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If it seems like you’re never going to be able to pay off your student loans, it might be time to look into student loan forgiveness.
Although it can take 10, 20, or 25 years to qualify for federal student loan forgiveness, you can often have your monthly payments reduced right away. You may even be eligible to have your student loans discharged immediately if your school has closed or you’re totally and permanently disabled.
Student loan forgiveness programs
Student loan forgiveness programs are typically offered to borrowers whose monthly student loan payments consume so much of their incomes that they have little left over to live on. Forgiveness may also be available if you work for the government or at a qualifying nonprofit organization that provides a public service. There are even forgiveness programs tailored for certain professions, like teachers, nurses, and lawyers.
While many forgiveness programs only apply to federal student loans, there are a number of ways to better manage your private student loan payments.
Public Service Loan Forgiveness
In theory, Public Service Loan Forgiveness (PSLF) is the best loan forgiveness program. It provides tax-free student loan relief for graduates in public service careers after they have made 120 payments on qualified federal student loans. But many people don’t know about IDR plans, or are in the wrong repayment plan.
Eligibility
If you’re interested in applying, you must:
- Have made 120 qualified payments (the equivalent of 10 years unless you request a deferment or forbearance), after October 1, 2007, for the full amount due as shown on your bill, within 15 days of your due date, and while you have a full-time job with a qualified employer
- Use one of the income-driven repayment programs to repay your loans and if you’re on the 10-year Standard Repayment Plan, you’ll have paid your entire loan balance by the time you’ve made enough payments to qualify for PSLF
- Make payments while working full-time (30 hours per week or your employer’s definition of full-time. whichever is greater)
- Have qualified employment (includes jobs with the government and at nonprofits)
How to apply
Step 1: Submit the Employment Certification for Public Service Loan Forgiveness form each year or any time you change employers — this will be used to determine whether you are eligible for PSLF. If you are a parent repaying PLUS loans taken out on behalf of your children, your eligibility for PSLF eligibility is based on your employment, not the employment of the student on whose behalf you borrowed.
Step 2: Make sure you’re in an income-driven repayment plan that makes the most sense for you.
Step 3: Finally, while FFEL Program and Perkins loans are not eligible for PSLF, you may be able to get around this by taking out a federal Direct Consolidation Loan, which is eligible for PSLF. If you have multiple types of loans and were hoping to have them all forgiven, apply for student loan consolidation as soon as possible. That way, your monthly payments will count toward the 120 payments needed to qualify for forgiveness.
Borrowers who do not qualify for loan forgiveness under PSLF may still qualify for loan forgiveness in an IDR plan, but it will take longer — 20 or 25 years.
Income-driven repayment forgiveness (IDR)
If you don’t work for the government or a qualifying nonprofit organization, you may still qualify to have your loans forgiven after enrolling in an income-driven repayment (IDR) plan. IDR plans like IBR, PAYE, and REPAYE can reduce your monthly payments by spreading them out over many years.
Unfortunately, if you’re not a public servant, it takes at least 20 or 25 years to qualify for forgiveness in an IDR plan — it depends on the plan and the type of debt you have. Many people will pay their loans off before qualifying for loan forgiveness, and end up paying more interest in the end because they’ve stretched their payments out over a longer period of time.
If you do qualify for loan forgiveness in an IDR plan and are not a public servant, the amount forgiven is currently considered taxable income by the IRS.
If you have parent PLUS loans, the only IDR plan available to you is ICR. ICR is the least generous of all IDR plans, and you must convert your PLUS loans into a federal Direct Consolidation Loan to qualify.
Here are the basic features of each IDR plan.
REPAYE
- Available to all borrowers with eligible federal student loans (you don’t have to prove financial hardship)
- Payments are 10% of discretionary income (no cap)
- Takes 25 years to qualify for forgiveness if any loans were taken out for grad school
PAYE
- Only available if your monthly payment would be less than in standard 10-year plan (demonstrating a “partial financial hardship”)
- Must be relatively recent borrower (loans taken out since Sept. 30, 2007)
- Payments are 10% of discretionary income (but never more than 10-year plan)
- Takes 20 years to qualify for loan forgiveness
IBR
- Must be able to demonstrate “partial financial hardship”
- Payments are 10% of discretionary income if you took your first loan out on or after July 1, 2014
- Payments are 15% of discretionary income if you have older loans
- Takes 20 years to qualify for loan forgiveness (recent borrowers)
- Takes 25 years to qualify for loan forgiveness (borrowers with older loans)
ICR
- Available to any borrower with federal student loans (parent PLUS loans must be consolidated)
- Payments are 20% of discretionary income (or income-adjusted payment on 12-year plan)
- Takes 25 years to qualify for loan forgiveness
Learn More: Income-Driven Repayment: How to Find the Best Plan for You
Student loan forgiveness for teachers
There are many federal, state, and local programs that provide student loan forgiveness for teachers, although some only provide partial forgiveness. The most important programs include:
- Federal Teacher Loan Forgiveness Program: You may qualify for up to $17,500 in federal loan forgiveness after teaching full-time for five consecutive years in a low-income school or agency.
- Perkins Loans Teacher Cancellation: Up to 100% of your federal Perkins loans can be forgiven if you teach for five years in a school serving low-income families; serve as a special ed teacher; or teach a high-need subject like math, science, or a foreign language.
- TEACH Grant program: You can get up to $4,000 in TEACH grants per year to help pay for your teaching degree. That money doesn’t have to be repaid if you fulfill your obligation to teach at least four years in a high-need field or in schools that serve low-income families.
- Public Service Loan Forgiveness: As government or nonprofit employees, many teachers can qualify for PSLF after making 120 monthly payments in an income-driven repayment plan.
- State-based teacher loan forgiveness: In the hopes of attracting and retaining young teachers, a number of states operate their own forgiveness programs for teachers.
Learn More: Complete Guide to Student Loan Forgiveness for Teachers
Student loan forgiveness for nurses
Federal and state programs designed specifically for nurses can provide full or partial loan forgiveness. They include:
- Nurse Corps Loan Repayment Program: The federal Nurse Corps program pays up to 85% of the unpaid nursing education debt of selected registered nurses (RNs), advanced practice registered nurses (APRNs), and nurse faculty (NF). Applicants who are accepted into this competitive program agree to work for at least two years in areas of the country where nurses are scarce.
- The National Health Service Corps Loan Repayment Program (NHSC): Up to $50,000 in loan repayment in exchange for two years of service at approved sites that provide free or discounted services to Medicare beneficiaries and others.
- Perkins Loans Nurse Cancellation: Up to 100% loan forgiveness of Perkins loans provided incrementally over five years to nurses providing eligible service.
- Public Service Loan Forgiveness: As government or nonprofit employees, many nurses should qualify for 100% forgiveness of federal loans after making 120 monthly payments in an income-driven repayment plan.
- State-based nurse loan forgiveness: To attract and retain newly certified nurses, many states provide student loan forgiveness.
Learn More: Forgiveness and Repayment Programs for Nurses
Student loan forgiveness for lawyers
Lawyers can get help repaying their student loans up to and including forgiveness through programs including:
Public Service Loan Forgiveness (PSLF):
- Public defenders and other lawyers who work for the government or qualifying nonprofits may be eligible for 100% forgiveness after making 120 monthly payments in an income-driven repayment plan.
- State loan repayment assistance programs (LRAPs): LRAPs in more than half of U.S. states including Arizona, Florida, Illinois, Massachusetts, and New York are aimed at promoting careers in public service by providing student loan repayment assistance.
- U.S. Department of Justice Attorney Student Loan Repayment Program: You may qualify for up to $6,000 in student loan repayment assistance per year, up to a maximum of $60,000, if you’re willing to commit to work at the Department of Justice for at least three years.
- Perkins Loan Cancellation for lawyers: Working as public defender may qualify you for a full or partial Perkins Loan cancellation, depending on the type of loan you have and the date of the loan.
Learn More: Law School Loan Forgiveness and Repayment Programs
Student loan forgiveness for doctors
Like other health care professionals, doctors can often qualify for loan forgiveness if they’re working for the government or a qualified nonprofit. Student loan repayment assistance may also be provided to doctors who agree to work in areas where there are shortages of doctors or treat underserved patients.
Here are some of the best student loan forgiveness programs for doctors:
- Public Service Loan Forgiveness (PSLF): Doctors who work for the government or qualifying nonprofits may be eligible for 100% forgiveness after making 120 monthly payments in an income-driven repayment plan.
- The National Health Service Corps Loan Repayment Program (NHSC): Up to $50,000 in loan repayment in exchange for two years of service at approved sites that provide free or discounted services to Medicare beneficiaries and others.
