Have you ever wished your student loans would disappear? Student loan forgiveness may sound like a pipe dream to many of the 45 million borrowers who have racked up over $1.5 trillion in student loan debt.
On the bright side, there are some options for helping to erase portions of this debt. In fact, there are many programs available to assist with student loan debt – if you qualify.
If you’re wondering if all or any of your student loan debt is eligible to be forgiven, this guide will walk you through which loans qualify for student loan forgiveness and list some of the most popular student loan forgiveness programs in the country.
What Is Student Loan Forgiveness?
Student loan forgiveness means that you are no longer responsible for paying your student loan, regardless of your balance or loan standing. Student loan forgiveness is also often referred to as loan cancellation or discharge.
Student loan forgiveness may seem more like a dream, but many graduates aren’t aware of the large number of student loan forgiveness programs that exist.
What Types of Student Loans Can Be Forgiven?
There are two types of student loans – federal and private. Federal student loans are insured by the government and typically have lower interest rates, while private student loans are backed by private lenders and usually allow you to borrow large sums of money.
Typically, federal student loans are more likely to be forgiven than private student loans, but this varies depending on the forgiveness program you’re applying for. There’s also a cap on how much debt can be forgiven, depending on your student loan forgiveness program.
We’ll walk you through the different programs next, so you can find out if you’re eligible for forgiveness.
Top 10 Student Loan Forgiveness Programs
There are many student loan forgiveness programs. Some require students to work in a certain occupation for a specified amount of years to receive forgiveness, while others set low-income limits as criteria.
We’ll review the top 10 student loan forgiveness programs below.
1. Public Service Loan Forgiveness
The Public Service Loan Forgiveness (PSLF) program was created in 2007 to encourage graduates to pursue careers in the public service sector. Public service jobs include federal, state, local, and tribal government careers, not-for-profit jobs, and some AmeriCorps and Peace Corps volunteer members.
Under this student loan forgiveness program, qualifying candidates can receive forgiveness on any federal loan, including Direct PLUS Loans, Direct Subsidized and Unsubsidized Loans, and Direct Consolidation Loans. Private loans cannot be forgiven under this program.
To qualify, you must work full time in a public service job and make 10 years’ worth of on-time payments on your federal loans.
2. Income-Driven Repayment Plan
If you have a low income after graduation, you may be eligible for an income-driven repayment plan. Student loan forgiveness kicks in if there is a balance left over at the end of the repayment period.
Typically, when you enroll in an income-based repayment plan, your student loan becomes eligible for forgiveness after 20 to 25 years. This plan is usually only available for federal student loans.
3. Teacher Student Loan Forgiveness
If you’re a teacher working full time in a low-income school district for at least five consecutive years, you may be eligible for student loan forgiveness under the Teacher Loan Forgiveness Program.
This student loan program forgives up to $17,500 in federal student loan debt for teachers. Your loans must be in good standing (paid on time) to qualify. Private loans cannot be forgiven under this forgiveness program.
4. Student Loan Forgiveness for Nurses
If you have a nursing degree, you have a few options for obtaining student loan forgiveness. First, you can apply to work in an underserved community in the United States for at least two years under the Nurse Corps Loan Repayment Program. This program offers 60% forgiveness on loans for nurses who work in underserved areas for two years and an additional 25% forgiveness for those who remain for a third year of employment.
Nurses who work for the government or not-for-profit organizations could also be eligible for forgiveness through the PSLF program mentioned above.
5. State-Level Forgiveness Programs
If you’re a teacher, doctor, nurse, or lawyer, you might be entitled to student loan forgiveness programs through the state you work in, on top of any federal programs you might be eligible for. For instance, in Indiana, full-time health care professionals can receive student loan repayment awards for working in designated communities for four years.
Other states offer similar programs that have slightly different rules and qualifications based on your career and income level.
6. Military Student Loan Forgiveness
If you currently serve in a branch of the military (Army, Navy, Air Force, Marines, National Guard, Coast Guard, or one of the reserves), you may be eligible for student loan forgiveness. The amount you’re eligible will depend on your specific branch.
7. Closed School Discharge
If your university closes while you’re enrolled for the semester or soon after you’ve withdrawn, you could be eligible for student loan forgiveness. The program could forgive 100% of your federal loans if you were unable to complete your program of study due to a school closing.
You’re not eligible for this forgiveness program if you’ve already transferred your credits to another institution upon requesting loan forgiveness.
8. Disability Student Loan Forgiveness
If you become permanently disabled and are unable to work, you can qualify for complete student loan forgiveness through the Total and Permanent Disability (TPD) Discharge. To qualify, you’ll need to submit medical records proving your disability.
9. Industry-Based Student Loan Forgiveness
Many job fields also offer student loan forgiveness programs. For instance, automotive workers can apply for the Specialty Equipment Market Association (SEMA) forgiveness program.
Veterinarians who work in underserved areas for three years can also receive up to $25,000 per year in loan forgiveness through the USDA’s Veterinary Medicine Loan Repayment Program.
Depending on your field of study, you might qualify for repayment assistance or full forgiveness if you choose to work in certain research facilities or fields for a set number of years upon graduation. The requirements and benefits vary based on your industry.
Be sure to research your job and loan forgiveness opportunities to learn if you qualify.
10. Company-Based Forgiveness Programs
Some companies may offer loan forgiveness or total or partial reimbursement to employees who complete undergraduate or graduate degrees in fields designed to improve their current careers. Many companies set strict rules about which majors or classes qualify for forgiveness, so be sure to do your research ahead of time if you’re expecting your company to foot the bill down the road.
The amount of repayment, terms, and qualification criteria can vary greatly depending on your company, so be sure to talk to your HR representative to find out if your company offers any student loan forgiveness services.
What If I Don’t Qualify for Student Loan Forgiveness?
If you’re not eligible for any of the primary student loan forgiveness programs, don’t worry. College Finance can help you get your student loan payments under control. We offer top tips on how to consolidate your existing student loans (so you save even more money) and can help you figure out which loans you should pay off first, so you can decrease your monthly payment.
If you’re a low-income earner, we can also help you understand your repayment options and weigh the pros and cons of an income-contingent repayment plan.
We also offer resources to help you learn how to pay down your debt more quickly, so you’re not tied down by student loan payments.