It is not unusual for people to wish that student loan debt would just go away. There is of course no way to just snap one’s fingers and make that debt disappear. But there are several ways that student loans can be forgiven.
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There are many student loan forgiveness programs that can pay off some or all of your student loan debt. Many of these programs are set up for students who work in public service, healthcare, education and related areas. There also are some state forgiveness programs.
If you are tired of your student loan debt, check out the programs below to see if you may be able to use student loan forgiveness to your benefit.
1. Public Service Loan Forgiveness (PSLF)
The Public Service Loan Forgiveness program assists people with debt who work in public service jobs. Professionals in many fields may be able to qualify for PSLF. This program cares more about where you work more than what your exact occupation is.
To be eligible, you need to be working full time at a local, state or federal agency. Entities with a 501(c)(3) designation also are acceptable for this program. Note that religious-based non profit organizations do not qualify.
Loans that qualify under PSLF are direct subsidized and unsubsidized loans; Direct PLUS loans; and Direct Consolidation Loans. Federal Perkins Loans and Family Education Loans only qualify if you have consolidated them into a Direct Consolidation Loan.
Requirements include making 120 payments on time and working full time at an organization that qualifies.
2. Forgiveness with Income-Based Repayment (IBR)
This is not exactly a student loan forgiveness program. Instead, IBR caps your student loan payments at 10-15% of your income. After you have made regular payments for 20 or 25 years, the rest of the loan can be forgiven. Keep in mind that loans that are forgiven under IBR can be taxed as regular income.
Loans that qualify under IBR are:
- Direct Subsidized and Unsubsidized Loans
- Direct Grad PLUS loans
- FFEL Stafford Loans
- FFEL PLUS Loans for grad students
- Federal Perkins Loans if they have been consolidated
3. Forgiveness with Pay As You Earn (PAYE)
Pay As You Earn is like Income-Based Repayment. Your payment is capped at 10% of your monthly discretionary income. Borrowers are required to make payments on time for 20 years. Your loan balance then is forgiven. This loan forgiveness is treated like taxable income.
Loans that qualify are:
- Direct Subsidized and Unsubsidized Loans
- Direct Grad PLUS loans
- Subsidized and Unsubsidized FFEL Stafford Loans, if consolidated
- FFEL Loans made to grad students, if consolidated
- Federal Perkins Loans, if consolidated
- Direct Consolidation Loans, unless they repaid Parent PLUS Loans or FFEL Loans made to parents
4. Forgiveness With Revised Pay As You Earn (REPAYE)
This program works similarly to Pay As You Earn. Your payments are limited to 10% of your monthly discretionary income. Undergraduate loans can be forgiven after 20 years. Graduate school loans are forgiven after 25 years. Note that there is no income eligibility requirement for this program. If you have an eligible loan, you may qualify.
One of the issues with this program is that if you start earning a high salary, your payment could rise considerably.
Anyone with a qualifying federal student loan can qualify for this program. These loans also qualify:
- Direct Subsidized and Unsubsidized Loans
- Direct Grad PLUS loans
- Subsidized and Unsubsidized FFEL Stafford Loans, if consolidated
- FFEL Loans made to grad students, if consolidated
- Federal Perkins Loans, if consolidated
- Direct Consolidation Loans, unless they repaid Parent PLUS Loans or FFEL Loans made to parents
5. Federal Perkins Loan Cancellation
You may be able to qualify for a cancellation of your Federal Perkins Loan. This cancellation and discharge program will forgive a certain amount of your loans for every year you serve. Over the years, you may qualify for a 100% forgiveness of your loan.
Perkins Loan Cancellation is highly popular for teachers; many people who work in the education field qualify. Other possibilities are librarians, speech language pathologists and works in Head Start. Some of the other workers who can qualify are police officers, firefighters, nurses, and public defenders.
6. Student Loan Forgiveness For Teachers
There are several student loan debt forgiveness programs for teachers. One of the most popular is Teacher Loan Forgiveness. Teachers have to work for a school that qualifies for a minimum of five years in a row. The amount of loan forgiveness depends upon the subject taught. Most teachers in elementary schools get $5000. But secondary school teachers in the sciences and math may receive up to $17,500.
To qualify, you generally need to teach in an elementary or secondary school that serves people in lower income neighborhoods. You also need to have worked full time as a teacher for a minimum of five years. A state certification or teacher’s license is also required.
7. Student Loan Forgiveness for Nurses
Nurses have several options for having their loans forgiven at the state and federal levels. One of the major ones is the NURSE Corps Loan Repayment Program.
If you are working as a nurse in an underserved community, you may get as much of 60% of your debt forgiven if you work for two years. If you work for a third year, you may get another 25% forgiven.
To qualify, you have to be an RN, nurse practitioner, or nurse educator. Nurses need to be working in an area with a serious nursing shortage.
Many states also have their own loan repayment assistance programs for nurses. In Illinois, qualifying nurses can get awards as high as $5000 per year for four years.
8. Loan Repayment for Doctors and Healthcare Professionals
Doctors, physician assistants and other healthcare workers have several options for student loan forgiveness.
One of them is the National Health Service Corps (NHSC). This program will provide you with up to $50,000 in tuition assistance if you are a licensed healthcare provider. This includes doctors, PAs, dentists, and mental health professionals. You have to work for two years at an eligible site, which is typically in a needy rural or urban area.
Another option is the Students to Service Program. If your last year of medical service, this program may forgive up to $120,000. You need to work as a primary healthcare provider at needy sites for three years.
The Bottom Line
Many people struggle for years to pay off their student loans. But there are student loan forgiveness programs that can be a big help. It is smart to carefully consider your career and speciality, because if you choose right, you might be able to have much of your student debt forgiven.
References
- Complete List of Student Loan Forgiveness Programs. (n.d.). Retrieved from https://studentloanhero.com/featured/the-complete-list-of-student-loan-forgiveness-programs/
