Student loan debt is a huge financial burden for millions of Americans, with outstanding student loan balances totaling over $1.7 trillion nationwide. With rising interest rates and cost of living, paying off student loans is becoming increasingly difficult. The good news is that student loan forgiveness programs provide a pathway for borrowers to get some or all of their student loan debt cancelled.
In this comprehensive guide, we’ll cover the ins and outs of filing for student loan forgiveness in 2022. You’ll learn about the main federal and state programs available, eligibility requirements, how to apply, and what documents you need. With student loan forgiveness, certain qualifying borrowers can eliminate some or all of their student debt.
Who Qualifies for Student Loan Forgiveness?
The first question most student loan borrowers have is – do I qualify for student loan forgiveness? There are a few main forgiveness programs, each with their own criteria. Here’s a quick overview of who is eligible for the major federal and state student loan forgiveness options:
Federal Student Loan Forgiveness Programs
- Public Service Loan Forgiveness (PSLF) – Borrowers working full-time for federal, state, local government or a qualifying nonprofit can receive forgiveness after making 120 qualifying payments.
- Teacher Loan Forgiveness – Teachers in certain specialties teaching at low-income schools for 5 consecutive years can receive up to $17,500 in loan forgiveness.
- Income Driven Repayment (IDR) Forgiveness – Borrowers on IDR plans can have their remaining loan balances forgiven after 20-25 years of payments.
- Borrower Defense to Repayment – Borrowers can have loans forgiven if their school misled them or violated certain laws.
- Closed School Discharge – Borrowers can be eligible for discharge if their school closes while enrolled or shortly after.
State and Non-Profit Student Loan Forgiveness
- State loan repayment programs – Many states offer student loan repayment assistance programs for certain occupations and areas of need.
- Non-profit and employer student loan repayment programs – Some non-profits and companies offer student loan repayment help as an employee benefit.
- Military student loan forgiveness – Specific programs exist for active duty or reserve military members.
Next, let’s take a detailed look at each of the main federal student loan forgiveness programs, their eligibility criteria, and how to apply.
Public Service Loan Forgiveness (PSLF)
The PSLF program forgives the remaining balance on federal Direct Loans for borrowers who work full-time for the government or certain non-profit organizations after making 120 qualifying monthly payments. It is one of the main federal student loan forgiveness programs.
Here is an overview of PSLF eligibility requirements:
- Qualifying employment – You must work full-time (at least 30 hours/week) for a federal, state, local, or tribal government agency or a 501(c)(3) nonprofit organization.
- Qualifying loans – You must have federal Direct Loans. Other federal loan types can qualify under certain conditions. Private student loans are not eligible.
- Qualifying repayment plan – You must be on an income-driven repayment (IDR) plan. This includes plans like Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE) or Income-Contingent Repayment (ICR). The Standard Repayment Plan does not qualify.
- 120 Qualifying Payments – You must make 120 on-time monthly payments under a qualifying repayment plan while working full-time for an eligible employer. Payments made before qualifying employment, during deferment/forbearance, or after reaching 120 qualifying payments do not count.
The PSLF program offers the most comprehensive student loan forgiveness, with complete cancellation of your remaining federal student loan balance. However, the program does have stringent eligibility criteria.
Let’s go over some steps for how to apply for PSLF:
How to Apply for PSLF
- Make sure your loans and employer qualify – Confirm you have eligible Direct Loans and work for a qualifying PSLF employer. Use the PSLF Help Tool to verify.
- Switch to an IDR plan if needed – To make qualifying payments, you must be on an IDR plan like IBR, PAYE, or REPAYE. You can change plans online or by contacting your servicer.
- Complete the PSLF form (annually) – To track qualifying payments, submit the PSLF Certification Form annually or when changing employers.
- Make 120 qualifying payments – After confirming eligibility, continue making on-time monthly payments under a qualifying repayment plan while working for an eligible employer.
- Apply for forgiveness – Once you make your 120th qualifying payment, complete and submit the PSLF application to receive forgiveness on your remaining loan balance.
Persistence is key with PSLF, as you must remain on qualifying plans with eligible employment over a prolonged period. But for those that stick with the program, it offers the most generous federal forgiveness option.
Teacher Loan Forgiveness Program
The Teacher Loan Forgiveness Program provides forgiveness of up to $17,500 on federal Direct or Stafford Loans to borrowers who teach full-time for five consecutive years in certain specialties at qualifying elementary or secondary schools.
Here are the main criteria you must meet to qualify for teacher loan forgiveness:
- Teach full-time for five consecutive academic years at a qualifying low-income elementary or secondary school or educational service agency.
- Be a highly qualified teacher in a high-need subject area such as math, science, special education, foreign languages, bilingual education etc.
- Have Direct Loans, Stafford Loans, or consolidate Perkins loans into a Direct Consolidation Loan.
