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- You can't get forgiveness with private student loans, unlike with federal ones.
- Certain federal student loan holders are eligible for forgiveness, such as nurses and teachers who meet specific requirements.
- Income-driven repayment plans offer forgiveness for a remaining balance after the payment term is up.
While there are many student loan forgiveness scams out there, often purporting to be part of a federal program that doesn't exist, there are also a few legitimate avenues for getting your debt canceled.
Understanding loan forgiveness options
Public Service Loan Forgiveness (PSLF)
Public Service Loan Forgiveness is a loan forgiveness program meant for those working in certain government or not-for-profit organizations. PSLF will be applied to the remaining balance that eligible borrowers have on their Direct Loans. Eligibility kicks in if you're working full-time for an eligible employer, and after the equivalent of 120 qualifying monthly payments have been made.
Teacher Loan Forgiveness (TLF)
The Teacher Loan Forgiveness program is designed for educators who don't have an outstanding balance on Direct Loans or Federal Family Education Loan Program (FFELP) loans, have been employed full-time for five consecutive academic years, have been employed at an elementary or secondary school, or educational agency serving low-income students, and lastly, the loans you're seeking forgiveness for must be from your minimum of five years of teaching.
Income-Driven Repayment (IDR) Forgiveness
An IDR plan restructures and bases your monthly student loan payment on your income and the size of your family, with the goal of setting up lower monthly payments. Under an IDR plan, at the end of your repayment term, any remaining balance will be forgiven.
Nurse Corps Loan Repayment Program
The Nurse Corps Loan Repayment Program (NCLRP) forgives educational debt for registered nurses, advanced practice registered nurses, and nurse faculty members.
Those who receive an award must have worked for at least two years in a critical shortage facility, or an eligible nursing school as a faculty member.
Perkins Loan cancellation and discharge
If you're an educator with a Federal Perkins Loan,it's possible to get 100% of your loan canceled incrementally. The following jobs are eligible for loan cancellation, under certain conditions:
- Elementary or secondary school teachers
- Special education teachers
- Preschool or Pre-K teachers
- Other educators
- Law enforcement
- First responders
- Attorneys
- Nonprofit workers
- Those in the Military
- Health care workers
- Those who work with people with disabilities.
You may be eligible to get your Perkins Loan discharged if you've gone through any of the following life events:
- Certain types of bankruptcy
- School closure before you completing your program of study
- Death
- Total and permanent disability
How to qualify for student loan forgiveness
Understand the specific requirements of each program
Every loan forgiveness program is different, and set up for different borrowers in different situations. Compare your options to identify your strongest chance for loan forgiveness.
Verify your loan eligibility
Even if you are in an eligible role for any of these forgiveness program, that doesn't mean the type of loan you have is eligible for loan forgiveness.
Stay on top of your payments
For certain programs, such as IDR and PSLF, you are only eligible for loan forgiveness if you're up to date on your payments and your account is in good standing. That means not falling into student loan default, which happens when you haven't made payments for 90 days on private loans and 270 on federal loans.
Keep accurate records
To prepare your application and any questions the lenders may have, be sure to have all important documents on hand. That includes your employment verification, social security information, and other personal credentials. It also means keeping a record of your paystubs, payment history, and other relevant documents.
FAQs
Can all student loans be forgiven?
No, not all student loans are eligible for all programs. Be sure to check program details carefully.
Is there a limit on how much student loan debt can be forgiven?
The limit on how much student loan debt can be forgiven is entirely dependent on the program. PSLF, for example, may forgive the entire remaining balance.
Do I have to pay taxes on forgiven student loans?
Generally speaking, you have to pay taxes on forgiven student loans. Consult a tax advisor for specific details.
Can private student loans be forgiven?
Private student loans are rarely forgiven, unless otherwise handled through specific employer programs. Most forgiveness is for federal loans.
Loans Reporter
Ryan Wangman was a reporter at Personal Finance Insider reporting on personal loans, student loans, student loan refinancing, debt consolidation, auto loans, RV loans, and boat loans. He is also a Certified Educator in Personal Finance (CEPF).In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership. He graduated from Northwestern University and has previously written for The Boston Globe.
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