Student Loan Forgiveness Programs

Student loan forgiveness programs are federal programs designed to provide financial relief for select borrowers. If you enter certain occupations or public service roles, you may qualify for these loan forgiveness programs. Borrowers are required to make monthly payments as required until meeting set qualifications for loan forgiveness.

After reaching that point and obtaining approval from a loan servicer, the borrower’s loans are discharged or reduced. If the loan is forgiven in full, the borrower is no longer responsible for making monthly student loan payments.

Learn how to qualify for student loan forgiveness, including which jobs may make you eligible for one of these federal programs.

Teacher Loan Forgiveness Program

Borrowers who enter the teaching profession may qualify to have part of their federal student loans forgiven through the Teacher Loan Forgiveness Program. Loans which qualify for forgiveness through this program include:

  • Direct Subsidized Loans.
  • Direct Unsubsidized Loans.
  • Subsidized Federal Stafford Loans.
  • Unsubsidized Federal Stafford Loans.
  • Perkins Loans (called “Teacher Cancellation” for this type of loan only).

PLUS loans are not eligible for the Teacher Loan Forgiveness Program.

Only certain teaching positions qualify borrowers for the program. In order to be eligible, you must fulfill the following criteria:

  • You teach at an elementary or secondary school that qualifies as a low-income school according to federal definitions.
  • You have been employed as a full-time teacher for five complete, consecutive academic years.
  • You meet the requirements of a “highly qualified” teacher (you have full state certification and hold a license to teach in that state).
  • You are not in default on any of your qualifying loans.

The Teacher Loan Forgiveness Program offers different levels of loan forgiveness based on the nature of the borrower’s position. In general, those who are full-time elementary or secondary school teachers can receive up to $5,000 in loan forgiveness. Special education teachers and high school mathematics and science teachers may be eligible for up to $17,500 in loan forgiveness.

To apply for the Teacher Loan Forgiveness Program, follow these steps:

  1. Print and complete the Teacher Loan Forgiveness Application.
  2. Have the chief administrative officer at the school at which you performed your qualifying teaching service to complete the certification section. If you taught at more than one qualifying school, you must have the chief administrative officer at each of those schools certify your eligibility.
  3. Return the completed application to your loan servicer. If you have loans held by different loan holders, you must submit a separate form to each one.
  4. Continue making monthly payments as scheduled while awaiting your loan servicer’s decision.

Public Service Loan Forgiveness Program

The Public Service Loan Forgiveness Program allows qualifying borrowers to have the remaining balance of select federal student loans forgiven. Only Subsidized and Unsubsidized Direct Loans can be forgiven. However, FFEL Loans and Federal Perkins Loans may also be forgiven if the borrower has consolidated them into a Direct Consolidation Loan.

In order to be eligible for this loan forgiveness program, you must be employed by one of these types of organizations:

  • A federal, state, local, or tribal government organization.
  • A not-for-profit organization with 501(c)(3) tax-exempt status.
  • Organizations that provide another type of qualifying public service, such as military service, law enforcement, public safety, public health, early childhood education, etc.  

Labor unions, partisan political organizations, and for-profit government contractors are not considered to be qualifying employers for this program.

If you do work for one of the qualifying employers, you must meet these criteria in order to be eligible for Public Service Loan Forgiveness:

  • You are employed full time or work at least 30 hours per week (either at one qualifying employer or through part-time work at two or more qualifying employers).
  • You have made 120 qualifying monthly payments (payments do not have to be consecutive).

In order for a student loan payment to qualify for this program, it must be made in full and on time while employed by a qualifying employer. Your loans must also be under a qualifying repayment plan in order for payments to be eligible for forgiveness; you can’t make qualifying payments if your loans are in deferment or forbearance, you have in-school status, or your loans are in the grace period.

Keep in mind that if you have a Direct Consolidation Loan, only qualifying payments made on that new loan will count toward your total. Payments made on FFEL Program loans or Perkins loans before consolidation are not considered as qualifying payments.

To apply for the Public Service Loan Forgiveness Program, you must complete and submit an Employment Certification form for each employer where you worked while making qualifying payments. Continue making monthly payments while you await a decision.

Borrowers who want to make sure their payments qualify for the Public Service Loan Forgiveness Program can also submit an Employment Certification form annually and when switching to a new employer. This allows the loan servicer to verify that payments qualify so borrowers can ensure they’re taking the correct steps to become eligible for loan forgiveness.

Loan Cancellation or Discharge

Though not quite the same as the two official loan forgiveness programs mentioned earlier, there are several similar options that allow borrowers to have their loans canceled or discharged if certain criteria are met. You may qualify for one of these programs if:

  • You are a member of the Peace Corps or VISTA.
  • You are a member of the U.S. armed forces.
  • Your school closed before you could complete your program of study.
  • You suffered a permanent disability.
  • You declared bankruptcy (in rare cases).

Potential Changes to Loan Forgiveness Programs

Borrowers who plan to request loan forgiveness through one of these programs should keep an eye out for potential changes. While the programs are currently in place, political decisions could influence the future of this type of repayment assistance. The program could potentially be changed significantly or even completely eliminated. For now, continue to track your eligibility and submit paperwork as necessary. It is not recommended that borrowers make major financial decisions under the assumption that all or part of their federal student loans will be forgiven.