- NIH Loan Repayment Programs: The National Institutes of Health offers eight Loan Repayment Programs (LRPs) that provide up to $50,000 a year in student loan repayment assistance to doctors and scientists with medical degrees who perform biomedical or biobehavioral research.
- State-based physician loan forgiveness: To attract and retain doctors, many states provide assistance repaying medical school debt.
Learn More: Ultimate Physician Loan Repayment Guide
Student loan forgiveness for pharmacists
Pharmacists can often qualify for loan forgiveness if they work for the government or a qualified nonprofit. Student loan repayment assistance may also be provided to pharmacists who agree to work in areas where there are not enough pharmacists.
Here are some of the best student loan forgiveness programs for pharmacists:
- Public Service Loan Forgiveness (PSLF): Pharmacists who work for the government or qualifying nonprofits may be eligible for 100% forgiveness after making 120 monthly payments in an income-driven repayment plan.
- The National Health Service Corps Loan Repayment Program (NHSC): Up to $50,000 in loan repayment in exchange for two years of service at approved sites that provide free or discounted services to Medicare beneficiaries and others.
- NIH Loan Repayment Programs: The National Institutes of Health offers eight Loan Repayment Programs (LRPs) that provide up to $50,000 a year in student loan repayment assistance to pharmacists and scientists with medical degrees who perform biomedical or biobehavioral research.
- State-based pharmacist loan forgiveness: To attract and retain pharmacists, many states provide student loan forgiveness.
Learn More: Pharmacists Student Loan Forgiveness Guide
Student loan forgiveness for dentists
If you’re a dentist who works for the government or a qualified nonprofit, you may qualify for loan forgiveness. Student loan repayment assistance may also be provided to dentists who agree to work in areas where there are not enough dentists, or who provide care to underserved populations.
Here are some of the best student loan forgiveness programs for dentists:
- Public Service Loan Forgiveness (PSLF): Dentists working for the government or qualifying nonprofits may be eligible for 100% forgiveness after making 120 monthly payments in an income-driven repayment plan.
- The National Health Service Corps Loan Repayment Program (NHSC): Up to $50,000 in loan repayment in exchange for two years of service at approved sites that provide free or discounted services to Medicare beneficiaries and others.
- NIH Loan Repayment Programs: The National Institutes of Health offers eight Loan Repayment Programs (LRPs) that provide up to $50,000 a year in student loan repayment assistance to dentists and scientists with medical degrees who perform biomedical or biobehavioral research.
- State-based dentist loan forgiveness: To attract and retain dentists, many states provide student loan forgiveness.
Learn More: Dental School Loan Repayment Guide
Student loan forgiveness for physicians assistants
Although they often take on considerable student loan debt to earn their master’s degrees, physician assistants often don’t earn as much as doctors or dentists. Fortunately, student loan repayment assistance and even forgiveness may be available. Here are some of the best options:
- Public Service Loan Forgiveness (PSLF): Physician assistants working for the government or qualifying nonprofits may be eligible for 100% forgiveness after making 120 monthly payments in an income-driven repayment plan.
- The National Health Service Corps Loan Repayment Program (NHSC): Provides physician assistants up to $50,000 in loan repayment in exchange for two years of service at approved sites that provide free or discounted services to Medicare beneficiaries and others.
- State-based physician assistant loan forgiveness: To attract and retain physician assistants, many states provide student loan forgiveness.
Other forgiveness programs
If you’re a healthcare professional, lawyer, or have other skills that are in demand, you may qualify for repayment assistance from the military or a number of state-sponsored programs:
- State-sponsored programs: The National Health Service Corps provides grants to most states to run their own student loan repayment assistance programs for healthcare professionals. Use this map to find information for applying in your state. About half of states provide assistance to lawyers pursuing careers in public interest law.
- Military programs: All active duty service members may qualify for Public Service Loan Forgiveness after making 120 qualifying monthly payments. In addition, several branches of the armed forces — including the Army, Navy, and Air Force — provide student loan repayment assistance to doctors, lawyers, and other people with technical skills they need badly.
Student loan discharge programs
If you become disabled or the school where you received your loans suddenly closes, you may be eligible for a form of loan forgiveness called discharge.