The amount of forgiveness you can receive depends on what and where you teach:
- $17,500 – for teachers in high-need subject areas including math, science, foreign languages, bilingual education, special education, etc.
- $5,000 – for teachers in any other subject areas or specialties.
- $17,500 – for teachers at schools serving low-income families (Title I schools).
- $5,000 – for teachers at schools not qualifying as Title I schools.
To apply for Teacher Loan Forgiveness, you must submit the Teacher Loan Forgiveness Application along with any required documentation. The application timeline involves:
- Annually – Have a senior official at your school fill out Section 3 of the form each year of your 5 consecutive years of qualifying teaching service.
- After completing 5th year – Once you’ve finished your 5th consecutive year of teaching, submit the full application and supporting documents.
This program offers a great forgiveness opportunity for dedicated teachers in high-need, Title I schools who stick with teaching for at least 5 years. Just be sure to submit certification annually and complete the full application after your 5th year.
Income-Driven Repayment (IDR) Forgiveness
Federal Income-Driven Repayment plans such as IBR, PAYE, REPAYE, and ICR offer student loan forgiveness after 20-25 years of monthly payments, depending on the plan.
Here are some key points on IDR plan forgiveness:
- Made monthly payments for 20 years (undergraduate loans) or 25 years (graduate loans) under an IDR plan.
- Any remaining loan balance is forgiven tax-free at the end of the repayment period.
- Qualifying IDR plans include Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR).
- Parent PLUS loans also qualify for forgiveness under ICR plans after 25 years of payments.
- Payments of $0 under IDR plans based on income still count toward forgiveness.
- Forgiveness timeframe may be reduced for those in public service jobs.
The steps to pursue IDR forgiveness include:
- Enroll in an eligible IDR plan (must re-certify income annually)
- Make 20-25 years of on-time, qualifying monthly payments
- Remaining loan balance is forgiven tax-free at end of repayment period
Pursuing Public Service Loan Forgiveness? You can receive loan forgiveness under both PSLF and IDR plans after 10 years of qualifying payments.
IDR forgiveness provides a safety net once your loans are paid off or after low monthly payments over an extended timeframe. Just be sure to re-certify your income on time each year.
Borrower Defense to Repayment Discharge
Borrower Defense to Repayment provides federal student loan forgiveness if your school misled you or engaged in misconduct in violation of certain laws. Here are some key facts on qualifying for Borrower Defense forgiveness:
- You must demonstrate that your school committed fraud or violated state consumer protection laws related to your education services.
- Common examples include false advertising about program costs, job prospects, accreditation, school quality, or ability to transfer credits.
- You must provide evidence showing the school’s misconduct to apply.
- Loan discharge under Borrower Defense is not automatic – you must submit an application and supporting documents.
- Discharge can cover all or part of your federal student loans paid to the school.
The steps to apply for Borrower Defense forgiveness include:
- Research school issues – Review if your school has been investigated or sued for misconduct. Gather evidence.
- Complete application – Submit a Borrower Defense to Repayment application through the Department of Education’s website detailing your claim.
- Provide supporting documents – Supply any documentation supporting your claim of school wrongdoing.
- Get decision – Receive a decision on your forgiveness eligibility. Amounts forgiven may be partial to full discharge.
Borrower Defense can offer relief if your school defrauded students. But research and detailed evidence is required, so consult an expert on constructing an effective claim.
Closed School Discharge
If your school closes while you’re enrolled or shortly after leaving, you may qualify to have your federal student loans forgiven under the Closed School Discharge program. Here are the main criteria to be eligible:
- The school must have closed while you were enrolled or within 120 days of your withdrawal.
- You must not have completed your program by transferring academic credits or hours to another school, unless under a state “teach-out” transfer agreement.
- You must submit the Closed School Discharge application within 3-years of school closure, with extensions possible.
- Discharge cannot be granted for schools closed through standard accreditation withdrawal. Bankruptcy may qualify if operations cease.
- Both Direct federal loans and FFEL loans disbursed prior to July 1, 2020 may qualify.
To apply, submit a Closed School Discharge Application and any supporting documents. You’ll receive a notification with discharge decision.
Act promptly to apply if your school unexpectedly shuts down. This discharge can provide a lifeline so you avoid repaying loans for an uncompleted education.
State and Non-Profit Student Loan Forgiveness Options
In addition to federal student loan forgiveness programs, many states, private non-profits, and employers offer student debt repayment assistance. These programs help borrowers repay student loans as an incentive to enter certain occupations or areas of need.
Several examples include:
State Student Loan Repayment Programs
- Healthcare – Loan repayment aid in exchange for doctors, nurses, dentists and other medical professionals working in underserved areas and communities. Offered in over 30 states.
- Teachers – Help repaying student loans for teachers working in low-income school districts, specialties like STEM and special education, or rural areas.
