Student loans can be a significant burden for many borrowers in the United States. With rising tuition costs, the average student loan debt now exceeds $16,000 per undergraduate student and $28,000 per graduate student. Repaying these loans can seem overwhelming.
However, several student loan forgiveness programs are available to potentially reduce or even erase this debt. These programs provide relief by forgiving part or all of the loan balance, depending on the borrower’s profession, repayment history and eligibility.
If you’re struggling to repay your student loans, understanding the options available for forgiveness could be the key to financial freedom. In this guide to student loan forgiveness, we’ll explore various loan forgiveness programs, additional discharge options and actionable strategies for paying off loans faster if you’re not eligible for forgiveness.
What is student loan forgiveness?
Student loan forgiveness is a government or institutional program that offers borrowers a way to have their remaining student loan debt canceled. These programs are often designed for people working in specific public service sectors, such as health care, education or nonprofit work. Rather than repaying the full amount of the loan, eligible borrowers may have part or all of their debt forgiven after meeting specific criteria, which often include making a certain number of qualifying payments or working in a designated field for a specified period.
Federal student loans are the most common type of loan eligible for forgiveness, while private loans are usually not covered by these programs. Student loan forgiveness can provide significant relief to borrowers who qualify, but it’s essential to understand the various requirements and timelines involved, as well as the potential tax implications.
It’s important to note that student loan forgiveness is different from repayment. For example, many federal student loans offer income-driven repayment plans (IDRs). IDRs calculate the amount you owe as 10 percent to 20 percent of your discretionary income. Your monthly payment could even be $0 if your income is low enough.
Common IDR plans include:
Income-driven repayment plans also have a “forgiveness” component. Depending on your plan, that loan may automatically be discharged after a certain number of payments.
Student loan forgiveness options
If you don’t want to wait 20 years to reduce or eliminate what you owe, here are other options to help discharge that debt sooner.
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is one of the most well-known student loan forgiveness programs. To qualify for PSLF, borrowers must make 120 qualifying monthly payments under a qualifying repayment plan while working full time for a qualifying employer.
Eligible employers under this plan include:
- U.S.-based government organizations at any level, including the military
- Nonprofit organizations that are tax-exempt under the 501(c)(3) IRS code
- Other nonprofit organizations that provide qualifying public services, such as emergency management, public safety, law enforcement or public service law
You could also qualify for PSLF if you’re a healthcare provider working with any of the above organizations. Groups that don’t count as qualifying employers under PSLF include for-profit organizations (even government contractors), partisan political organizations or labor unions.
After making the required payments, the remaining loan balance is forgiven. It’s important to note that only Direct Loans (federal loans issued by the U.S. Department of Education) are eligible for PSLF, and the borrower must be on an income-driven repayment plan.
Medical school loan forgiveness
Undergraduate school can be expensive enough. If you add medical school to the list, your debt could be astronomical. If you’re a doctor or other healthcare provider facing this issue, you could find relief from the following programs:
To take advantage of any of the above plans, you’ll need to commit to working in underserved regions and areas facing a shortage of healthcare providers. Doing so may be well worth it. In addition to using your skills to help others, you could knock off as much as $120,000 in medical school debt.
Nursing school loan forgiveness
The forgiveness programs for doctors mentioned above can also help forgive student debt generated from nursing school.
The Nurse Corps Loan Repayment Program is available through the Health Resources and Services Administration website. Applications are accepted annually, and if you’re approved, it could pay up to 85 percent of your nursing school debt.
To qualify for this program, you need to be a licensed registered nurse, an advanced practice registered nurse or a nurse faculty member. You also need to work for at least two years in a health-care facility with a critical shortage of nurses (also known as a critical shortage facility).
Keep in mind: The NCLRP application process is highly competitive. It’s a good idea to seek out additional debt forgiveness plans.
Teacher loan forgiveness
Designed specifically for educators, the Teacher Loan Forgiveness program provides up to $17,500 in forgiveness for teachers who work full time in low-income schools for five consecutive years. To qualify, teachers must have Federal Direct or Stafford loans and be considered “highly qualified” in their subject area. This program is a great option for teachers looking for relief, though it does not typically offer full loan forgiveness like PSLF.
However, just because you say you’re a teacher doesn’t mean that the Department of Education considers you one. The DOE defines a teacher as someone involved with direct classroom teaching or classroom-type teaching in a non-classroom setting.
