Student loan debt has become a crisis in the United States, with over 45 million borrowers owing more than $1.7 trillion in student loans. With rising tuition costs and interest rates, many graduates are saddled with decades of debt repayments. Thankfully, there are federal and state student loan forgiveness programs that can help certain borrowers get some or all of their loans discharged.
In this comprehensive guide, we will cover the following topics:
Table of Contents
- Overview of Student Loan Forgiveness Programs
- Federal Student Loan Forgiveness Programs
- Public Service Loan Forgiveness (PSLF)
- Teacher Loan Forgiveness
- Perkins Loan Cancellation
- Total and Permanent Disability Discharge
- Closed School Discharge
- Borrower Defense to Repayment
- Federal Student Loan Repayment Plans
- State and Non-Profit Student Loan Forgiveness Programs
- How to Apply for Student Loan Forgiveness
- Student Loan Forgiveness Eligibility Requirements
- Maximizing Your Chances of Qualifying
- Student Loan Forgiveness Scams to Avoid
- Frequently Asked Questions
So if you are looking for ways to get your student loans discharged or paid off, this guide covers all the major federal and state programs available in 2023. Let’s get started!
Overview of Student Loan Forgiveness Programs
The federal government, states, and some private organizations offer student loan forgiveness programs as a way to encourage borrowing for certain occupations or purposes, or to help those facing financial hardship.
While these programs can discharge some or all of your eligible federal and private student loans, approval is not guaranteed. You need to fully understand the eligibility criteria and follow the steps to apply and annually recertify for forgiveness.
The major types of student loan forgiveness programs include:
- Federal loan forgiveness – For public servants, teachers, medical professionals, those with permanent disabilities etc.
- Income-driven repayment plans – Affordable payments based on income and family size. Remaining balance forgiven after 20-25 years.
- Public Service Loan Forgiveness (PSLF) – Full loan discharge after 120 qualifying payments while employed full-time for a qualifying employer.
- State and nonprofit programs – For residents and graduates who live and work in the state. Offer partial to full loan forgiveness.
Later in this guide we dive deep into the details of each major forgiveness program, their eligibility criteria, and how to maximize your chances of qualifying.
Federal Student Loan Forgiveness Programs
The federal government currently offers six student loan forgiveness programs that you can apply for based on your occupation, disability status, or type of loans you have.
Let’s look at how these programs work and who qualifies for them in 2023.
Public Service Loan Forgiveness (PSLF)
The PSLF program offers full federal student loan forgiveness for borrowers working full-time for a qualifying public service employer and making 120 qualifying monthly payments.
You need to have eligible federal Direct Loans and be enrolled in a qualifying income-driven repayment (IDR) plan. Each of your 120 payments must be made in full and on-time while working for an eligible employer.
Once you hit the 120 payment mark, you can apply for forgiveness of your remaining federal student loan balance. There are no caps on the amount discharged.
PSLF Eligible Employers
Qualifying PSLF employers include:
- Government organizations – federal, state, local, tribal
- 501(c)(3) nonprofits
- AmeriCorps and Peace Corps
- Public services like military, public health, public education, public library, public safety
Your employer must be listed in the federal PSLF Employer Database to qualify.
PSLF Eligibility Requirements
To qualify for PSLF forgiveness, you must:
- Have eligible Direct Loans
- Be enrolled in an IDR plan
- Work full-time for a qualifying employer
- Make 120 qualifying payments
Borrowers enrolled in the PSLF program can track their progress via the PSLF Help Tool and by submitting Employer Certification Forms annually or when changing jobs.
In October 2022, the PSLF program was expanded via the Limited PSLF Waiver which allows borrowers to get prior non-qualifying repayment plans and payments counted. This waiver is in effect until October 31, 2022.
Take advantage of the waiver while you can! Learn more on maximizing PSLF later in this guide.
PSLF Forgiveness Amount
The PSLF program offers full federal student loan forgiveness. There are no caps so all your remaining loan balance will be discharged after making 120 qualifying monthly payments.
Parent PLUS loans borrowed for your education are also eligible for discharge under PSLF.
Note that only qualifying federal Direct Loans are eligible for PSLF. FFEL, Perkins, private loans etc. do not qualify. You can consolidate ineligible loans into a Direct Consolidation Loan to make them eligible for PSLF.
Teacher Loan Forgiveness
The Teacher Loan Forgiveness program offers federal student loan cancellation of up to $17,500 for qualified teachers who teach full-time for five complete and consecutive academic years in certain elementary and secondary schools and educational organizations.
The program forgives up to $5,000 of subsidized/unsubsidized loans, or up to $17,500 for highly qualified teachers of math, science, and special education who teach in eligible schools.
To qualify, you must not have had an outstanding federal loan balance prior to Oct 1, 1998. So new borrowers are eligible while prior borrowers are not.
