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How to get student loan forgiveness

Learn about qualifying for student loan forgiveness

by Jami Barnett, Ph.D. ConsumerAffairs Research Team
Graduate receiving diploma

Loan forgiveness

Student loan debt is the second largest type of debt in America, falling only behind mortgages. According to the New York Federal Reserve, Americans have $1.3 trillion in student loan debt, and the average borrower has an outstanding balance between $30,000 and $40,000.

No matter how much student loan debt you have, paying it back is tough. Many professional and governmental groups recognize this difficulty, and they’ve introduced student loan forgiveness programs to ease this burden for people in qualifying situations.

People volunteering

Public Service Loan Forgiveness

Volunteering or working in the public service sector is the primary way to get student loans forgiven. Many would enjoy working for a nonprofit or joining a service organization, like the Peace Corps or Americorps, but they feel that their finances and student loan debt are holding them back. That’s where the Public Service Loan Forgiveness (PSLF) program comes in. If you work for a nonprofit or a qualifying state or federal program for 10 years, you may be eligible to have the remainder of your student loans forgiven.

Eligible loans

  • Direct Subsidized and Unsubsidized Loans

  • Direct PLUS Loans

  • Direct Consolidation Loans

  • Federal Perkins Loans and Family Education Loans IF you consolidate them first with an eligible loan, which creates a Direct Consolidation Loan

Requirements

  • Make 120 student loan payments on time and under one of the following repayment plans: Income-Based Repayment (IBR), Pay As You Earn Repayment (PAYE), Revised Pay As You Earn (REPAYE), Income-Contingent (ICR) or Standard Repayment

  • Work as a full-time employee of an eligible organization, such as the state or federal government, a 501 (c)3 nonprofit organization, the Peace Corps or Americorps

Visit the Public Service Loan Forgiveness website to see specific details about qualifications and eligibility.

Man using calculator

Repayment plans and loan forgiveness

Some repayment plans are based on your income. If you make on-time payments under one of these plans for a set number of years, usually 20 or 25 depending on when you borrowed money, the remainder of your debt will be forgiven after that period.

These repayment plans qualify for forgiveness:

  • Income Based Repayment (IBR)

  • Pay as You Earn Repayment (PAYE)

  • Revised Pay as You Earn Repayment (REPAYE)

  • Income-Contingent Repayment (ICR)

It’s important to note that you might end up paying more money overall under these plans because you’ll pay a greater amount of interest over the years. Read the details of each plan carefully so you understand your options. Your loan servicer isn’t required to counsel you on which option best suits your needs–that's up to you.

To learn more about repayment plans and calculate each one’s total costs, visit the Federal Student Aid website.

Nurses with clipboard

Loan forgiveness for certain professions

Some professions (like medicine and law) require years of education, which may add to your student loan debt. To offset this cost and encourage people to pursue careers in these fields, many organizations have developed loan forgiveness programs. People seeking work in the professions listed below may be eligible for some type of student loan forgiveness program. Many of these programs require you to work in an area that’s experiencing shortages.

  • Teachers

    Teachers can often get part of their loans forgiven for working in an area with a high concentration of low-income students. Use this federal website to find a qualifying school in your state. Some states have separate programs to attract teachers. For example, Texas has a program to get teachers to move to areas where there is a shortage. Look for state programs to make sure you’re not missing out on a forgiveness program.

  • Nurses

    Nurses may qualify for loan forgiveness through the NURSE Corps Loan Repayment Program by working in nursing education or working in an area with a critical nursing shortage. Nurses may also qualify for state- or employer-sponsored forgiveness programs. Contact your employer or your state’s department of health services to learn about your options.

  • Doctors

    Doctors who work in an underserved area may be eligible for loan forgiveness through the National Health Service Corps Loan Repayment Program. Some employers and many states have separate programs for loan forgiveness or repayment help. Talk to your employer about loan repayment options in your area.

  • Other health professions

    Many health-related professions other than doctors and nurses can get help with their student loans. For example, the California State Loan Repayment Program (SLRP) helps certified nurse midwives, dental hygienists, mental health providers, nurse practitioners, physician assistants and pharmacists who work in underserved areas. Contact the department of health services to see if programs like these exist in your state.

  • Lawyers

    Most state bar associations have loan forgiveness programs for lawyers. For example, the TAJF-Loan Repayment program in Texas helps legal aid attorneys. State governments and employers may also offer loan forgiveness. Contact your state’s bar association to learn about similar programs.

  • Members of the military

    If you decide to serve in the United States military after you complete your college degree, you can have a portion of your loans forgiven after each year of service. Talk to a recruiter to learn more about the student loan benefits of joining the military.

  • Veterinarians

    Many areas of the country don’t have enough veterinarians. If you agree to work in one of those areas for at least three years, you can qualify for loan forgiveness through the Veterinary Medicine Loan Repayment Program.

Woman filling out paperwork

Conclusion

Many people struggle to pay back their student loans, which often results in defaulting on those loans. If you’re at risk of defaulting on a loan, contact your service provider to learn about your options. If you’re already working in a career that will qualify you for student loan forgiveness, you should take advantage of that benefit.

If you’re currently in school and trying to decide on a major, consider how your future career will impact the amount of debt you accrue. Talk to the career center at your college and your academic advisor about career possibilities and average salaries. Make sure to apply for all the scholarships that you’re eligible for, too.

If you don’t work in a field or location that qualifies for loan forgiveness, make sure you understand your repayment options and the benefits of consolidating your loans. You may not reduce your debt by changing your repayment plan or consolidating your loan, but you might make your immediate financial situation more manageable.

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by Jami Barnett, Ph.D. ConsumerAffairs Research Team

Jami Barnett, Ph.D., is an experienced researcher, and she believes consumers have a right to clear and honest information about products. In her role at ConsumerAffairs, she thoroughly researches products and companies by interviewing experts, reviewing research studies, reading governmental regulations and investigating customer service responses. Her work gives consumers the information they need to make smart purchasing decisions.