Student Loan | September 12, 2022 | Lisa Litant
What you'll learn
Along with the new proposal for canceling a portion of federal student loan debt, there are existing federal programs that forgive debt in specific situations. Here are descriptions of those federal programs, along with details on eligibility.
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.
There’s also the COVID-related federal student loan payment relief program, which has suspended federal loan payments temporarily with 0% interest. This isn’t forgiveness, though. As it stands now, when the payment relief program ends, borrowers will have to continue to make loan payments.
Types of specialty federal student loan forgiveness programs
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 studentaid.gov, to qualify for PSLF you have to:
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.
Important news: You have until October 31, 2022 to take advantage of a “limited PSLF waiver.” This may give you credit for periods that previously didn’t qualify for PSLF. Here’s info on how to take advantage of the PSLF waiver.
2. Student Loan Forgiveness for Teachers
Learn more about Teacher Loan Forgiveness and see which program—Teacher Loan Forgiveness or Public Service Loan Forgiveness—is right for you.
3. Other federal student loan forgiveness programs
If you think you qualify for any of these federal programs, be sure to check with your school’s financial aid office or read up at studentaid.gov to see if your loans, your employment, or your situation are covered. If not, should you plan on all your student loans being forgiven in the future? Don’t stop making payments right now. But as the government continues to work out plans for easing the federal student loan debt problem, keep checking to see if there are new forgiveness programs.