You need to submit the Teacher Loan Forgiveness application and certification form to apply. Learn more at the Teacher Loan Forgiveness page.
Perkins Loan Cancellation
Federal Perkins Loans have a cancellation benefit for borrowers who go into qualifying public service occupations.
Based on your profession, Perkins Loans can be partially or fully discharged after at least one year of eligible public service. Qualifying occupations include:
- Nurses, medical technicians
- Military service
- Public defenders
- Speech language pathologists
- Faculty at tribal colleges
- And more
Perkins borrowers can have up to 100% of their loan cancelled over multiple years of service. Contact your loan servicer for details on how to apply for Perkins cancellation.
Total and Permanent Disability Discharge
Borrowers who become totally and permanently disabled can have their federal student loans discharged via this program.
To qualify, you must provide documentation from your physician that you are unable to work and earn income due to a total and permanent disability.
If approved, your loans will be conditionally discharged for 3 years, and then fully discharged if your disability earnings status remains unchanged.
Borrowers whose disability discharge is approved by the VA can qualify for an automatic discharge of federal student loans.
Private student loans may also be eligible for discharge if they offer total and permanent disability discharge protections. Check with each lender.
Learn more on the Total and Permanent Disability Discharge page.
Closed School Discharge
Federal student loans can be forgiven via the closed school discharge program if your college shuts down while you are enrolled or shortly after, preventing degree completion.
You can have loans taken out to attend the closed school forgiven. Transferred credits do not prevent eligibility.
To qualify, submit a closed school discharge application within 3 years of the school closure date. You cannot have completed your program of study via transfer credits or other means.
Check the Closed School Discharge page for eligibility requirements.
Borrower Defense to Repayment
The borrower defense program forgives federal student loans if your college misled you or engaged in misconduct.
Examples include false advertising of job prospects, misrepresented accreditation, etc.
To qualify, submit a borrower defense application detailing how the school violated state laws regarding education services. You must also demonstrate financial harm from the school’s actions.
Over the past few years, borrower defense discharges have been approved for students defrauded by for-profit college chains like Corinthian Colleges and ITT Technical Institute.
Check the Borrower Defense page for details on qualifying and applying.
So those are the major federal student loan forgiveness programs available in 2023. Make sure to review the eligibility criteria carefully and submit all required documentation when applying.
Now let’s look at federal student loan repayment plans that offer loan forgiveness after an extended repayment term.
Federal Student Loan Repayment Plans
The federal government offers income-driven repayment plans that base your monthly payments on your discretionary income and family size.
These plans provide an affordable payment, potential for interest subsidies, and forgiveness of any remaining balance after 20-25 years of repayment:
- Revised Pay As You Earn (REPAYE) – 10% of discretionary income. Forgiveness after 20 years undergraduate, 25 years graduate. Interest subsidy if payment doesn’t cover accruing interest.
- Pay As You Earn (PAYE) – 10% of discretionary income. Forgiveness after 20 years for all. Interest subsidy if payment doesn’t cover accruing interest.
- Income-Based Repayment (IBR) – 10% (for new borrowers) or 15% (for prior borrowers) of discretionary income. Forgiveness after 20 years undergraduate, 25 years graduate.
- Income-Contingent Repayment (ICR) – 20% of discretionary income or fixed payment over 12 years. Forgiveness after 25 years.
These plans are available for federal Direct Loans. Private student loans issued by banks and credit unions do not qualify for these programs. Parent PLUS loans are eligible if consolidated into a federal Direct Consolidation Loan.
To start repaying your federal loans via these programs, submit an income-driven repayment plan request online to your loan servicer each year with updated income and family size details.
You must recertify each year to remain enrolled in the program. Make sure you are meeting all requirements to ensure you remain on track for forgiveness of any remaining balance at the end of the term.
State and Non-Profit Student Loan Repayment Programs
In addition to federal loan forgiveness programs, many states and private non-profit organizations also offer student loan repayment assistance. These programs help borrowers repay their student loans in exchange for service in that state, community, or organization.
Benefits are usually contingent on you living and working in that state or for that organization for a set time period, often multiple years. Here are some examples of state and non-profit loan repayment programs:
- Healthcare Professionals – Nurses, doctors, dentists, mental health professionals
- Teachers & School Staff – Teachers, principals, counselors
- Public Interest Attorneys – Public defenders, prosecutors, legal aid
- State Government Employees – Accountants, IT professionals, engineers
- Scientists – Biologists, chemists, researchers
Eligible loans include federal and private student loans. Award amounts and eligible occupations vary by state. Compare programs on sites like Student Loan Hero’s State Loan Repayment Finder.
