Although forgiveness can offer significant financial relief, navigating the various programs and their specific requirements can be tricky. To successfully earn forgiveness, you’ll need to learn the programs available, their eligibility criteria, and how to apply for student loan forgiveness.
Are you eligible for student loan forgiveness?
The Department of Education offers a few standout student loan forgiveness programs. Each program has its own eligibility requirements and application process to have your student debt canceled. If you have federal student loans, you may qualify for:
- Public Service Loan Forgiveness: Borrowers with qualifying Direct Loans can earn loan forgiveness by making 120 payments while employed full-time with a government entity or nonprofit organization. For your payments to count, you must also be enrolled in an income-driven repayment plan. After successfully fulfilling PSLF requirements, borrowers can apply for forgiveness on their remaining loan balance, tax-free.
- Income-driven repayment (IDR) plans: If your employment doesn’t qualify for PSLF, you might still have access to loan forgiveness through an IDR plan. Depending on your IDR plan, your monthly payment is capped to between 10% and 20% of your discretionary income, with a 20- or 25-year term. At the end of your repayment, any remaining eligible loan balance is forgiven. However, unlike PSLF, the IRS might consider the forgiven amount as taxable income, so prepare for this possibility.
- Teacher Loan Forgiveness: Teachers who don’t qualify for PSLF or whose situation isn’t a fit for IDR forgiveness have another option. The federal Teacher Loan Forgiveness program offers up to $17,500 in loan forgiveness to highly qualified teachers who work full-time for five years at a low-income school. “Highly qualified teachers” are those who’ve earned a bachelor’s degree, have full teaching certification in their state, and haven’t had any licensure requirements waived on an emergency or temporary basis.
| Note: You might be eligible for student loan assistance via other avenues. For example, doctors, nurses, dentists, teachers, lawyers, or military members may qualify for additional student loan help. Check out the full list of student loan forgiveness programs to see which you might qualify for. |
How to apply for forgiveness
Understanding how to apply for student loan forgiveness depends on the program you’re pursuing. For some programs, forgiveness is automatic after you’ve met certain requirements, while others involve additional steps.
If you need help understanding your loan forgiveness options, or your current progress toward loan forgiveness, contact your student loan servicer to learn more.
PSLF
Since it takes 120 qualifying payments — while meeting employer requirements — to be eligible for loan forgiveness, it will take a minimum of 10 years before you submit an application. However, you can submit a PSLF certification form annually (or whenever you change jobs) to ensure that your employment qualifies. This will also reduce the paperwork you’ll need to complete when you do submit a final forgiveness application.
Once you’ve met the necessary criteria, you can complete the PSLF form electronically in about 30 minutes using the PSLF help tool on StudentAid.gov. The tool also lets you request your employer’s signature digitally as part of the employer certification process.
You can also manually fill out and submit a printed PSLF form. Make sure your paper application also includes your signature, as well as your employer’s.
MOHELA, which is the current loan servicer for the PSLF program, will then review your application to determine your forgiveness eligibility.
IDR plans
To get your remaining loan balance forgiven under IDR, you must have completed 20 or 25 years of qualifying payments under an income-driven repayment plan:
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE), soon to be called Saving on a Valuable Education (SAVE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
Throughout your repayment period, you’ll need to recertify your income and family size annually. This can be done by logging into your StudentAid.gov account and submitting an income-driven repayment plan request. Under the reason for the request, select “I am submitting documentation for the annual recertification of my income-driven payment.”
Your federal loan servicer will track your progress toward forgiveness. After successfully making 20 or 25 years worth of qualifying payments, your servicer will notify you if your balance is eligible for loan forgiveness.
Teacher Loan Forgiveness
Highly qualified teachers who’ve completed their five-year, full-time employment at a low-income school can submit a Teacher Loan Forgiveness Application. You can print out the form at StudentAid.gov.
Complete all sections of the form, including the subject you taught, past loan forgiveness that you applied for or received, and your signature certifying that all of the information you’ve provided is true. You’ll also need to have the chief administrative officer of the school or agency you’re employed with complete and sign section five of the form.
Send the completed application to your loan servicer for review. If you have eligible loans across different servicers, you’ll need to submit individual forms to each servicer.
Other programs
You may receive student loan forgiveness or repayment assistance through various state or employer programs. If so, review the terms of the program carefully and make sure you meet all requirements. Follow the program’s instructions to apply for forgiveness. If you need additional help, reach out to the program’s administrator.
What about President Biden’s student loan forgiveness plan?
The Biden-Harris administration’s student loan forgiveness plan, which would have offered up to $20,000 in student loan cancellation, was struck down by the Supreme Court in June 2023. New and existing applications for the relief effort are permanently suspended.
Soon after the Supreme Court’s decision, the Biden administration began pursuing its forgiveness plan through other avenues. However, the timeline and outcome of this strategy are uncertain, and it is not currently open for applications.
The Department of Education also recently announced IDR plan changes, including the new SAVE plan. The new plan is designed to make loan payments more affordable and widen access to forgiveness. Some of the changes go into effect as early as summer 2023. The second phase, which includes a new loan forgiveness provision, is scheduled for July 2024.
With so many pieces in play and various efforts in the pipeline, stay informed by subscribing to the Department of Education’s Federal Student Loan Borrower Updates email list. You can also review the Federal Student Aid announcements page for more information.
FAQ
How long does student loan forgiveness take?
Depending on the loan forgiveness plan you’re participating in, it can take anywhere from 10, 20, or 25 years to qualify for federal student loan forgiveness.
How will I receive student loan forgiveness?
If your situation qualifies for loan forgiveness, the remaining principal balance and unpaid interest on your eligible loans will be discharged. You can confirm your forgiven balance by logging into your StudentAid.gov account, or by reaching out to your loan servicer.
How is student loan forgiveness taxed?
The way forgiven debt is taxed depends on the loan forgiveness program you’ve completed. Generally, forgiven balances through PSLF are not considered taxable income, while IDR forgiveness might incur a tax liability.
However, the American Rescue Plan Act temporarily modified how forgiven loans are treated. Any student loans that are forgiven before the end of 2025 won’t count as taxable income.
When can you start applying for student loan forgiveness?
You can apply for student loan forgiveness as soon as you’ve fulfilled all of the requirements of the program. This includes making the sufficient number of qualifying payments, if applicable.
However, pay attention to the program’s fine print. You may need to certify your eligibility annually or complete other paperwork to remain enrolled.
Do I automatically get student loan forgiveness?
Sometimes. Borrowers who are participating in Public Service Loan Forgiveness and have met the program’s requirements must submit a PSLF form to request forgiveness. Forgiveness under IDR programs, on the other hand, is automatically applied once you’ve completed the repayment requirements.
What if I’m not eligible for student loan forgiveness?
Forgiveness programs generally have strict requirements, and many borrowers won’t qualify. However, there are alternatives to student loan forgiveness that could help. For example, you could alter your repayment program to make your debt more affordable. Or, you might consider refinancing your student loans if you can secure a lower interest rate or other perks.
Note that refinancing federal student loans means that you’ll lose access to all federal protections, including income-driven repayment and more flexible deferment and forbearance.