Financial wellness

Student loan forgiveness programs: who qualifies and how to apply

Student loans can seem to loom over your finances for years. But you might be able to apply for student loan forgiveness.  

Read on to find out about top programs—and which ones you might qualify for. 

What is student loan forgiveness? 

Student loan forgiveness can sound too good to be true. But it’s a real prospect that the U.S. government offers. 

When you receive student loan forgiveness, the government reduces or cancels your student debt. It only applies to federal loans. Private loans do not qualify. 

You have to apply for forgiveness. You also have to follow specific rules, which differ from program to program.  

What are some student loan forgiveness programs? 

You can trust government forgiveness programs. They offer a wide range of free and reliable options. The Department of Education website lists all of their requirements. 

These programs include forgiveness for: 

  • Various incomes. Some programs offer forgiveness based on your income. They cap loan payments at a percentage of how much money you make. You must make payments for 20-25 years, depending on the plan. If you have a small income and a large loan, this option may work for you. 
  • Public service. You can get debt relief for working for the government or a nonprofit. The government forgives your loan balance after you make 120 loan payments. You’ll need to enroll in an income-driven program at first for those payments to count. You may be able to find other national programs. Healthcare groups and legal foundations sometimes offer loan repayment assistance programs (LRAPs). 
  • Teachers. If you’re a full-time teacher at a low-income public elementary or secondary school, you may be able to apply for Teacher Loan Forgiveness. You need to have worked for five years. They will forgive $17,500 in loans.  
  • Nurses. You have a few options as a nurse. Public Service Loan Forgiveness applies to you. Perkins loan cancellation, which we’ll discuss later, applies to you. Finally, the NURSE Corps Loan Repayment Program will pay 85% of your debt. 
  • Various jobs. In some states, you can get preferred help as a licensed teacher, nurse, doctor, or lawyer. Search for one of these niche programs on your state’s department of higher education website.  
  • Military service. The military offers debt relief to some of its members. You might have access to a particular program if you work for any of its branches.  

Who qualifies for student loan forgiveness programs? 

The government offers a lot of forgiveness programs. So how can you tell whether you qualify for them or not?  

Each program has specific conditions. Some apply to teachers only. Others pertain to nurses. Some are only for military personnel. Others are open to people of any profession.  

However, one thing remains the same for all programs. You must have federal loans. Private loans are not eligible.  

Are there downsides to student loan forgiveness? 

There are no significant downsides to legitimate student loan forgiveness. 

Though, you might want to think about the following: 

  • Taxes. Your cancelled student debt might be taxed as income. There are exceptions. For example, if you have to work in a certain job to get forgiveness, you are often exempt.  
  • Defaulted loans. The government won’t forgive your defaulted loans. You will have to get those loans into good standing first. Then, they might be eligible for forgiveness. Defaulted loans are eligible for discharge programs under specific conditions described below. 
  • Scams. Trust only programs run by the government or nationwide nonprofits. It should be free to apply. Do not trust debt relief companies that charge high upfront fees.  

How can you apply for student loan forgiveness programs? 

Applying for forgiveness can take time. However, it’s often worth the process.  

To apply, you’ll want to: 

1. Identify a potential program

Review all of your program options. Find one (or more) that apply to you.  

2. Contact your loan servicer

When you got your loan, you connected with a company on the government’s behalf. This company manages your loan-related billing. They will let you know what forms and data they need from you. After a review, they will tell you whether you qualify.  

3. Keep paying your loans while you wait for a response

Depending on the program you are applying for, you may still be responsible for your loans as you wait for a verdict. Don’t stop paying while you wait.  

Are there options other than student loan forgiveness?  

Forgiveness isn’t your only option. The government offers cancellations and discharges, too. A cancellation means that you don’t have to pay back loans due to your job. A discharge means you don’t have to pay back loans due to other conditions. 

You might be able to get a: 

  • Perkins loan cancellation. Those with federal Perkins loans can have 100% of their loans canceled. You must work in a public service job for five years to qualify.  
  • Closed school discharge. Sometimes schools close. The government will discharge your loans if your school closes. This case applies if it closes while you are enrolled or soon after you withdraw.  
  • Borrower defense to repayment discharge. If your school engaged in fraud, you may be able to secure a discharge. The fraud must be documented and well-known.  
  • Total and permanent disability discharge. Disability can stop you from working. In this case, the government might discharge your debt.  
  • Total and permanent disability discharge for veterans. The military discharges debt for disabled veterans who can’t work. They process this as a matter of course. You do not need to apply.  

Can you get student loan forgiveness?   

The government runs many student loan forgiveness programs. You might qualify for one of them if you took out a federal loan for school. Do your research and contact your loan servicer. Then, you’ll be on the path to student debt relief.  

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