Student debt is a growing crisis in the United States in 2023, with over 45 million borrowers owing more than $1.7 trillion in student loan debt. With rising tuition costs and interest rates, many borrowers struggle to pay off their loans. Student loan forgiveness programs provide relief for eligible borrowers by discharging all or part of their student loan debt. Here’s what you need to know about the main federal student loan forgiveness programs and whether you might qualify for loan forgiveness. We will also cover aspects of student loan interest and about student loan borrowers.
Overview of Federal Student Loan Forgiveness Programs and Student Loan Repayment Program
There are several federal student aid loan forgiveness programs that certain borrowers may qualify for include complete debt forgiveness:
Public Service Loan Forgiveness (PSLF)
- Forgives the remaining balance on Direct Loans after 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer
- Qualifying employers include government organizations and non-profit organizations with 501(c)(3) tax-exempt status
- Qualifying repayment plans include the income-driven repayment plans (IDR plans)
- If you feel you are eligible for this, submit a PSLF form and mention for forgiveness and PSLF.
Teacher Loan Forgiveness
- Forgives up to $17,500 for teachers who teach full-time for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families
- Eligible loans include Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans
Perkins Loan Cancellation
- Forgives all or part of the remaining balance on Federal Perkins Loans for borrowers who perform qualifying public service jobs including teaching, military service, public defenders, etc.
Income-Driven Repayment (IDR) Forgiveness
- Forgiveness may include towards loan the remaining balance on Direct Loans after 20 or 25 years of monthly payments (depends on IDR plan) through an IDR plan
- Qualifying IDR plans include Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR)
Total and Permanent Disability Discharge
- Discharges federal student loans if a doctor certifies that the borrower has a total and permanent disability and meets certain criteria
Biden Student Debt Relief Plan Announcements
In August 2022, President Biden and Biden Administration announced a few major actions regarding federal student loan debt relief plan with regards to student loans forgiven:
- One-time student loan debt relief – Eligible federal loan borrowers will receive up to $10,000 in loan forgiveness ($20,000 for Pell Grant recipients). Borrowers must earn under $125,000 individually or $250,000 for households.
- Income-driven repayment plan changes – The income cap for IDR plan monthly payments will be reduced from 10% to 5% of discretionary income. The undergraduate loan payment period shortens from 20 to 10 years.
- Public Service Loan Forgiveness program changes – Past periods of repayment will count toward PSLF, even if loan payments were under non-qualifying plans. Late recertification of employment will also be allowed.
These changes aim to provide more opportunities for borrowers to qualify for loan forgiveness and reduce monthly payments. A few Recent announcements were also made on federal family education loan.
Do I Qualify for Student Loan Forgiveness?
Here are some key factors to consider when determining if you might qualify or have eligibility for federal student loan forgiveness or may have your loan forgiven:
Type of Federal Student Loans
- Direct Loans – Eligible for PSLF, IDR forgiveness, Biden one-time debt relief
- Direct Subsidized and Unsubsidized Loans
- Direct PLUS Loans (for grad students and parents)
- Direct Consolidation Loans
- FFEL Program Loans – Generally not eligible unless consolidated into Direct Loan
- Subsidized and Unsubsidized Federal Stafford Loans
- FFEL PLUS Loans
- Perkins Loans – Eligible for Perkins Loan Cancellation
Types of Employment or Service
- Public service – For PSLF, full-time employment at a federal, state, local, or tribal government or not-for-profit organization
- Examples: teacher, nurse, government employee, military service member, public interest attorney
- Teaching service – For Teacher Loan Forgiveness, must teach at low-income elementary or secondary school or educational service agency
- Other qualifying employment – For Perkins Cancellation, includes teaching, law enforcement, military, nursing, etc.
Repayment Plan Enrollment
- For PSLF and IDR forgiveness, must be enrolled in qualifying repayment plan and make 120 (PSLF) or 240-300 (IDR) qualifying payments
- Qualifying plans include all IDR plans, 10-Year Standard Repayment Plan (qualifies for PSLF only)
- Non-qualifying plans include extended repayment, graduated repayment, etc.
Loan Status
- Loans must not be in default to qualify for forgiveness
Income Level
- For the Biden one-time debt relief, individual income under $125,000 or household income under $250,000
How to Determine if You Qualify for PSLF
The Public Service Loan Forgiveness (PSLF) program provides the most forgiveness, discharging any remaining Direct Loan debt after 120 qualifying monthly payments while working full-time for a qualifying employer. Here are some steps to determine if you may be eligible for PSLF:
Check if you have eligible loans
- Eligible: Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans, Direct Consolidation Loans
- Ineligible: FFEL Program loans (unless consolidated into Direct Loan), Perkins Loans, private student loans
- Use the studentaid.gov repayment estimator or contact your loan servicer to verify your federal loan types
Verify you work for a qualifying employer
Qualifying employers include:
- Government organizations (federal, state, local, or tribal)
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
- AmeriCorps or Peace Corps
Your employer can fill out PSLF Employer Certification Form to confirm qualifying employment.