- Attorneys – Loan forgiveness for lawyers working in public interest law or as public defenders and prosecutors. Offered in several states like Florida, North Carolina, Mississippi and others.
- State Employees – Student loan repayment help for applicants entering government employment. Offered in states like Virginia, Maryland, Connecticut and Texas.
Private Non-Profit and Employer Loan Repayment
- National Health Service Corps (NHSC) – Federal and state loan repayment assistance for primary health care clinicians serving underserved communities. Awards up to $50,000.
- Military repayment – Each branch offers student loan repayment aid and LRAPs as recruitment incentives. Army LRAP offers up to $65,000.
- Employer programs – Many companies, including Google, PwC, Hulu, Aetna, Estee Lauder, Uber and more offer employee student loan repayment benefits. Amounts vary by employer.
- Non-profits – 501(c) organizations like the American Cancer Society, Nature Conservancy, Red Cross and more offer LRAPs for certain roles. Aid from $100 – $10,000 per year based on tenure.
- University LRAPs – Many law schools, medical schools, and universities aid grads entering public interest careers with student loan grants and matching payment programs.
State and employer student loan repayment programs offer alternate paths to receive student debt payment assistance. Research options in your occupation and state for special aid opportunities.
Student Loan Forgiveness for Military Members
Those who serve in the U.S. armed forces have access to targeted student loan forgiveness programs. If you’re an active duty service member, reservist, or National Guard member, here are some of the main options:
Military Branch Student Loan Repayment Programs
- Army Student Loan Repayment Program – Up to $65,000 in total or $500 per month in loan repayment for certain Army specialties.
- Navy Student Loan Repayment Program – Up to $65,000 total paid at 33% of your current student loan balance.
- Air Force College Loan Repayment Program – Repays up to $10,000 per year and $60,000 total for eligible Air Force officers.
- National Guard Student Loan Repayment Program – Up to $50,000 in total student loan repayment aid for 6 year contract.
Federal Student Loan Forgiveness for Military
- HEROES Act Waivers – Waives active duty service members from having to make federal student loan payments without interest or penalty.
- Public Service Loan Forgiveness – Military service counts toward PSLF. Must still make 120 qualifying payments when not on active duty.
- Perkins Loan Discharge – Available for borrowers who serve in the U.S. armed forces in certain hostile situations.
- Total and Permanent Disability Discharge – If deemed totally and permanently disabled during military service.
Explore branch-specific and federal military student loan forgiveness programs that can repay some or all of your student debts.
Student Loan Forgiveness FAQs
How do I know if I am eligible for student loan forgiveness?
Eligibility depends on your specific loans, occupation, employer, and years in repayment. Research the criteria for federal programs like PSLF, IDR forgiveness, Teacher Loan Forgiveness and others to see if you qualify. Also look into state, non-profit and employer options. Use the PSLF Help Tool and talk to a student loan counselor to confirm eligibility.
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Does student loan forgiveness apply to private student loans?
Unfortunately no – private student loan forgiveness is very limited. Federal and state forgiveness programs only apply to federal student loans, not private loans. Some rare exceptions exist with certain state programs. Your best options are federal loan programs or refinancing private loans to more favorable rates.
What types of jobs or employers offer student loan forgiveness?
Common employers include government agencies, military, public schools and universities, nonprofit organizations, hospitals and healthcare facilities. High-need and public service fields like nursing, medicine, social work, teaching, law and more have opportunities. Research specific employer and state programs.
What is the Public Service Loan Forgiveness rejection rate?
Initial rejection rates for PSLF were very high, with 99% of applicants denied mainly due to not meeting eligibility requirements. This has improved with more awareness. Currently, 70% of PSLF applications are approved, as eligibility criteria are clearer. Carefully review requirements before applying.
Can you get student loan forgiveness with bad credit?
Yes, having bad credit does not disqualify you from federal student loan forgiveness programs. Eligibility is based on your loans, occupation, and employer – not your credit score. Private refinancing and state/employer programs may assess creditworthiness. Focus on federal options if you have bad credit.
How do I apply for student loan forgiveness?
To pursue forgiveness, first determine which federal, state or employer programs you may qualify for. Research detailed eligibility criteria and application steps. For federal programs, you’ll complete your lender’s or servicer’s loan forgiveness application and submit any required documents. Application processes vary by program.
Conclusion
The current student debt crisis has driven the need for expanded student loan forgiveness opportunities. With ballooning monthly payments and interest rates, federal and state forgiveness programs provide relief – canceling some or all student loan debt for qualifying borrowers.
Carefully assess whether you’re eligible for public service forgiveness with PSLF, teaching programs, income-driven repayment, military aid, or state/employer options. Compare criteria across each, and gather documentation to apply.
While not everyone qualifies, millions could be missing out on forgiveness opportunities. Conduct thorough research to see if you may be eligible. Student loan forgiveness provides the potential to finally eliminate the student debt burden holding back your financial future.