Total and permanent disability discharge
If you become totally and permanently disabled while your repaying federal student loan debt, you can apply to have the remainder of your debt forgiven, with no federal tax liability. The process is now automatic for veterans. For more information on how to apply, visit the Department of Education’s dedicated website, DisabilityDischarge.com.
Borrower defense to repayment discharge
If you’re defrauded by your school — if it misleads you about its job placement rates, for example — you may qualify to have your federal student loans forgiven by filling for a Borrower Defense to Repayment claim. You’ll usually have to demonstrate that the school, “through an act or omission, violated state law directly related to your federal student loan or to the educational services for which the loan was provided.”
Total and permanent disability discharge for veterans
Veterans who become totally and permanently disabled while serving their country will automatically have any unpaid student loan debt discharged. There’s no federal tax liability, but if you think your state might count your loan forgiveness as taxable income, you can opt out. Visit the Department of Education’s dedicated website, DisabilityDischarge.com, for more information.
Discharge due to school closing
If the school you’re attending closes while you’re enrolled or within 120 days after you withdraw, you may qualify to have 100% of your federal loans forgiven. You can’t qualify for a closed school discharge if it’s been more than 120 days since you left, or you transferred to another school. If you think you qualify, though, contact your loan servicer to file an application and keep making payments on your loans while your application is being processed.
Discharge due to death
If you die, your federal student loans will be forgiven. The same is true of parent PLUS loans taken out on your behalf. If you die, your parents are no longer obligated to pay. If your parents die, you are not obligated to repay parent PLUS loans they took out to pay for your school. Many, but not all, private lenders provide death discharge for borrowers and cosigners, too.
Student loan cancellation programs
Workers in a number of public service occupations — including teachers, nurses, medical technicians, firefighters, police officers, and librarians — may qualify for partial or full discharges of their Perkins loans. Forgiveness is granted incrementally, and it typically takes up to five years to qualify for 100% forgiveness.
Perkins loan teacher cancellation
Elementary and high school teachers may qualify to have up to 100% of their federal Perkins loans forgiven if they work full-time in a public or nonprofit school system and are:
- Serving students from low-income families
- Working as a special education teacher of infants, toddlers, children, or youth with disabilities
- Teaching in a field where there’s shortage of qualified teachers such as math, science, foreign languages, or bilingual education
Other Perkins loan cancellation programs
There are a number of other service occupations or volunteer services that may lead to full or partial Perkins loan cancellation, including:
- Early childhood education provider
- Employee at a child or family services agency
- Faculty member at a tribal college or university
- Firefighter
- Law enforcement officer
- Librarian with master’s degree at Title I school
- Military service
- Nurse or medical technician
- Professional provider of early intervention (disability) services
- Public defender
- Speech pathologist with master’s degree at Title I school
- Volunteer service (AmeriCorps VISTA or Peace Corps)
What to consider before applying for forgiveness
If you’re hoping to find a path to loan forgiveness, be sure to keep a sharp eye out for the following pitfalls:
- Scams: Millions of Americans are struggling to repay their student loan debt, and legions of shady operators have organized large-scale efforts to take advantage of their desperation. Remember you will never be charged a fee to enroll in the income-driven repayment plans offered by the Department of Education that can lead to loan forgiveness.
- Tax liabilities: Loan forgiveness granted to public servants and disabled borrowers is tax free. But if you qualify for loan forgiveness after making 20 to 25 years of payments in an income-driven repayment program, the amount forgiven is currently considered taxable income by the IRS.
- Interest capitalization: If you enroll in an income-driven repayment program in the hopes of qualifying for loan forgiveness, your payments may not cover all of the interest you owe. If you decide to leave an IDR plan, fail to recertify your income, or are no longer eligible to participate in it, some or all of your unpaid interest may be recapitalized and added onto your loan balance.
What to do if you don’t qualify for student loan forgiveness
Even if you won’t qualify for student loan forgiveness, income-driven repayment plans can help lower your monthly payments on your federal student loans — so can extended and graduated repayment plans or federal student loan consolidation. Just remember that if you stretch your payments out over a longer period of time, you may end up paying more interest charges.
If high interest rates on federal or private student loans are making it difficult to pay down your loan principal, check to see if you can refinance your student loans with a private lender at a lower rate. Remember, though, that if you have federal student loans, refinancing with a private lender means giving up the option to enroll in federal repayment plans that can lead to loan forgiveness.
See Your Refinancing Options
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