Make sure you’re in a qualifying repayment plan
Qualifying plans include:
- All income-driven repayment plans (IBR, PAYE, REPAYE, ICR)
- 10-Year Standard Repayment Plan
Non-qualifying plans include graduated, extended, or alternative repayment plans. Use the PSLF Help Tool to verify your repayment plan qualifies.
Submit PSLF form annually and when changing employers
To track qualifying payments, submit PSLF Certification Form annually and when changing employers. Get employer(s) to sign.
After meeting 120 qualifying payments, submit PSLF application for loan forgiveness!
Steps to Receive Teacher Loan Forgiveness
The Teacher Loan Forgiveness program forgives up to $17,500 (up to $5,000 after 5 academic years, up to full $17,500 after additional 5 academic years) for Direct Subsidized and Unsubsidized Loans and Stafford Loans. Here are steps to get Teacher Loan Forgiveness:
Teach full-time at a qualifying school
You must teach full-time for 5 complete and consecutive academic years at an elementary or secondary school or educational service agency that:
- Is in a school district that qualifies for Title I funds according to the U.S. Department of Education
- Has been chosen by the state education agency and notified in writing that the schools experience high rates of teacher turnover
Private or parochial schools do not qualify for direct loan program.
Verify you have eligible loans
Eligible loans include:
- Direct Subsidized and Unsubsidized Loans
- Subsidized and Unsubsidized Federal Stafford Loans
PLUS loans and Perkins Loans do not qualify. Consolidation loans may qualify for partial forgiveness if underlying loans are eligible loans.
Submit Teacher Loan Forgiveness application and certification form
After completing the teaching service requirements, submit:
- Teacher Loan Forgiveness Application
- Teacher Certification Form completed by school’s Chief Administrative Officer
Make sure to submit annually and upon completing 5 consecutive years of qualifying teaching service.
When Can I Apply for IDR Plan Student Loan Forgiveness?
Here are some key points on when you can apply for forgiveness under income-driven repayment (IDR) plans:
- Make 240 monthly payments (20 years) under:
- Revised Pay As You Earn (REPAYE)
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR)
- Make 300 monthly payments (25 years) under Income-Contingent Repayment (ICR)
- Monthly payments must be made under qualifying IDR plan
- Only payments made after enactment of specific IDR plan count
- REPAYE: Dec 2015
- PAYE: Dec 2012
- IBR: July 2009
- ICR: July 1994
- You must recertify income annually under IDR plans
- If not recertified, payments revert to 10-year Standard Repayment Plan amount
- Best to submit IDR forgiveness application several months before end of 20- or 25-year repayment period
Checklist: Do I Qualify for Biden’s One-Time Student Loan Debt Relief?
President Biden announced up to $10,000 in one-time student loan debt relief for federal loan borrowers making under $125,000 individually or $250,000 for households. Use this checklist to determine if you qualify:
Eligible Federal Loan Requirements
I have federal Direct Loans, including:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans (for grad students or parents)
- Direct Consolidation Loans
- I do not have FFEL Program loans or Perkins Loans
- My federal student loans are not in default
Income Requirements
- My annual income is below $125,000 if filing as an individual
- My household annual income is below $250,000 if married and filing jointly or filing as head of household
Additional Requirements
- I am a U.S. citizen, permanent resident, or DACA recipient
- I filed a 2022 or 2021 federal tax return or submitted income information to the federal government
If I checked all boxes, I likely qualify for up to $10,000 in one-time federal student loan debt relief under President Biden’s new initiative! I can apply for relief once the application is available.
What to Do If You Don’t Qualify for Federal Student Loan Forgiveness
If you do not qualify for federal student loan forgiveness programs, here are some options to reduce your monthly payments or get loan forgiveness:
- Enroll in income-driven repayment plan – Lowers monthly payment to 10-20% of discretionary income. Any balance left after 20-25 years of payments is forgiven.
- Apply for unemployment deferment – Postpones payments for up to 36 months if you can show you’re actively seeking full-time employment but unable to find job in your field.
- Consolidate FFEL Loans into Direct Loan – Lets you qualify for PSLF. You can then make qualifying PSLF payments under IDR plan.
- Work for employer with student loan repayment benefit – Some employers offer to make student loan payments on employees’ behalf as an employee benefit.
- Refinance with private lender – May get lower interest rate or monthly payments. But you lose access to federal loan benefits and forgiveness.
