Different Options for Student Loan Forgiveness

Jill Bridges
Expert Contributor
Last Updated:
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  • Certain types of government-issued student loans can be forgiven.
  • You will usually need to work in a public service career and/or have made uninterrupted loan payments before your loan will be forgiven.
  • Loans can sometimes be discharged, but only for extraordinary circumstances such as disability, identity theft, or death.

Student loans can be one of the longest-lasting forms of debt. Some people take decades to pay off their loan. Fortunately, if you’ve got a direct federal student loan or a Perkins loan, you can have your loan forgiven in a variety of ways. Read on to learn about student loan forgiveness so that you can decide which option is right for you.

Basics of Student Loan Forgiveness

One thing to keep in mind about student loan forgiveness is that the process is not easy. You will need to dedicate a lot of time and energy to have your loan forgiven, so discover whether forgiveness is right for you before you begin the process. If you absolutely do need your federal student loan forgiven, there are three different options depending on your loan type:

  • Have your loan forgiven based on your career
  • Have your loan forgiven based on your history of making payments in a payment plan
  • Have your loan discharged based on extraordinary circumstances

At this point, it’s important to make a distinction between having a loan forgiven and having a loan discharged. Generally, loans are only forgiven if you have been working in a certain field for a set period of time. Also, forgiveness is only available for federal student loans. Both government and private loans can be discharged in certain circumstances, but this happens very rarely.

Using the Public Service Loan Forgiveness Program

The College Cost Reduction and Access Act of 2007 created the Public Service Loan Forgiveness (PSLF) program. The purpose of the PSLF program was to encourage college graduates to work in careers in the public service sector by making it easier for them to clear their student burdens. Three types of loans are eligible for the PSLF program:

Different Options for Student Loan Forgiveness
  • Direct Consolidation Loans
  • Direct Federal Student Loans
  • Direct Plus Loans

If you want to qualify for the PSLF program, you must meet certain requirements. First, you must have consolidated your loans in an eligible repayment program and have made your payments on time for 10 years after consolidation. Second, you need to work full-time (30 hours or more a week) in a public service job. For the purposes of this program, a public service sector job includes:

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  • A government job at any level
  • A position in a 501(c)(3) organization
  • A job in a nonprofit organization that provides a public service but isn’t tax exempt
  • A full-time volunteer position in AmeriCorp or Peace Corps

Loan Forgiveness for Different Careers

Depending on the career you have chosen, you may have access to different loan forgiveness programs. Each of these programs will have specific requirements that you must meet to have your loan forgiven. For instance, since 1998, teachers dealing with student loans have had access to the Teacher Loan Forgiveness Program.

If you’re a teacher who wants to apply for this program, you need to have taught in a qualifying school for five consecutive full school years. You may be able to receive up to $17,500 in forgiveness if you qualify for this program. Other careers that may be eligible for loan forgiveness include:

  • Nurses, nurse practitioners, and nurse faculty members who work in areas with a nursing shortage or in high-population areas.
  • Doctors, pharmacists, dentists, and workers in the mental health care field.
  • Lawyers who work in public service, such as in the Department of Justice.
  • Military members.

Canceling Federal Perkins Loan

Federal Perkins Loans are different from other types of government loans. Instead of the loan coming directly from the government, the school is the actual lender. To cancel a Federal Perkins Loan, you need a full-time position in one of the following careers:

  • Corrections officer or police officer
  • A librarian who has earned a master’s degree
  • A medical technician or nurse
  • A firefighter.
  • Special education teachers for disabled students in public schools or other qualifying institutions

These aren’t the only qualifying positions, so check with the financial aid office at your school to determine if your Federal Perkins Loan is eligible for forgiveness. If you qualify, your loan will be broken down over a five-year period.

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Loan Forgiveness Based on Repayment

In some cases, you can have your student loan forgiven based on the amount of time you have been making payments under a qualified repayment plan. With this option, you don’t need to be working in a specific career; you only need to have an unbroken history of making loan payments. In general, you need to have made on-time payments for between 20 and 25 years for your loan to be forgiven. Qualified payment plans include:

  • Pay As You Earn Repayment Plan: This plan requires that you demonstrate financial hardship. You will be eligible for loan forgiveness after making on-time payments for 20 years.
  • Revised Pay As You Earn Repayment Plan: Also requires 20 years of payment, but doesn’t require a demonstration of financial hardship.
  • Income-Based Repayment Plan: Requires on-time payments totaling 25 years.

If you qualify for forgiveness under one of these plans, you should be aware that whatever remaining amount of your loan is forgiven is considered taxable income.

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Discharging a Student Loan

Depending on your personal circumstances, you may also be able to have a student loan discharged. A loan is usually discharged by a judge, and both government and private loans can be discharged.

If you want to have a student loan discharged, you will need to prove that an extraordinary circumstance would prevent you from paying your loan. For example, you could request that your loan be discharged due to death or permanent disability, or because the loan resulted from identity theft.

If you’re dealing with student loan, credit card, or tax debt, Solvable is here to help you. We have reviewed the best debt relief companies in the country so that finding the company that’s right for you is easy and convenient. We can help you get in touch with these companies so that you can finally pay off your debt. Get started with us today.


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Jill Bridges
Expert Contributor
Last Updated: