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Published: Dec 28, 2023 16 min read
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Kiersten Essenpreis for Money

Student loans have become a common way to pay for college. In fact, 51% of bachelor's degree recipients from public and private schools have student loan debt, with an average balance of $29,400 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 many Americans are eager for help getting out of debt. While the U.S. Supreme Court struck down the Biden administration’s premiere student loan forgiveness plan, there are still several available paths to get some relief from your loans.

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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, President Joe Biden promised during his campaign that he would work to forgive some student debt. But in June, the Supreme Court ruled his first plan — which called for up to $20,000 of loan forgiveness per borrower — overstepped his executive authority.

Since then, the Biden administration has been pursuing a more limited plan to offer some loan forgiveness. The details on this plan are still being worked out through a regulatory process called negotiated rulemaking. It may be several more months until we know the specifics of who is eligible for what, but there will be fewer student loan borrowers eligible for under this plan.

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 and/or on-time payments and, after meeting the programs' requirements, the remainder of your loans are eliminated.

There are four ongoing loan forgiveness programs through the federal government:

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.

Income-driven repayment plans calculate your payments using a percentage of your discretionary income. 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. The length of the repayment period depends on the IDR plan and the type of degree you pursued.

There are multiple IDR plans, including a new, more generous plan the Biden launched in 2022 as the pandemic era payment pause was ending. The plans vary in terms of time in repayment, percentage of income and their definitions of discretionary income. Here’s an overview:

Plan Name
Loan Term
Payment Amount
Discretionary Income

Saving on a Valuable Education (SAVE)

 

Formerly: Revised Pay As You Earn or REPAYE

20 years if all loans were for undergraduate education

 

25 years if loans were used for graduate or professional education

 

Starting July 2024, the loan term will decrease to as little as 10 years for undergraduate debt

10% of your discretionary income

 

Starting in July 2024, payments will be 5% of discretionary income for undergraduate debt

Difference between your annual income and 150% of the federal poverty guideline for your family size and state

Pay As You Earn (PAYE)

20 years

10% of your discretionary income, but never more than your payment under a 10-year standard repayment plan

Difference between your annual income and 150% of the federal poverty guideline for your family size and state

Income-Based Repayment (IBR)

20 years for new borrowers as of July 1, 2014

For new borrowers on or after July 1, 2014, 10% of your discretionary income, but never more than your payment under a 10-year standard repayment plan

Difference between your annual income and 150% of the federal poverty guideline for your family size and state

Income-Contingent Repayment (ICR)

25 years

Lesser of 20% of your discretionary income or a fixed payment over the course of 12 years, adjusted on your income; forgiveness is only possible if there is a remaining balance after 25 years of payments

Difference between your annual income and 100% of the federal poverty guideline for your family size and state

For most borrowers, the new SAVE plan will be the best option. But to be sure, 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 at studentaid.gov.

While very few borrowers have had their loans forgiven through an IDR plan so far, experts predict the numbers to increase significantly in the future, since the uptake of these plans is far more common now.

Plus, millions of borrowers will get help moving toward forgiveness thanks to a one-time account adjustment the Biden administration is in the process of carrying out. The adjustment aims to ensure borrowers are getting credit toward forgiveness for every month they’ve been in repayment. It will also count certain periods of deferment and forbearance as payments.

Public Service Loan Forgiveness (PSLF)

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

You can benefit from PSLF if you work for a qualifying employer 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 U.S. Department of Education 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 3.3% of applications being approved for PSLF as of June 2023, the last available data.

If you’re interested in pursuing this forgiveness, you can use the PSLF help tool to help guide you through the process.

Teacher loan forgiveness

Teacher loan forgiveness provides up to $17,500 in loan forgiveness to teachers who 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.

Career or Volunteer Role
Amount of Cancellation

Full-time nurse or medical technician

Up to 100% for five years of service

Full-time firefighter

Up to 100% for five years of service

Full-time qualified provider of early intervention for individuals with disabilities

Up to 100% for five years of service

Full-time faculty member at a tribal college or university

Up to 100% for five years of service

Full-time speech pathologist with a master's degree working in a Title I-eligible elementary or secondary school

Up to 100% for five years of service

Librarian with a master's degree working in a Title I-eligible elementary or secondary school or in a public library serving Title I-eligible schools

Up to 100% for five years of service

Full-time law enforcement or corrections officer

Up to 100% for five years of service

Full-time attorney employed in a federal public or community defender organization

Up to 100% for five years of service

Full-time employee of a public or private nonprofit child- or family-services agency providing services to high-risk children and their families from low-income communities

Up to 100% for five years of service

Full-time staff member in the education component of a Head Start program

15% for the first through sixth years of service 

10% for the seventh year of service (100% total maximum)

Full-time staff member in the education component of a prekindergarten or child care program that is licensed or regulated by a state

15% for the first through sixth years of service 

10% for the seventh year of service (100% total maximum)

Military service in the U.S. armed forces in a hostile fire or imminent danger pay area

Up to 100% for five years of service

AmeriCorps VISTA or Peace Corps volunteer

15% for first year of service

15% for second year of service

20% for third year of service

20% for fourth year of service (70% total maximum)

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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 a 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 2022 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.

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How to Get Student Loan Forgiveness FAQ

What is the difference between loan forgiveness, discharge and cancellation?

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Forgiveness, discharge and cancellation are three terms that are used interchangeably, but they actually refer to different things. Forgiveness and cancellation refer to programs that forgive or eliminate borrowers' loans based on their actions, such as their employment, volunteer service or payments made under an IDR plan. By contrast, discharge programs eliminate loans based on circumstances outside borrowers' control, such as a disability or school closure.

Do you have to pay taxes on student loan forgiveness?

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Under the American Rescue Plan, the government made student loan forgiveness and discharge programs exempt from federal income taxes through 2025. After that, whether your forgiven loans are taxed will depend on the program. For example, loans forgiven under PSLF are exempt from federal income taxes, but loans forgiven under IDR plans are not. Student loan forgiveness may be subject to state income taxes, but how loan forgiveness is handled varies by state.

How do you qualify for student loan forgiveness?

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Eligibility requirements for student loan forgiveness vary by program. Generally, you need to work in public service or in a high-need area — such as healthcare or education — for several years to qualify for loan forgiveness.

Can private student loans be forgiven?

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Private student loans aren't eligible for federal loan forgiveness or discharge programs like PSLF, IDR loan forgiveness, Borrower Defense to Repayment or Perkins loan cancellation. However, you may qualify for national or state repayment assistance programs. Note that if you refinance your federal loans, those will become private loans and will no longer qualify for any federal programs.

Can parents get loan forgiveness?

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Parents who took out Parent PLUS loans to pay for their child's college education aren't eligible for federal loan forgiveness programs like IDR loan forgiveness or PSLF in their current state. However, there is a workaround that’s currently available: you must consolidate your loans with a federal Direct Consolidation Loan and enroll in the income-contingent repayment plan. Once you do that, you can qualify for both IDR loan forgiveness and PSLF.

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.

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