Student Loan Forgiveness: What You Need to Know
If a genie showed up on your doorstep and promised to grant you three wishes, it’s a pretty good bet that one of those wishes would be to make all of your student loans magically disappear.
Unfortunately, we can’t clear your balances with the snap of our fingers. (We would if we could. We promise.) But we can tell you about all the options you have to get those loans forgiven.
Student loan forgiveness is not exactly magic, but you’ll feel like it is when you see your loan disappear.
Public service loan forgiveness
As the Holy Grail of student loan forgiveness programs, Public Service Loan Forgiveness (PSLF) promises student debt freedom after just 10 years of on-time payments—no matter how much debt you have remaining.
To qualify for PSLF, you must work for a public service employer such as a government agency, university, or a non-profit. The particular position you hold is irrelevant as long as you work for a qualifying employer.
You also have to make 120 on-time, full payments under an income-driven repayment plan while you work for the qualifying employer.
To see if you qualify, fill out the PSLF Employment Certification Form. The U.S. Department of Education recommends that you fill the form out as soon as possible so that you don’t unintentionally make payments that don’t qualify for the program.
Perkins loan cancellation
If you have a Perkins loan, you may be eligible to have the loan balance cancelled in full. You’ll need to work in a qualifying profession, such as in public education, as a public defender, or as a law enforcement officer.
Volunteer work, such as in the Peace Corps, can also satisfy the cancellation requirements.
If you qualify, a portion of your loan will be forgiven after each year of full-time work, which generally must take place in a high-needs area.
To apply for Perkins loan cancellation, contact the school or loan servicer that provided your Perkins loan.
Teacher loan forgiveness
Many teachers take advantage of Perkins loan cancellation or PSLF, but there are also forgiveness programs specifically for public educators.
You may be eligible for the Teacher Loan Forgiveness Program, which forgives up to $17,500 of subsidized or unsubsidized federal student loans. To qualify, you must work five consecutive years at an approved school or education agency—generally one that serves a low-income population.
Learn more about student loan forgiveness for teachers.
Medical professional loan forgiveness
With some of the highest average student-debt loads, medical professionals are great candidates for loan forgiveness.
Under the Federal NURSE Corps Loan Repayment Program, nurses that serve high-need populations in critical nurse-shortage areas can get up to 85% of their loans paid off after three years of employment.
Doctors and other medical professionals—such as pharmacists or dentists—have access to a number of loan forgiveness programs, such as National Health Service Corps loan repayment assistance or the Students to Service program. Under these programs, borrowers may earn up to $120,000 toward their loans for committing to work two or three years in high-need areas.
Loan forgiveness for lawyers
Lawyers don’t benefit from any federal forgiveness programs that are specific to attorneys. However, if you work in a qualifying job, you may be able to participate in PSLF or Perkins loan cancellation.
Several niche programs also exist. These provide repayment toward student loans for lawyers in particular fields, like the Department of Justice Attorney Student Loan Repayment Program, which may provide up to $60,000 to lawyers who work at the Department of Justice for three years.
Military loan forgiveness
Military personnel can take advantage of PSLF, but if you’ve served in the armed forces, you may also be eligible for National Defense Student Loan Discharge.
Veterans and active duty military who spent at least one year in a hostile fire or imminent danger pay areas may be eligible to have their loans partially discharged. If you believe you qualify for student loan discharge, contact your loan servicer.
Income-driven repayment plan forgiveness
If you’re on an income-driven repayment plan, your loans will be automatically forgiven after 20 or 25 years of on-time payments, depending on your plan.
Disability loan forgiveness
If you have become totally and permanently disabled, you may quality for complete discharge of your student loans. To apply, you’ll need to provide verifying documentation of your disability.
State-based loan forgiveness
Many states have repayment assistance plans for positions that serve specific needs—such as teachers who commit to work in particular low-income areas. Some states also have forgiveness programs for nurses, nurse educators, and other medical professionals.
Employer-based loan forgiveness
Employer student loan forgiveness programs vary from company to company. Some may offer a set amount annually, while others may require several years of employment before granting any student forgiveness.
Consider asking your human resources department if they have a student loan repayment program.
Student loan forgiveness is a great outcome for a lot of borrowers, but not everyone qualifies for one of these programs. If loan forgiveness isn’t in your future, don’t despair. You can take control of your student loan debt.