Who Qualifies for Student Loan Forgiveness?
Let’s explore who qualifies to have their student loan debt reduced or eliminated through various student loan forgiveness programs, including Public Service Loan Forgiveness (PSLF).1
In the context of student loans, three terms are used to refer to the ending of a borrower’s obligation to repay their debt: discharge, cancellation, and forgiveness. While each term means all or a portion of a borrower’s debt will be reduced or eliminated, they have important distinctions:
- Student loan discharge:
Student loan discharge is typically used when a borrower is unable to repay the debt for reasons such as disability or bankruptcy; or the borrower is no longer responsible for the debt because of fraud. - Student loan cancellation:
Student loan cancellation is often used interchangeably with forgiveness and is typically based on a borrower’s job and/or income. More recently, cancellation was frequently used in reference to former President Biden’s proposed federal student loan debt plan to distinguish it from existing federal student loan forgiveness programs. - Student loan forgiveness:
Student loan forgiveness is typically used when a borrower is working in a particular occupation for a defined time period. Forgiveness is typically attached to federal student loans in particular and is part of federal programs such as Income-Driven Repayment (IDR), Public Service Loan Forgiveness (PSLF), and Teacher Loan Forgiveness.
With a focus on federal student loan forgiveness, including PSLF, let’s explore who qualifies to have their student loan debt reduced or eliminated in this way.
Determine your eligibility
To understand if you’re eligible for federal student loan forgiveness programs, you will need to understand what types of federal student loans you have, if your employment situation qualifies, your household income, and what the requirements of the different forgiveness programs are.
Federal student loans
Depending on what type of federal student loans you have and what type of forgiveness path you’re pursuing, you may need to consolidate your federal student loans. To learn more about which federal student loan types are eligible for Income-Driven Repayment (IDR), visit our Guide to Federal Student Loan Repayment Programs.
In the case of PSLF, only non-defaulted loans received under the William D. Ford Federal Direct Loan (Direct Loan) Program are eligible for forgiveness. Learn more about PSLF eligibility by visiting the Student Aid website.
Under the Teacher Loan Forgiveness Program, Direct Loans or FFEL Program loans are eligible for forgiveness. Learn more here.
What is Public Service Loan Forgiveness (PSLF)?
PSLF is a U.S. government program that allows borrowers employed at qualifying nonprofits and government organizations to have their Federal Direct Loans forgiven after 10 years of repayment under an Income-Driven Repayment (IDR) plan. To be eligible for PSLF, you must:
- Be employed by a qualifying nonprofit OR a U.S. government organization at any level (federal, state, local, or tribal) – including U.S. military service.
- Work full-time for that agency or organization
- Have Federal Direct Loans (or consolidate other federal student loans into a Direct Loan)
- Be enrolled in a qualifying repayment plan (typically, an IDR plan)
- Make 120 qualifying payments
PSLF is a notoriously complicated program with frequently changing rules and requirements. You can learn more about the program at studentaid.gov/publicservice or see our guide to PSLF.
Who qualifies for PSLF?
Public sector professionals — such as doctors, nurses, first responders, and teachers — employed by qualifying nonprofit organizations and government entities are eligible for PSLF. Learn more about jobs that qualify for PSLF.
Payments
To be eligible for forgiveness through the 10-year PSLF program, you must make 120 qualifying payments. Typically, borrowers pursuing PSLF are enrolled in an IDR plan.
Application
Understanding the rules, preparing paperwork, and applying for PSLF can be difficult to navigate on your own. Recertifying your employment each year and making sure you meet all PSLF program requirements over the course of 10 years can be daunting as well. Schedule a free, 30-minute forgiveness consultation with one of our student loan specialists who can help answer your questions.
Forgiveness through IDR
To apply for student loan forgiveness through IDR, first review your eligibility for the different types of plans and get a sense of which plan could be right for you using Student Aid’s Loan Simulator tool. Do you meet all the requirements and have all the documentation you need? If you have parent PLUS loans, you must consolidate them to become eligible for IDR. If you’re unsure or have questions, schedule a free call with a student loan specialist for help.
IDR applications
To apply to the federal IDR program, you will need to sign in to your account on studentaid.gov. For a preview of the application questions, you can view a demo here. Before you start your application, make sure you have the right documentation on hand to help you complete the application efficiently and accurately.
Gather materials
When applying to IDR, you will typically need to have the following documentation readily available:
- A verified FSA ID
- Your financial information
- Your personal information
- Your spouse’s information (if applicable)
Complete the application
The application for IDR must be completed in a single session, but the good news is that most people complete the application in 10 minutes or less, according to studentaid.gov/idr. Generally, IDR application processing should take less than two weeks. However, it’s also not uncommon for applications to sit under review for months.
Next steps
If you think you could qualify for federal student loan forgiveness, contact your loan servicer and get an understanding of what types of federal student loans you have and whether or not you need to consolidate.
Forgiveness terms to know
Student loan discharge: Term used when a borrower is no longer responsible for repaying their debt for reasons such as disability, bankruptcy, or fraud.
Student loan cancellation: Often used interchangeably with forgiveness, this term is used in reference to former President Biden’s proposed federal student loan debt plan to distinguish it from existing federal student loan forgiveness programs
Student loan forgiveness: Term typically used when a borrower is working in a particular occupation for a defined time period.
IDR: Refers to the federal Income-Driven Repayment Program, comprised of multiple plans.
IBR: Income-Based Repayment, one of the IDR plans.
PAYE: Pay As You Earn, one of the IDR plans.
ICR: Income-Contingent Repayment, one of the IDR plans.
PSLF: Public Service Loan Forgiveness, a 10-year federal student loan repayment program available to government and qualifying nonprofit employees.