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Student Loan  |  August 4, 2023  |  Lisa Litant

Federal student loan forgiveness—special programs

There are several programs that can forgive your federal debt in special situations—if you qualify. Here are descriptions of those programs, along with details on eligibility requirements.

What is student loan forgiveness?

When your loan is forgiven, you don’t have to repay some or all of what you owe.^{footnote 1}

Federal loan forgiveness programs refer to federal student loans only—those made by the government, like direct loans. They do not apply to private student loans made from banks, credit unions, and other financial companies. So…federal loans—yes; private loans—no. (Many private lenders do offer loan forgiveness in cases of disability or death, depending on their policies).

Forgiveness vs forbearance: These aren’t the same. Forgiveness erases your debt; forbearance is when a lender lets you stop making payments—or lets you make smaller payments—for a short period of time, like 12 months. This is usually due to a temporary event, like an illness; you can’t make full payments right now, but you will in a few months. Forbearance is available for both federal and most private student loans. Interest continues to grow during this time even if you’re not making payments.

Here are the forgiveness programs that are currently available: 

1.  Public Service Loan Forgiveness (PSLF)

The PSLF Program cancels out the balance on your direct loans after you’ve worked full-time for a qualifying employer and made 120 monthly payments.^{footnote 2}

According to the Department of Education, to qualify for PSLF you have to:

• Work, or have worked for a U.S. federal, state, local, or tribal government agency, or non-profit organization
• Work full-time for that agency or organization
• Have federal direct loans
• Repay your loans through an income-based repayment program

If you’re a public health provider, like a nurse or nurse practitioner, you may also qualify for Public Service Loan Forgiveness.

To make sure your job is one that’s eligible for PSLF, you should read the list of qualifications and submit a Public Service Loan Forgiveness Form every year.

2.  Student loan forgiveness for teachers

• Teacher Loan Forgiveness (TLF) can forgive up to $17,500 of your federal direct or Family Federal Education (FFEL) subsidized or unsubsidized loans. Here are some of the requirements:
  • You’ve been employed as a full-time teacher at an eligible school for five complete and consecutive academic years. One of those years must have been after the 1997 – 98 academic year.
  • You may be able to qualify to have up to $17,500 of your loans forgiven if you’re a highly qualified special ed and secondary math or science teacher. Other eligible teachers can qualify for up to $45,000.
  • Teacher Loan Forgiveness Forbearance lets you defer payments until the Teacher Loan Forgiveness program begins. Interest will continue to grow during this period.

• Perkins Loan Cancellation for Teachers is a program that may forgive your Perkins Loans if you teach full-time at a low-income school or if you teach certain specified subjects.
  
  
• State-sponsored loan forgiveness programs may be available if you teach in a high-need area.

Learn more about loan forgiveness programs for teachers and see which program—Teacher Loan Forgiveness or Public Service Loan Forgiveness—is right for you. 

3.  Other federal student loan forgiveness programs

• Borrower Defense to Repayment
  The U.S. Department of Education is taking action against schools that lied or misrepresented things like job placement, how much money their graduates earned, or if their credits would be accepted at other schools. (You can’t get this forgiveness if you just weren’t happy with your school’s facilities or classes.) If you think you qualify, you need to apply with this form.
  
  
• Total and Permanent Disability Program (TPD)
  If you meet the government’s definition of total and permanent disability, you can apply for this forgiveness program—you don’t have to repay direct loans, FFEL Loans, or Federal Perkins Loans.

• Income-Based Repayment or Pay As You Earn Plans
  You can qualify for forgiveness of the remainder of your loan at the end of the repayment period after:
  • You've made the equivalent of 20 or 25 years of qualifying monthly payments (depending on the loan)
  • At least 20 or 25 years have passed (depending on the loan)

Don't let forgiveness opportunities pass you by

If you think you qualify for any of these federal loan forgiveness programs, be sure to check with your school’s financial aid office or read up at the official federal student aid site to see if your loans, your employment, or your situation are covered. If you are eligible, it could benefit your financial future.