When you find yourself in a tough spot financially, you may wonder how you’ll pay for things ranging from groceries to your student loans.
Your thoughts might jump to student loan forgiveness options. What is the federal student loan forgiveness program? There are 2 main forgiveness programs for federal student loans: the Public Service Loan Forgiveness (PSLF) program, and the Teacher Loan Forgiveness Program. Both programs forgive federal loans for borrowers who work for a specific employer and after they make a certain number of payments on their loans. Student loan forgiveness exists through income-driven and public service routes.
Understanding the Difference between Forgiveness, Cancellation, and Discharge
Student loan forgiveness, cancellation, and discharge all get you to your end goal – where you’re no longer required to repay your student loans – but they are all slightly different.
- Student Loan Forgiveness: This means your student loans are forgiven because of your employer or career. Typically, loans are forgiven when you serve the public in some capacity.
- Student Loan Cancellation: Similar to forgiveness, student loans can be canceled because of your job.
- Student Loan Discharge: Your federal student loans can be discharged when you incur a permanent disability, if your school closes, if you die, or other rare life events.
How to Qualify for Student Loan Forgiveness through PSLF
You may qualify for student loan forgiveness under the Public Service Loan Forgiveness (PSLF) Program. This program is specifically focused on forgiving student debt for people who work for and dedicated their early careers to public service.
Take a quick look at the qualifications for federal student loan forgiveness under PSLF below.
1. Work Full Time for a Qualifying Agency or Organization
To qualify for student loan forgiveness, you need to work for a U.S. federal, state, local, or tribal government or not-for-profit organization employer. You must also complete an employee certification form annually. You may also qualify for the PSLF Program if you do certain non-profit work, have served or are currently serving in the military, or practice medicine in under-served areas.z
2. Have Student Loans that Qualify for PSLF
Only Federal Direct Loans qualify for loan forgiveness, though you may be able to consolidate your other federal student loans into a Direct Loan. You should check with your student loan servicer to see if your loans would qualify before consolidation.
3. Have the Qualifying Repayment Plan
You must have a qualifying repayment plan under PSLF. Qualifying repayment plans include Income-based repayment plan (IBR), Pay As You Earn (PAYE), or Income Contingent Repayment (ICR). Learn the breakdown of these types of federal student loan repayment plans:
4. Make 120 Qualifying Payments
As long as you make payments on time and under a qualifying repayment plan while working full-time for a qualifying employer, PSLF forgives the remaining balance on your Direct Loans.
It will take at least 10 years before you can qualify for PSLF under this program. You’ll run into a few restrictions:
- You can’t qualify sooner if you make additional monthly payments or payments higher than the amount that is due.
- Payments made in school or during deferment periods don’t count but you can make lump-sum payments upfront that get distributed over time.
5. Fill Out a Forgiveness Application for PSLF
You can fill out the PSLF form in one of two ways:
- Use the PSLF Help Tool to start the PSLF form. You can then print it out for your current employer — and you — to sign.
- Download the PSLF form and complete all sections.
Double-check your form before submitting to ensure that you’ve fully completed it and make sure your loans and employment qualify for the PSLF Program.
Note: If you intend to qualify under a different type of discharge program, take a look at all your options.
How to Qualify for Student Loan Forgiveness through Teacher Loan Forgiveness
The Teacher Loan Forgiveness program forgives federal student loan debt for educators who teach full-time for 5 complete and consecutive academic years in a low-income school or educational service agency. You may be eligible for up to $17,500 on Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Stafford Loans.
Here’s how you qualify for student loan forgiveness through the Teacher Loan Forgiveness program:
1. Work Full-Time at a Qualifying School
You must be employed as a full-time, “highly qualified” teacher for five completed and consecutive academic years. At least one of those years must have been before the 1997-1998 academic year.
The government defines a “highly qualified” teacher as a teacher who has: obtained a bachelor’s degree, received a full state certification, and not had their certification or licensure requirements waived on an emergency, temporary, or provisional basis.
The school you work at must be an elementary school, secondary school, or educational service agency that serves low-income students.
2. Have Student Loans That Qualify for the Teacher Program
You must not have had an outstanding balance on Direct Loans or Federal Family Education Loans as of Oct. 1, 1998.
Loans you’re seeking forgiveness for must have been made before the end of your five academic years of qualifying teacher service.
3. Fill Out an Application for Teacher Loan Forgiveness
You can submit a completed Teacher Loan Forgiveness Application to your loan servicer after you’ve completed your qualifying five years of teaching.
The administrative officer at your school or agency where you teach must complete the certification portion of the forgiveness application.
Once you’re done with the application, you will submit that to your federal student loan servicer. If you have multiple loan servicers, you must submit a separate form for each.
Can Private Student Loans Be Forgiven?
Unfortunately, private student loans do not qualify for forgiveness. If you’re having trouble repaying your private student loans, you may want to consider reach out to your loan servicer and ask about deferment or forbearance options.
If deferment or forbearance are not viable options for you, refinancing your student loans may be a more beneficial alternative.
How Do You Qualify for Student Loan Forgiveness?
During financial challenges, many Americans may ask the question, “How do you get your student loans forgiven?”
Do your research on how federal student loan forgiveness works and learn more about College Ave’s student loan refinancing resources if you have private loans.