Additionally, that teacher must meet all the following qualifications:
- Have a bachelor’s degree
- Be state-certified as a teacher
- Have no waiver of certification or licensure requirements for emergency or provisional reasons
In other words, if you’re a tutor or non-state-certified instructor, you won’t meet the requirements to qualify for the TLF program.
Military loan forgiveness
Members of the U.S. military may be eligible for several loan forgiveness programs. The Public Service Loan Forgiveness program is available to military members, and additional benefits are offered through programs like the Servicemembers Civil Relief Act (SCRA) and the military’s repayment assistance program, which can help service members manage their student loan debt during and after active duty. In addition, you may be eligible for loan deferment, forbearance, interest suspension or cancellation while on active duty.
The available debt forgiveness programs differ based on your status, circumstances and military branch. Some benefits could also be retroactive.
State-based forgiveness programs
Many states offer their own loan forgiveness programs to attract workers to specific high-need professions, such as health care, teaching and public service. Each state’s program has its own criteria and benefits, so it’s worth researching whether your state offers student loan forgiveness.
Additional discharge options
If you don’t qualify for traditional student loan forgiveness programs, there are other ways to have your federal student loans discharged under specific circumstances.
Total and Permanent Disability (TPD) discharge
Borrowers who are unable to work due to a total and permanent disability may qualify for a discharge of their federal student loans through the Total and Permanent Disability Discharge program. To qualify, you must provide documentation of your disability from a doctor, the Social Security Administration or the Department of Veterans Affairs.
Closed School Discharge
If your school closes while you’re enrolled or shortly after you withdraw, you may be eligible for a Closed School Discharge. This program forgives the federal loans you took out to attend that school, provided that you were unable to complete your degree due to the closure.
Borrower Defense Discharge
The Borrower Defense Discharge is a program that forgives federal student loans if the borrower can prove that their school misled them or engaged in fraudulent practices. This program has been in the spotlight in recent years due to high-profile cases involving for-profit schools accused of predatory practices.
Bankruptcy discharge
While it is notoriously difficult to have student loans discharged in bankruptcy, it may be possible under certain circumstances. Borrowers must prove that repaying their student loans would cause “undue hardship,” a legal standard that can vary by court. Bankruptcy discharge of student loans is rare but can be pursued as a last resort for those in severe financial distress.
When you don’t qualify for forgiveness
The above loan forgiveness methods pertain to government-backed programs like Direct Loans, Federal Family Education Loans (FFELs) and Perkins Loans. But what happens if you don’t qualify for any of the above? Your best bet is to discharge your student debt faster through the following methods.
Refinance your loans
Refinancing your student loans can help you secure a lower interest rate, which can reduce your monthly payments and help you pay off your loans more quickly. A refinance could also help you consolidate multiple student loans. Refinancing is available through private lenders and is often best for borrowers with good credit and stable income. However, be aware that refinancing federal loans with a private lender will cause you to lose access to federal loan benefits like income-driven repayment plans and loan forgiveness programs.
Make extra payments
If you’re able to, making additional payments toward your loan principal can shorten your repayment timeline. Even small extra payments can have a significant impact over time, reducing the amount of interest you pay and allowing you to become debt-free faster. Set up automatic payments or schedule bi-weekly payments to help stay on track.
Consider an income-driven repayment plan
While these plans may extend your loan term, they can reduce your monthly payments to a manageable amount, preventing default and keeping your loans in good standing. These plans base your payment on your income, which can help you make consistent payments if you’re facing financial difficulties.
Look for employer assistance
Some employers offer student loan repayment assistance as part of their benefits package. Check with your employer to see if they provide any help with student loan repayment, and take advantage of this benefit if it’s available.
Create a detailed budget
Mapping out your monthly expenses and income can help you identify areas where you can cut back and allocate more money toward your student loan payments. A detailed budget is essential for staying on top of your finances and ensuring your loan payments are a priority.
The bottom line
Student loan forgiveness can offer significant relief for borrowers who qualify, potentially erasing thousands of dollars in debt. Programs such as Public Service Loan Forgiveness, Teacher Loan Forgiveness and Income-Driven Repayment Forgiveness are excellent options for borrowers in public service, education or lower-income jobs. Even if you don’t qualify for forgiveness, there are other discharge options available for specific circumstances, such as disability or school closure.
For those who don’t meet the criteria for forgiveness, taking actionable steps to pay off your student loans faster — such as refinancing, making extra payments or exploring employer repayment assistance — can help you reduce your debt burden and achieve financial freedom. Always review your options carefully and consider consulting with a financial advisor to determine the best repayment strategy for your situation.
Frequently asked questions
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