. For most, you’ll undergo student loan repayment for a certain number of years or payments, after which your remaining balance will be forgiven if you’re approved for the program. To get the loan discharge, be sure to follow the program’s rules. 

If you want help understanding which option is best for you, there are free online tools you can use. For example, Savi offers a free personalized estimator you can use to view the forgiveness programs you qualify for and even enroll.

Public Service Loan Forgiveness

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. The Biden administration made some changes to the PSLF program during the pandemic/post-pandemic times to make it easier to navigate. You can read our article Public Service Loan Forgiveness for Student Loans to learn more or use the PSLF help tool from the Federal Student Aid office to see if you qualify. 

Teacher Loan Forgiveness

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. 

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. 

Student Loan Forgiveness for Healthcare Workers

Many healthcare workers also qualify for student loan forgiveness, including primary care providers, mental health professionals, nurses, and other qualified health professionals.

Healthcare workers can take advantage of several different programs, which are thoroughly outlined in our article: The Ultimate Guide to Student Loan Forgiveness Programs for Healthcare Workers.

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

Nelnet is the student loan servicer that processes disability discharges. You can apply for discharge at DisabilityDischarge.com, which is run by the Federal Student Aid office. You can also call Nelnet at 1-888-303-7818.

To learn more, read our article: What Is Total And Permanent Disability Discharge & How Do I Qualify?

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. 

Unfortunately, a recent study from the National Consumer Law Center found that: “While cancellation under IDR has been theoretically possible since 2016, reports have revealed how industry abuses and policy failures have resulted in only 32 borrowers ever successfully having their loans cancelled via IDR.” 

You read that right: Just 32 borrowers have successfully had their loans discharged after participating in one of the government’s four IDR plans: 

  • Income-Contingent Repayment (ICR) 

  • Income-Based Repayment (IBR) 

  • Pay As You Earn (PAYE) 

  • Saving on a Valuable Education (SAVE) 

    • Formerly the Revised Pay As You Earn (REPAYE) Plan

The Biden administration is planning to rectify this issue. According to The Department of Education, the administration has already approved "more than $116.6 billion in student loan forgiveness for more than 3.4 million borrowers."

To learn more about the different types of income-driven repayment plans, check out our popular Guide To Income-Driven Student Loan Repayment Plans.

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What’s Happening with the Biden-Harris Student Loan Debt Plan? 

In August 2022, the Biden-Harris administration and the U.S. Department of Education announced a student loan forgiveness plan. The program was to be open to most federal student loan borrowers whose annual income for 2020 or 2021 was either below $125,000 (for individuals) or $250,000 (for couples or heads of households).

Unfortunately, the Supreme Court shot down this proposed program in the Summer of 2023. After a three and a half year payment pause, student loan interest begins accruing in September of 2023 with monthly student loan payments beginning again in October of 2023.

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.

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.



Written By:

Attorney Kassandra Kuehl

LinkedIn

Kassandra is a writer and attorney with a passion for consumer financial education. Outside of consumer law, she is focused on pro bono work in the fields of International Human Rights Law, Constitutional and Human Rights Law, Gender and the Law. Kassandra graduated from Universi... read more about Attorney Kassandra Kuehl

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