How to Get Student Loan Forgiveness

Student loans have become a common way to pay for college. In fact, 54% of bachelor's degree recipients from public and private schools have student loan debt, with an average balance of $29,100 per borrower, according to an annual report from the College Board.

With so many people taking out loans for their education, it's no surprise that the U.S. Supreme Court decision striking down President Joe Biden's student loan debt relief plan made waves immediately after its release. Although that path to debt relief is now a dead end, there are other ways to qualify for student loan forgiveness and get some relief from your loans.

Table of Contents:

• Income-driven repayment forgiveness
• Public Service Loan Forgiveness
• Teacher loan forgiveness
• Perkins loan cancellation
• Student loan discharge programs
• Other student loan forgiveness programs
• Student loan forgiveness FAQs

Biden’s one-time student loan forgiveness

Student loan debt has reached an all-time high, with borrowers owing $1.77 trillion in outstanding student loans.

To address this problem, Biden announced a new, one-time debt relief initiative in August 2022. Under this new plan, federal loan borrowers that earned less than $125,000 ($250,000 for couples that are married and file jointly) could qualify for up to $10,000 of loan forgiveness. Borrowers that received a Pell Grant while in college could qualify for up to $20,000 of loan forgiveness.

Millions of borrowers excitedly submitted applications for debt relief online through studentaid.gov, but legal challenges blocked them from moving forward. The Supreme Court took up two cases related to Biden's proposal (Department of Education v. Brown and Biden v. Nebraska) and announced their decision on the last day of June. While the first was unanimously dismissed for lack of standing, the Supreme Court came down in a 6-3 ruling on Biden v. Nebraska that officially rejected the forgiveness plan.

The court said Biden had overstepped his authority.

Federal student loan forgiveness programs

If you are one of the more than 43 million borrowers with outstanding federal student loans, you may qualify for a loan forgiveness program. These programs require several years of service or payments and, after meeting the programs' requirements, the remainder of your loans are eliminated.

There are four ongoing federal loan forgiveness programs:

Income-driven repayment forgiveness

An income-driven repayment (IDR) plan can be a good way to reduce your payments if you have federal Direct loans and cannot afford the amount required under a 10-year standard repayment plan.

IDR plans calculate your payments using a percentage of your discretionary income and a loan term of 20 or 25 years. Depending on your income and family size, you could qualify for a payment as low as $0. If you still have a balance at the end of your IDR loan term, the government will forgive the remainder of your loans.

There are currently four IDR plans, and they vary in terms of time in repayment, percentage of income and their definitions of discretionary income:

You can use the federal loan simulator tool to see which IDR plan would give you the lowest monthly payment or allow you to qualify for loan forgiveness faster. You can also apply for an IDR plan online.

Proposed changes to IDR plans

In November 2022, the Biden Administration released a proposal that would make significant changes to IDR plans. Rather than create a new plan, the proposal would amend Revised Pay As You Earn (REPAYE).

The proposed rules would change the definition of discretionary income for REPAYE to the difference between the borrower's income and 225% of the federal poverty guideline for their family size and state. And borrowers would have to pay just 5% of their discretionary income, which could significantly reduce borrowers' payments.

The proposal would also shorten the path to loan forgiveness, allowing some borrowers to qualify for IDR forgiveness after just 10 years of payments.

This proposal is not a guarantee that these changes will be made; there could be legal challenges before the new REPAYE plan can go into effect.

Public Service Loan Forgiveness (PSLF)

PSLF is a federal loan forgiveness program for workers that choose careers working for government agencies or non-profit organizations rather than for-profit companies. Since those career paths tend to be lower-paying, PSLF incentivizes work in public service.

You can qualify for PSLF if you work for a qualifying non-profit organization or government agency full-time for at least 10 years. To be eligible for loan forgiveness, you must enter into a qualifying payment plan — one of the four IDR plans — and make 120 monthly qualifying payments.

Previously, loan forgiveness through PSLF was exceedingly rare; in fact, the Government Accountability Office reported that 99% of applications were denied. As a result, the government overhauled the program and made some substantial changes.

It provided a limited-time waiver that gave borrowers credit for all prior payments regardless of the payment plan they were on and simplified the application process for military service members. Consequently, the approval rate has improved, with 2.2% of applications being approved for PSLF as of March 2023, the last available data.

Teacher loan forgiveness

Teacher loan forgiveness provides up to $17,500 in loan forgiveness to teachers that work for at least five full and consecutive academic years at a low-income school or education service agency. To qualify for the full $17,500 of loan forgiveness, teachers must teach certain high-need subjects, such as secondary mathematics, science or special education.

Perkins loan cancellation

The Perkins loan program is no longer in effect, but borrowers with existing federal Perkins loans can potentially qualify for loan cancellation based on their employment or volunteer service.

Teacher Perkins loan cancellation

Teachers can get up to 100% of their Perkins loans forgiven if they work full-time in a public or non-profit elementary or secondary school in one of the following roles:

• Teachers at schools that serve low-income families
• Special education teachers
• Teachers of high-need subjects, such as science, mathematics or foreign languages

Volunteer and employment Perkins loan cancellation

Some forms of employment or volunteer service can allow you to qualify for cancellation of some or all of your Perkins student loans. The amount of forgiveness varies based on your career or volunteer work and years of service.

Student loan discharge programs

Loan forgiveness or cancellation is typically based on your service or employment, while discharge is typically based on circumstances outside of your control. Federal loan borrowers may qualify for discharge of their existing loans through the following programs:

1. Bankruptcy discharge

It is difficult to discharge student loans through bankruptcy, but not impossible. To qualify, you must show the bankruptcy court that repaying your loans would cause you undue hardship, (meaning you couldn't maintain a minimal standard of living), the hardship will continue for several years and you've made good faith efforts to repay the loan before declaring bankruptcy.

