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Student Loans

The Ultimate Guide to Student Loan Forgiveness Programs

federal student loan forgiveness

If you carry student loans and are wondering how you will pay them off, there are federal student loan forgiveness programs that can help. Whether you’re a teacher, nurse, served in the military, or provide another public service, there are debt relief programs available to assist you. We’re going to give you a rundown of the student loan forgiveness programs available, the requirements and eligibility for each, and how to apply.

Types of Forgiveness Programs

Public Service Student Loan Forgiveness

How it works
Make at least 120 student loan payments and work for a qualified employer to have your direct student loans forgiven.

Who is eligible?
In order to be eligible for the Public Service Loan Forgiveness (PSLF) Program, you must work for a qualifying employer. This includes:

  1. Government organizations – including federal, state, local, or tribal organizations.
  2. Not-for-profit organizations – organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code.
  3. Other not-for-profit organizations – organizations that provide certain types of qualifying public services, such as a full-time AmeriCorps or Peace Corps position.

Which loans are eligible?
Direct federal student loans are eligible under this forgiveness program.

What are the requirements?
You must meet the following requirements to be eligible for the PSLF program.

  1. Make 120 payments to your student loan under a qualifying repayment plan;
  2. Work for a qualifying organization (see “who is eligible” above);
  3. Be employed full-time.

Because you must make 120 monthly payments, it will take you 10 years in order to qualify for the PSLF program. Qualifying repayment plans include all income-driven repayment plans and the 10-year Standard Repayment Plan.

Is this program right for you?
If you work for an eligible organization, it only makes sense to take advantage of the program. If you are having difficulties with your student loan, you may consider taking a position with a qualified organization to ease the burden of your loan repayment. Just keep in mind that it will take 10 years before you are eligible for loan forgiveness.

How to apply
The best way to apply for federal student loan forgiveness through the PSLF program is to submit the Employment Certification form annually or whenever you change jobs. If you don’t, then you have to do all the forms covering 10 years of employment all at once; not fun! Send the completed form, with your employer’s certification, to FedLoan Servicing (PHEAA). If you have additional questions, check out this fact sheet.

Teacher Loan Forgiveness

How it works
Teach at a Title I school for five consecutive years and have up to $17,500 of your student loans forgiven.

Who is eligible?
Teachers who teach full-time for five consecutive academic years in elementary and secondary schools serving low-income families are eligible for teacher student loan forgiveness. Teaching at an educational service agency may qualify you as well. Be sure to check to see if the agency you work for qualifies.

Which loans are eligible?
Loan forgiveness programs for teachers offer student loan forgiveness for Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, and Unsubsidized Federal Stafford Loans. Teacher loan cancellation is offered for Federal Perkins Loans. Plus loans are not eligible.

What are the requirements?
There are quite a few requirements for this particular federal student loan forgiveness program. The first is that you teach at a Title I school, which serves low-income families. The second is five consecutive years of teaching. Lastly, you must not be in default for any of your student loans.

Is this program right for you?
If you’re considering teaching, working for a Title I school could lessen the amount you owe on your student loans. Teaching at other schools won’t qualify you for this program.

How to apply
Apply after you have completed your five years of teaching. Print and complete the Teacher Loan Forgiveness Application, with the certification section completed by the chief administrative officer of the school at which you performed your qualifying teaching service.

Teacher Cancellation for Federal Perkins Loans

How it works
Teach for one year at a school that serves low-income families, teach as a special education teacher, or teach mathematics, science, foreign languages, bilingual education, or any other area of teacher shortage to receive 100% cancellation of your Federal Perkins Loan.

Who is eligible?
Teachers who serve low-income families, special education teachers, and teachers in areas of teacher shortages are eligible. You don’t have to be certified or licensed to be eligible, you just have to be considered a full-time professional by your employing school.

Which loans are eligible?
Federal Perkins Loans are the only loans eligible for this program.

What are the requirements?
Teach for one academic year.

Is this program right for you?
If you have a Federal Perkins Loan, this could be a way to get 100% of the loan canceled. Even if you aren’t licensed as a teacher, you can still be eligible if you are considered a full-time professional. This works well for charter schools and private schools, where teacher licensure is not always necessary in order to teach.

How to apply
To apply, request application forms from the office that administers the Federal Perkins Loan program at the school that holds your loan and provide documentation demonstrating you qualify.

Federal Student Loan Forgiveness Through Income-based Repayment

How it works
Make payments toward your student loan using an income-based repayment plan for 20-25 years and you may have your student loan debt forgiven.

Who is eligible?
If your calculated monthly payment would be less than the amount you would pay under a 10-year Standard Repayment Plan, then you’re eligible for an income-based repayment plan.

Which loans are eligible?
The loans eligible for this repayment plan and federal student loan forgiveness include:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans
  • Direct Consolidation Loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • Federal Perkins Loans (if consolidated)

What are the requirements?
Make payments for 20-25 years under a low-income repayment plan.

Is this program right for you?
If you have high debt from your student loans, but will continue to have a low-paying profession, such as teaching or some other public service, and you don’t qualify for other forgiveness programs, then this plan is right for you.

How to apply
Applying for an income-based student loan repayment plan is simple and free and can be done at StudentLoans.gov. It’s important to be aware of scams out there that attempt to charge you money for these free services. Many of these companies will lure in borrowers through what they refer to as the Obama Student Loan Forgiveness Program.

Military Student Loan Forgiveness

Military service falls under the public service student loan forgiveness program. Being employed by the military, and serving your country for ten years, will allow you to be forgiven for all of your student loans. See the above section on the public service student loan forgiveness program for more information, and how to use the program as a member of the military.

Additionally, under the Perkins loan cancellation program, service in the U.S. armed forces in a hostile fire or imminent danger pay area may qualify you for complete loan forgiveness if your active duty service began on or after Aug. 14, 2008.

Loan Forgiveness for Medical Professionals

Full-time medical techs and nurses may qualify for up to 100% loan forgiveness through the Federal Perkins Loan Cancellation and Discharge program. Additionally, the IHS Loan Repayment Program (LRP) offers up to $40,000 to healthcare professionals who choose to work at a site that provides health care services to American Indian and Alaska Native Committees for a minimum of two years. Joining the National Health Service Corps for two years can qualify you to have up to $50,000 of your student loans forgiven. Rural health providers may look at this list of forgiveness programs.

City and State Loan Forgiveness Programs

Doing a Google search for your profession, city, and state, along with ‘student loan forgiveness’ could provide you with additional options for having your loans forgiven. Many city and state programs encourage people to work in particular sectors of the economy in which shortages are present by offering incentives, like loan forgiveness. In addition, if you are a teacher, the American Federation of Teachers (AFT) has a database of loan forgiveness programs and other funding opportunities.

Loan Forgiveness for Acts of Service

Teach For America, AmeriCorps and the Peace Corps offer service-based opportunities to receive stipends to use toward your loan, qualify for service-based loan forgiveness programs, and in the case of the Peace Corps, receive partial cancellation of your Stafford, Perkins, and Consolidation loans.

Which Student Loan Forgiveness Program is Right for You?

When deciding which student loan forgiveness program is right for you, it is important to consider four elements of each program requirements:

  1. Loan type;
  2. Eligibility;
  3. Your occupation;
  4. Years of service.

If you are not eligible for any of the student loan forgiveness programs listed, you still have options. You may always request a deferment or forbearance of your loan. Consolidation is an option that could allow you to refinance your student loans with a lower monthly payment. Talk to a lender to get an idea of what your options are. While private student loans do not offer loan forgiveness, there are alternative methods to alleviate your student loan burden.