Student Loan Forgiveness: What It Is and Who Is Eligible

The Biden administration keeps trying to push student loan debt relief through, but many of these proposals have been struck down in federal court.

However, there are still forgiveness plans available, and these can save you thousands of dollars while helping you pay off your student debt faster.

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What Is Student Loan Forgiveness?

Student loan forgiveness is an option for certain federal student loan holders. You can have the remaining balance on your student loans forgiven, canceled, or discharged if you meet certain criteria.

There are several different forgiveness programs available, most of them available to workers in certain public services or government jobs.

There are also plans that will forgive the remaining balance if you are on an income-based repayment plan.

While many federal loans are eligible for forgiveness, not all loan types will qualify. 

READ MORE: What Biden’s New Student Debt Relief Plan Means for You

Types of Student Loan Forgiveness

There are several types of student loan forgiveness plans, including income-driven plans, borrower defense plans, and options available to teachers, military members, and more.

Public Service Loan Forgiveness (PSLF)

Public Service Loan Forgiveness forgives the remaining balance on federal student loans for employees of certain government agencies or non-profit organizations, who have made 120 consecutive on-time payments.

Eligible jobs for PSLF include:

• U.S. government organizations (federal, state, local, or tribal), including U.S. military
• Section 501(c)(3) non-profit organizations
• Other not-for-profit organizations providing qualifying public services

The easiest way to check if your job qualifies is by using the employer search tool.

Eligible loans include:

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans

While Parent PLUS loans do qualify, you’ll need to consolidate them to move to an IDR plan so there is a remaining balance to be forgiven. You must use a Direct Consolidation loan to qualify. 

Once you’ve completed 10 years of on-time payments (120 total payments) while being employed for 10 years at a qualifying job, you can submit your PSLF application via the PSLF Help Tool.

Income-Driven Repayment (IDR) Plans

You may qualify for lower payments through an Income-Driven Repayment plan. You can apply for an IDR plan through Studentaid.gov. Your payments are based on a percentage of your discretionary income.

The latest update to IDR plans is called the SAVE plan and was rolled out in 2023. This replaces the old REPAYE plan and lowers the payment amounts for many borrowers.

IDR plans offer loan forgiveness for remaining balances after making on-time payments for 20 to 25 years (depending on your loan type). Undergraduate loans can be forgiven after 20 years, while graduate loans can be forgiven after 25 years.

You must make on-time payments for the entirety of the loan period to qualify. Loans will be forgiven automatically once you meet the criteria.

School closure / borrower defense

There are forgiveness options if you attended a school that closed, or that defrauded or misled students.

These loan forgiveness options are a bit subjective and require an application that will be reviewed before approval.

• School closure forgiveness: If you attended a school that closed while you were attending or shortly after you unenrolled, and you have a Direct Loan, Federal Family Education Loan (FFEL) loan, or Federal Perkins Loan, you may be eligible to have your student loans forgiven. 
• Borrower defense forgiveness: If a for-profit school defrauded you, or the school significantly misled you about the programs you enrolled in, you may be able to have your student loans forgiven. This is only available for Direct Loans borrowers.

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Other loan forgiveness programs

There are other niche forgiveness programs available if you work in certain employment fields or are military

AmeriCorps programs

If you volunteer for the AmeriCorps NCCC, AmeriCorps VISTA, or AmeriCorps State and National programs, you may be eligible to receive an education award you can use to pay back federal student loans.

Army National Guard program

The Army National Guard allows eligible employees to earn up to $7,500 per year in student loan repayment.

Teacher Loan Forgiveness (TLF)

Public school teachers can have up to $17,500 forgiven. You must teach in a low-income school or educational service agency for five consecutive years to qualify.

To apply, you can submit a TLF application form — a portion must be filled out by the chief administrative office of your school or agency.

Teachers may also qualify for PSLF and might get a higher amount forgiven versus with TLF, so review your loans to choose the right one.

Nurse Corps loan repayment program

This program may forgive up to 85% of unpaid nursing education debt for registered nurses (RNs), advanced practice registered nurses (APRNs), and nurse faculty (NF).

You must work in a Critical Shortage Facility (CSF) or eligible nursing school (as faculty) for at least two years to earn 60% loan forgiveness, and an optional third year to receive an additional 25% loan forgiveness.

Perkins Loan Discharge

If you have a Perkins loan and meet certain employment or volunteer requirements, you may be able to have your loans discharged.

Disability or death

Certain loans may be discharged if you become permanently and totally disabled.

As well, all remaining loan balances are forgiven in the event of your death — so no one will be responsible for covering your unpaid debt if you're gone.

Bankruptcy (in rare cases)

While most bankruptcy cases cannot discharge student loan debt, some federal loans may be forgiven in specific “hardship” circumstances.

READ MORE: How To Apply for Student Loan Forgiveness

Pros and Cons of Student Loan Forgiveness

Getting your student loans forgiven is very appealing to many struggling with student loan debt. There are important considerations on both sides to understand before you apply.

Pros

• You may be able to save thousands of dollars.
• Low-income households can get some much-needed relief.
• Many forgiveness plans promote working in public service jobs, such as becoming a teacher, nurse, or member of the military.

Cons

• Most student loan forgiveness plans require 10 years (or more) to complete, which is a long time to have a large debt balance.
• You may owe income tax on the amount that's forgiven, depending on the type of loan you have and when your loan is discharged.
• If you miss one payment or don’t apply correctly, you may not have your loans forgiven.

READ MORE: Best Student Loan Repayment Plans

FAQs

How do I know if my student loans will be forgiven?

To know if your student loans qualify for forgiveness, check loan eligibility options through StudentAid.gov. You can see the current loan forgiveness programs, including how to qualify and what steps you need to take.

When can I apply for student loan forgiveness?

You can qualify for student loan forgiveness once you have met the qualifying criteria for your type of loan forgiveness.

For PSLF, you can apply after being employed at a qualifying public service or government job for 10 years and after making 120 qualifying on-time payments to your loans.

For IDR, your remaining loan balances will automatically be forgiven after 20 years of on-time payments (for undergraduate loans) or 25 years of on-time payments (for graduate loans).

Other forgiveness program application times will vary.

Does student loan forgiveness forgive all student loans?

Student loan forgiveness is only available for qualifying federal student loan borrowers that meet the eligibility criteria. This may include working in a public service or government job, or paying on your loans through an IDR plan.

Only the remaining loan balance left is forgiven (not your entire initial loan balance).

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