2. Borrower defense to repayment discharge

Borrower defense to repayment discharge can apply if your college or university misled you or engaged in other misconduct and violated state laws. If you are eligible, some or all of your federal loans will be discharged. To find out if you qualify, contact your loan servicer.

3. Closed school discharge

If your college closes while you're enrolled or within 180 days after you withdrew, you may be eligible for closed school discharge. If you qualify, your federal student loans used to pay for that program will be discharged.

4. Death discharge

With some loans, the borrower's estate is responsible for the loan even if the borrower passes away. But with federal loans, the loan is protected by death discharge. If the borrower — or in the case of Parent PLUS Loans, the student on whose behalf the PLUS Loans were taken out — dies, the loan balance is discharged.

5. False certification discharge

If a school falsely certified your eligibility for student loans — for example, if you don't have a high school diploma or a diploma equivalent or did not authorize the loan application — you could qualify for discharge of your loans.

6. Forgery discharge

Identity theft is a common problem, and college students are often targets. If your identity was stolen and fraudulent loans taken out in your name, you may qualify for discharge of your loans under the forgery discharge program.

7. Total and permanent disability discharge

If you have federal student loans and become totally and permanently disabled, you can qualify for discharge of up to 100% of your loans through total and permanent disability discharge (TPDD). Eligibility is based on documentation from one of the following sources:

• The U.S. Department of Veterans Affairs (VA)
• The Social Security Administration (SSA)
• Your physician

You can learn about the program's eligibility requirements through the TPDD federal student aid site.

Other student loan forgiveness programs

If you aren't eligible for a federal forgiveness or discharge program because you don't meet the eligibility requirements or because you have private student loans, there may be other ways to get help with your loans. Partial or full loan forgiveness and repayment assistance is available from several sources:

National loan repayment programs

There are national student loan repayment programs that provide money to repay your student loans in exchange for a work commitment in high-need areas or fields. Typically, these programs can be used to repay both federal and private loans. For example:

• U.S. Department of Justice Attorney Student Loan Repayment: This program provides up to $6,000 per year in student loan repayment benefits, up to a lifetime maximum of $60,000. To qualify, attorneys must be full-time employees of the Department of Justice and commit to a three-year service obligation.
• Indian Health Service (IHS) Loan Repayment: The IHS Loan Repayment program provides healthcare professionals with up to $25,000 in repayment benefits per year, up to a maximum of two years. In return, healthcare professionals must commit to working for at least two years in health facilities serving American Indian or Alaska Native communities.
• National Health Service Corps (NHSC) Loan Repayment: The NHSC Loan Repayment program is for licensed primary care clinicians, such as physicians, nurse practitioners, dentists, dental hygienists, psychologists, licensed clinical social workers and certified nurse midwives. In exchange for a two-year service commitment to work in a qualifying facility in a designated shortage area, participants can receive up to $50,000 in loan repayment assistance.
• Nurse Corps Loan Repayment: Offered through the Health Resources & Services Administration (HRSA), the Nurse Corps Loan Repayment program repays up to 85% of unpaid student loans for registered nurses, advanced practice registered nurses and nurse faculty. The program requires a two-year service commitment, but you have the option of participating for a third year.

State and local student loan assistance programs

States are actively recruiting professionals in high-need areas, such as education, healthcare, and science and engineering. If you are willing to commit to working in designated areas for several years, you could qualify for help repaying some of your debt. For example, the following states have loan repayment assistance programs:

• New Jersey STEM Loan Redemption Program: In New Jersey, eligible professionals that work in science, technology, engineering or mathematics (STEM) can qualify for up to $2,000 per year in student loan repayment assistance, and participants can receive the award for up to four years.
• Utah Rural Physician Loan Repayment Program: Under this program, physicians in Utah that agree to work in eligible rural hospitals for at least two years can receive up to $20,000 per year in student loan repayment assistance.
• Teach for Texas Loan Repayment Assistance: Teachers that teach subjects that have designated shortages in Texas' public schools can qualify for up to $2,500 in student loan repayment for each year of service, up to a maximum of five years.

Most states operate at least one loan repayment assistance program, but they are typically limited to healthcare professionals, teachers and lawyers. To find out if you qualify for help from your state with your loans, contact your state education agency.

Debt relief tied to military or volunteer service

If you served in a branch of the military or participated in a volunteer service organization, you may qualify for assistance repaying your loans. For example:

• Army Loan Repayment: This program was designed to encourage new recruits to enlist in the Army. It provides up to $65,000 in loan repayment assistance for at least three years of honorable service.
• Army Reserve Loan Repayment: Participants in the Army Reserve can also qualify for repayment assistance for some of their outstanding student loans based on their years of service.
• AmeriCorps Loan Repayment: For each year of AmeriCorps service, you can receive up to the maximum value of the Pell Grant for that year to repay your loans. For the 2023-2024 award year, the maximum amount you can receive is $7,395.

Student loan repayment assistance from your employer

A growing number of employers are offering student loan repayment benefits to recruit and retain talented employees. According to the Employee Benefit Research Institute's survey of companies with at least 500 employees, 25% of employers currently offer student loan repayment benefits, including payment matches, debt counseling and student loan refinancing programs.

If you're eligible for student loan payments from your employer, the company will typically match your payments up to a monthly maximum. For example, they may match your payments up to $100 per month and up to $10,000 over the duration of your employment. By taking advantage of these programs, you can pay off your loans faster and save money.

Summary of Money’s How to Get Student Loan Forgiveness?

There are a surprising number of loan forgiveness and discharge programs available, including the 23 specific programs we listed above. Whether you can qualify for federal loan programs or are eligible for a state loan repayment program, exploring these options can provide you with significant relief.