Student Loan Forgiveness Programs

Are you wondering what types of loan forgiveness opportunities are available to you? Look no further. We review the major existing federal and private student loan forgiveness opportunities. You’ll recognize some of the most popular ones and will probably encounter some you didn’t know existed. We hope you find a nugget or two which will help you manage your student loan burden.

Programs reviewed:

Public Service Loan Forgiveness (PSLF)

Public service loan forgiveness is the most popular federal loan forgiveness program and can be extremely beneficial for those who are eligible. If your student loan debt is equal to or more than your annual income, you should look into this program. As of November 2022, more than 360,000 public servants have had their loans forgiven via PSLF.

Who is eligible?

Generally speaking, any borrower is eligible who works for a non-profit organization or for the government. To check if you employer qualifies, use the PSLF help tool. You’ll need your employer’s employment identification number (EIN).

What types of loans are eligible?

There are a number of old federal programs which require direct federal consolidation before becoming eligible for public service loan forgiveness (PSLF).

What are the requirements?

How much may be forgiven?

Any outstanding loan amount (principal and interest) will be forgiven tax-free after you have completed 120 qualifying payments and your loan servicer agrees.

How long does this program take?

PSLF takes about 10 years to complete. Give yourself time in case your loan servicer miscounts a few payments.

MOHELA is the federal loan servicer who works with borrowers pursuing PSLF. Their website has a nifty payment tracker that shows your progress as you pursue the program.

For more on PSLF, see this post.

Please note – on July 1, 2023 there will be some rule changes impacting PSLF. The employment requirement will be simplified to 30 hours per week. Certain periods of forbearance or deferment (usually military) will count as PSLF credits. And, they will allow borrowers to make payments in installments or in a lump sum rather than just monthly.

Long Term Income-Driven Repayment Forgiveness (Taxable IDR Forgiveness)

Income driven repayment (IDR) taxable forgiveness is another method borrowers with federal loans pursue to receive federal loan forgiveness. Borrowers should only consider this method if their student loan debt is 2.5x, 3x, or more than 4x their income.

Who is eligible?

Borrowers enrolled in income driven repayment programs are eligible.

What types of loans are eligible?

What are the requirements?

How much may be forgiven? 

The outstanding loan amount will be forgiven after you have completed the payment term. The forgiven amount will be taxed for borrowers receiving this forgiveness after 2025. The taxed forgiven amount is often referred to as the “tax bomb.” To prepare for the tax bomb, borrowers will usually set aside money in a savings or investment account commonly termed a side fund to prepare for the future tax bill.

How long does this program take?

If you’re interested in pursuing IDR forgiveness, we recommend you meet with one of our student loan experts to help you run the numbers.

Federal Perkins Loan Cancellation

Who is eligible?

Teachers who work at low income schools, in special education or work in areas of need (shortage areas) are eligible.

What types of loans are eligible?

Federal Perkins Loans

What are the requirements?

How much may be forgiven? 

It is possible to qualify to have up to 100% of federal Perkins Loans forgiven.

How long does this program take?

Loan Repayment Assistance Programs

Who is eligible?

This varies by occupation but doctors and most healthcare professionals can apply.

What types of loans are eligible?

Federal and private student loans

What are the requirements?

Work for a non-profit or state based loan repayment assistance program for the designated period.

How much may be forgiven? 

Forgiveness amount is dependent on occupation and employer.

How long does this program take? 

Length varies by occupation and employer.

U.S. Military Student Loan Forgiveness Options

US military student loan forgiveness and repayment options are available while in school, training or even post-graduate. Each branch in the military has their own loan repayment assistance program.

Here are the major categories

Army

Who is eligible?

All active duty and reserve dental and medical providers.

What types of loans are eligible?

Federal student loans

What are the requirements?

How much may be forgiven?

How long does this program take?

Up to 3 years.

Navy

Who is eligible?

Active duty naval health professionals are eligible.

What types of loans are eligible?

Federal student loans

What are the requirements?

How much may be forgiven?

Up to $65,000 in 3 annual payments

How long does this program take? 

Up to 3 years

Air Force

Who is eligible?

Active duty Air Force health professionals

What types of loans are eligible?

Federal student loans

What are the requirements?

How much may be forgiven? 

$40,000 maximum

How long does this program take? 

Minimum 2 years of service

National Guard

Who is eligible?

National Guard soldiers

What types of loans are eligible?

Federal student loans

What are the requirements?

How much is forgiven?

$50,000 maximum

How long does this program take? 

6 years of service

Teacher Loan Forgiveness

Who is eligible?

Teachers

What types of loans are eligible?

What are the requirements?

How much may be forgiven? 

Up to $17,500

How long does this program take? 

5 years

Veteran Affairs Education Debt Reductions Program (EDRP)

Who is eligible?

This varies by occupation but doctors and most healthcare professionals can apply.

What types of loans are eligible?

Federal or private student loans

What are the requirements?

How much may be forgiven?

How long does the program take?

National Health Service Corps Loan Repayment Program (NHSC LRP)

Who is eligible?

Medical professionals with disciplines in primary care, dental care and behavioral/mental health.

What types of loans are eligible?

Federal and private student loans

What are the requirements?

Employed two years full-time or part-time clinical practice at an NHSC-approved site.

How much may be forgiven?

How long does this program take?

Two years.

National Institutes of Health (NIH) Loan Repayment Program

Eight NIH Loan Repayment Programs

Who is eligible?

Health care providers

What types of loans are eligible?

Federal and private student loans

What are the requirements?

How much may be forgiven? 

Up to $70,000 of loan repayment. $35,000 paid annually.

How long does this program take? 

One to two years

Indian Health Services (IHS) Loan Repayment Programs

Who is eligible?

Health care providers

What types of loans are eligible?

Federal and private student loans

What are the requirements?

How much may be forgiven? 

Up to $40,000

How long does this program take? 

2 years

Medical school loan repayment assistance programs(LRAPs) by state

There are many LRAPs across the country. Look up your state here to see what potential savings you can find!

For example, the California State Loan Repayment Program offers up to $50,000 for a two-year service contract.

Nurse Corps Loan Repayment

Who is eligible?

Borrowers employed as a nurse in an underserved community or at an eligible nursing school or nurse facility are eligible.

What types of loans are eligible?

Federal and private student loans

What are the requirements?

How much may be forgiven? 

Up to 85% of nursing education debt can be forgiven. 60% will be granted after two years of service. Then, you may be eligible for a third year and an additional 25% of your loans.

How long does this program take? 

2-3 years

Student Loan Discharge

Student loan discharge is treated differently from forgiveness. Federal and private student loans have the possibility to be discharged. Here are several ways loans are discharged:

Be advised, federal and private loans will be treated differently. Some of these situations can be handled by booking a consult with us and there are others which may require review by a law firm that deals with loan discharge.

While there are many different loan forgiveness programs, it is necessary to make sure you are on the right path for your personal student loan situation. For some borrowers, the best path involves “living like a resident”, refinancing your loans to lower your interest accrual and simply paying them off as soon as possible. To help determine the best personalized plan for your student loan situation, book a consult with StudentLoanAdvice today.

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