- Submit total & permanent disability discharge application – If you have a complete and permanent disability, you can apply to have federal loans discharged.
Be sure to explore all options to find the best solution for your situation. Contact your loan servicer if you need help choosing a repayment plan or applying for benefits you may qualify for toward loan forgiveness program.
Frequently Asked Questions (FAQs) About Student Loan Forgiveness
How do I apply for public service loan forgiveness?
Submit the PSLF Certification Form annually and when you change employers to track qualifying payments.
After making 120 qualifying payments, submit the PSLF Application for Forgiveness to apply for forgiveness.When can I apply for loan forgiveness under an IDR plan?
You can apply for IDR forgiveness after making 240 qualifying monthly payments (20 years) under REPAYE, PAYE, or IBR plans or 300 payments (25 years) under ICR. Submit forgiveness application several months before your 20- or 25-year repayment period ends.
What types of jobs qualify for public service loan forgiveness?
Jobs in government organizations (federal, state, local, or tribal) and 501(c)(3) non-profit organizations qualify. This includes teachers, nurses, military service members, government employees, public interest attorneys, AmeriCorps and Peace Corps volunteers, etc.
How many years do I need to teach to get teacher loan forgiveness?
You must teach full-time for five complete and consecutive academic years in a qualifying low-income elementary or secondary school or educational service agency. This will qualify you for up to $17,500 in loan forgiveness.
What should I do if I don’t qualify for federal student loan forgiveness?
If you don’t qualify for forgiveness, consider enrolling in an IDR plan to lower payments or pursuing employer student loan repayment benefits. You can also refinance loans with a private lender or apply for disability discharge if qualified.
Can Parent PLUS loans qualify for PSLF?
Yes, Direct PLUS Loans made to graduate student or parents can qualify for PSLF if the borrower works for a qualifying employer and makes 120 monthly payments under a qualifying repayment plan.
The key to getting student loan forgiveness is understanding what federal programs you may qualify for based on your loan types, employer, repayment plan, and other factors. Evaluate the main forgiveness options to see if you may be eligible. And explore alternate steps like income-driven repayment if you don’t qualify for forgiveness.Q: What is student loan forgiveness?
A: Student loan forgiveness is a program that forgives the remaining balance on your student loan. It’s typically offered under certain conditions, such as working in public service or making a certain number of income-driven repayment plan payments.
Q: How do I know if I qualify for student loan forgiveness?
A: Whether you qualify for student loan forgiveness depends on various factors, such as the type of loan you have, your job, and your repayment plan. It’s advisable to contact your loan servicer to determine your eligibility.
Q: What is loan discharge?
A: Loan discharge refers to the release of a borrower from their obligation to repay a loan. This can occur in certain situations, such as permanent disability or closure of the school that the borrower attended.
Q: How can I get my student loan forgiven?
A: To get your student loan forgiven, you need to meet the specific requirements of the forgiveness program you’re applying for. For example, if you’re pursuing Public Service Loan Forgiveness (PSLF), you must work full-time for a qualifying employer and make 120 qualifying payments.
Q: What is the Biden administration doing to provide student loan relief?
A: The Biden administration has proposed various measures for student loan relief, including considering broad student loan forgiveness, especially for borrowers with federal student loans. It’s important to stay updated on any developments or changes in policies.
Q: What is income-driven repayment forgiveness?
A: Income-driven repayment forgiveness is a type of student loan forgiveness available to borrowers who are enrolled in income-driven repayment plans and make payments for a certain period of time. After meeting the criteria, the remaining balance may be forgiven.
Q: What is the new save plan and how does it relate to loan forgiveness?
A: The new save plan, or any program related to savings or repayment plans, may provide options for eligible borrowers to have part of their loan forgiven when specific requirements are met. It’s important to understand the details of such programs and how they can benefit you.
Q: Will I qualify for student loan forgiveness if I have a private student loan?
A: Generally, private student loans are not eligible for federal loan forgiveness programs. However, some private lenders may offer their own forgiveness or discharge options under certain circumstances. It’s recommended to check with your private loan servicer for more information.
Q: What is the Public Service Loan Forgiveness (PSLF) program?
A: The PSLF program forgives the remaining balance on Direct Loans for borrowers who work full-time for a qualifying employer, such as a government or non-profit organization, and make 120 qualifying payments under an income-driven repayment plan. It’s essential to understand the requirements and guidelines of this program if you’re considering loan forgiveness through PSLF.
Q: If I have multiple student loans, can I have all of them forgiven through a single forgiveness program?
A: It’s possible to have multiple federal student loans forgiven through a single forgiveness program, depending on the program’s eligibility requirements and your specific loan situation. However, it’s important to understand the terms and conditions of each forgiveness program and how they apply to your loans.