- National Health Service Corps – Primary care doctors, nurses, dentists in underserved areas
- Nurse Corps – Registered nurses in critical shortage facilities
- Army National Guard – Enlisted soldiers
- AmeriCorps – Public service volunteer work
- Teach for America – Teachers in low-income schools
To find programs you may qualify for, research opportunities related to your occupation, state of residence, skills, degree, and volunteer interests.
Having federal and private student loans can allow you to access repayment help through multiple programs.
Now that we’ve covered the major types of student loan forgiveness programs, let’s look at the application process and eligibility factors.
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How to Apply for Student Loan Forgiveness
The application process for student loan forgiveness programs involves gathering documents, submitting forms, corresponding with your servicer, and annually recertifying your eligibility. Here are some tips for navigating the process:
- Contact your servicer – Your federal loan servicer can advise you on available programs and application requirements. For state and non-profit programs, contact the administering organization.
- Check eligibility – Review the complete eligibility criteria for income, employment, loans, and other factors before applying. Make sure you qualify.
- Compile documentation – This includes prior tax returns, pay stubs, employer certification forms, disability documents, approved school closure notices, etc.
- Complete & submit forms – Applications are available on your servicer website or program website. Submit all forms and documentation.
- Follow up and recertify – Check in regarding application status. Provide requested follow up information. Recertify annually to remain eligible.
- Avoid scams – Never pay an outside company for help applying or student loan forgiveness.
Set calendar reminders to ensure you submit recertification paperwork and updated documents before specified deadlines each year.
Maintaining up-to-date employment and income documentation is key for ongoing eligibility and progress tracking.
Student Loan Forgiveness Eligibility Requirements
While eligibility varies by program, here are some common federal student loan forgiveness qualifications:
- Have eligible federal student loans (Direct Loans)
- Work full-time for a qualifying employer
- Meet income limits based on family size
- Make qualifying payments under an income-driven repayment plan
- Submit employer/physician certification forms
- Recertify eligibility annually
For state and non-profit loan repayment programs, common eligibility factors include:
- Reside and work in the state
- Have eligible federal or private student loans
- Work in an eligible occupation (teacher, doctor, nurse, public interest lawyer etc.)
- Commit to work for the organization for 2-5 years
- Provide employer certification
Carefully review all criteria before applying to ensure you initially qualify and can maintain eligibility in the coming years. Set reminders for annual recertification deadlines.
Maximizing Your Chances of Qualifying for Forgiveness
While approval for student loan forgiveness programs is never guaranteed, you can take steps to maximize your chances:
- Consolidate FFEL/Perkins loans – Federal Direct Loans are required for PSLF and IDR plans. Consolidate to become eligible.
- Enroll in an IDR plan – Make income-based payments a requirement of the program.
- Submit documentation annually – Employment forms, income tax returns, disability statuses change. Update servicers promptly.
- Take advantage of waivers – Limited PSLF waivers in Oct 2022 allow more non-qualifying payments and loans to qualify.
- Apply every year – Reapply even if rejected previously as eligibility criteria can change.
- Review progress annually – Confirm qualifying employer, payments, forms are correctly counted. Address any issues immediately.
- Follow up on applications – Don’t let applications languish. Request status updates and provide requested information.
Meeting all technical requirements of an forgiveness program is critical to get approval once eligible payments/years are met. So review criteria thoroughly and set reminders to stay organized and compliant.
Student Loan Forgiveness Scams to Avoid
When pursuing student loan relief programs, beware of scams and fraudulent companies claiming to offer help. Warning signs include:
- Charging upfront fees – Application help should always be free
- Guaranteeing eligibility/approval – No company can guarantee loan forgiveness
- Offering to enroll you in “new” relief programs – Beware fake programs
- Asking for Federal Student Aid (FSA) login – Don’t share this info which scammers can use to steal funds or personal information.
- Advertising debt elimination plans – Debt settlement and loan consolidation schemes rarely deliver promised results.
Work only with your federal loan servicer and state/non-profit program administrators. Report any suspected student loan scams to the FTC and state authorities. Never pay upfront fees for promised results.
FAQs on Student Loan Forgiveness Programs
What types of loans are eligible for student loan forgiveness?
Federal Direct Loans are eligible for PSLF, income-driven repayment forgiveness, and other federal programs. FFEL Program loans need to be consolidated. Private student loans are only eligible for certain state/non-profit programs.
How do I know if I have eligible federal loans?
Log in to StudentAid.gov and view your loan details for loan types, servicer, and repayment status. Direct Loans and consolidated FFEL/Perkins loans qualify.
Can I get approved for multiple forgiveness programs?
It depends. You can’t stack multiple federal programs. But you may qualify for federal (PSLF) and state repayment help. Or nonprofit aid and employer repayment programs. Review compatible options.
How long does it take to get loan forgiveness?
Federal programs with set repayment terms like PSLF (120 qualifying payments over 10 years) and income-driven plans (20-25 years) have extended timelines. State and nonprofit programs range from 2-5 years of service.