Written by Kevin Payne
If you borrowed money from the federal government to pay for college expenses, you might be eligible for student loan forgiveness through several federal programs. These loan forgiveness, loan repayment, and loan cancellation programs carry specific requirements borrowers must meet to qualify for forgiveness. Eligibility for loan forgiveness is often tied to your career field or employer and completing service requirements in areas of need. Some programs, like income driven repayment forgiveness, offer forgiveness with fewer restrictions.
Federal loan forgiveness programs are only for borrowers with outstanding federal student loan debt. Private student loans aren't eligible for federal loan forgiveness programs.
If you're thinking about pursuing forgiveness to help pay off your student loan debt, the following programs could help you reach your goals if you qualify.
Public Service Loan Forgiveness (PSLF)
Public Service Loan Forgiveness (PSLF) is a federal student loan forgiveness program open to borrowers working for the government or qualifying nonprofit employers. To qualify, you must work full-time (at least 30 hours per week) for a qualifying employer while making 120 qualifying loan payments. [1]
Qualifying PSLF employers include:
- Government organizations (any level)
- 501(c)(3) nonprofits
- Religious organizations
- AmeriCorps or the Peace Corps
- Select nonprofit organizations without 501(c)(3) status that provide a qualifying public service[1]
Eligible borrowers who meet loan payment requirements can have their remaining student loan balance forgiven tax-free. You must have Direct loans (or consolidate your loans to a Direct loan) to be eligible. [1]
Loan payments do not need to be consecutive or made while working for one employer[1]. If you leave your job to work for a nonqualifying employer, payments during that time wouldn't count towards PSLF, but would start up again if you switched jobs for another qualifying employer. The same is true if you change jobs between two qualifying employers.
Income-Driven Repayment Forgiveness
You can qualify for loan forgiveness regardless of your employer by making loan payments through an income-driven repayment (IDR) plan. If you're enrolled in an IDR plan, your remaining balance is forgiven after 20 to 25 years of qualifying payments, depending on the plan. [2]
There are four income-driven repayment plans available to qualified federal loan borrowers:
- Income-Based Repayment
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income-Contingent Repayment [2]
IDR plans allow qualified borrowers to cap monthly loan payments at a percentage of their monthly income. Each plan carries its own loan term, guidelines, restrictions, and income cap based on your discretionary income. [2]
Traditionally, the IRS treats forgiven debt from IDR loan forgiveness as taxable income. However, the American Rescue Plan Act of 2021 temporarily exempts loan forgiveness under IDR plans from being taxed through 2025. [3]
Teacher Loan Forgiveness
If you teach full-time in a low-income public elementary or secondary school, you may be eligible for teacher loan forgiveness after working for five consecutive years. You must have outstanding Direct or Stafford loans taken out after Oct. 1, 1998. The program offers up $5,000 or $17,500 in loan forgiveness, depending on your area of expertise:
- Up to $17,500: Secondary mathematics or science teachers or special education teachers teaching at the elementary or secondary level.
- Up to $5,000: Highly-qualified full-time elementary or secondary education teachers who don't teach mathematics, science or special education
You must teach full-time for at least five consecutive years at a qualifying school or educational service agency that serves low-income students to be eligible. [3]
Federal Perkins Loan Cancellation
If you have federal Perkins loans, you can qualify for up to 100% in loan cancellation if you work in a qualifying public service job for five years. Typically, borrowers receive a specific percentage of their loan amount canceled based on their years of service.[3]
You can qualify for Perkins Loan Cancellation as a teacher if you work full-time in a public or nonprofit elementary or secondary school system teaching qualifying subjects like mathematics, science, foreign languages, and special education. [3]
Perkins loan borrowers can also qualify for cancellation through other types of employment or volunteer service, including law enforcement and other first responders, public defender, speech pathologist, librarian, and other select career paths. [3]
Total and Permanent Disability Discharge
You can potentially get your student loan debt canceled if you're unable to work due to being totally and permanently disabled. To qualify for Total and Permanent Disability Discharge, you must provide documentation of your disability. [4]
You are subject to a three-year post-discharge monitoring period if approved for loan discharge through the program. The Department of Education monitors your disability and finances for up to three years. If you fall outside the program guidelines during that period, the government will reinstate your loan repayment obligation. [4]
NHSC Loan Repayment Program
Eligible nurses with federal student loan debt may qualify for forgiveness through the National Health Service Corps. To be eligible for the NHSC Loan Repayment Program, you must commit to working for two years in a health professional shortage area.
Loan repayment amounts vary depending on whether you work full-time or part-time. Full-time nurses are eligible for up to $50,000 loan repayment for a two-year commitment. Part-time nurses are eligible for up to $25,000 for a two-year work commitment. You may also qualify for additional loan repayment through one-year service commitments after your initial two-year commitment is complete.[5]
Nurse Corps Loan Repayment Program
Nurses can also get loan forgiveness through the Nurse Corps Loan Repayment Program. The Health Resources & Services Administration provides up to 85% loan repayment for unpaid student loans for registered nurses (RNs), advanced practice registered nurses (APRNs), and nurse faculty.
To qualify for loan forgiveness, you must commit to working two years in a critical shortage area or an eligible nursing school (as a nurse faculty).
The program provides 60% loan forgiveness for qualifying nursing education loans for two years of service. You can also receive an additional 25% of loan repayment for a third year of service after the initial commitment. [6]
Substance Use Disorder Workforce Loan Repayment
The Substance Use Disorder (SUD) Workforce Loan Repayment program is a federal program designed to combat the nation's opioid crisis.
The program is open to eligible healthcare workers in the following specialties:
- Allopathic/osteopathic physicians
- Physician assistants
- Psychiatrists
- Nurse practitioners
- Certified nurse-midwives
- Psychiatric nurse specialists
- Health service psychologists
- Licensed clinical social workers
- Marriage and family therapists
- Licensed professional counselors
- SUD counselors
- Pharmacists
- Registered nurses
The program provides up to $75,000 in student loan repayment to eligible nurses in exchange for a three-year service commitment. Nurses that work part-time during their service commitment are eligible for up to $37,500 in loan repayment.[7].
Faculty Loan Repayment Program
The Faculty Loan Repayment Program is for eligible faculty members at approved health professional schools. The Health Resources & Services Administration program provides up to $40,000 in loan repayment for agreeing to a two-year service commitment. You must come from a disadvantaged background and have an eligible health professions degree or certificate to qualify for the program. Not only does the program offer loan repayment, but it also provides additional funding to offset tax burdens. [8].
Veterinary Medicine Loan Repayment Program
Loan forgiveness isn't only for individuals who provide healthcare for people. The Veterinary Medicine Loan Repayment Program (VMLRP) provides up to $25,000 in loan repayment annually, up to $75,000 total. Eligible veterinarians must agree to a three-year service commitment in a NIFA-designated veterinarian shortage situation.[9]
To qualify, you must have graduated from an American Veterinary Medical Association Council on Education-accredited veterinary school and have at least $15,000 in qualifying veterinary educational loan debt. [10]
State-Sponsored Student Loan Forgiveness Programs
In addition to federal student loan forgiveness programs, you may qualify for loan forgiveness through your state if available. Many states offer state-sponsored loan forgiveness programs for eligible borrowers living and working within the state. Forgiveness guidelines and amounts vary between each state and program. Check with your state government to determine if any loan forgiveness programs are available for residents.
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