Ways to Get Student Loan Forgiveness

Ways to Get Student Loan Forgiveness

If you have student loan debt, you probably cringe every time the bill comes in the mail. If the bill has ever been a day or two late, you have probably wished that the loans suddenly disappeared and you no longer owed them, right?

Unfortunately, that will never happen. You will find that your loans are there to stay. Yep, you must pay them back and you are not left with many options.

Fortunately, there is some good news when it comes to student loans and making the debt disappear. So, what is it? Student loan forgiveness. Those three magical words can mean something wonderful for you, especially if you have a lot of student loan debt.

Now, not everyone will qualify for it, so it is important that you understand what it is, what programs are available, and how you can qualify. Let’s take a look.

Option 1: Teacher Cancellation – Federal Perkins Loan

If you currently have a Federal Perkins Loan, then you will be happy to know that it is possible to have up to 100 percent of your student loan debt completely forgiven. Before you jump for joy, let’s see what is takes to be eligible.

First and foremost, you must be a full-time teacher who works at a low income nonprofit or public elementary or secondary school. You may also qualify if you specialize in subjects such as special education, science, or even math.

To qualify, you must work as a full-time teacher for at least one full academic year. The benefits of this cancellation program include:

· 15% of the loans cancelled for the first and second years of service at an eligible school

· 20% of the loans cancelled for the third and fourth years of service at an eligible school

· 30% of the loans cancelled for the fifth year of service at an eligible school

This means that after five years of full-time teaching at an eligible school, you can have 100% of your student loan debt completely cancelled.

Option 2: Public Service Loan Forgiveness Program

The Public Service Loan Forgiveness Program or PSLF is a federal program that is available for those who have earned a degree in the public service field and work within it. This program allows a portion of the qualified applicant’s debt to be forgiven after that applicant has made 120 eligible payments.

To be eligible for this program, applicants will need to hold a full-time position in a local, federal, or state government agency or work in a 501(c)(3) organization. It is important to note that religious based work does not count towards the non-profit work qualification.

Applicants who apply for loan forgiveness under this program must have any of the following loans:

· Federal Direct PLUS Loan

· Federal Direct Unsubsidized or Subsidized Loan

· Federal Direct Consolidation Loan

There are requirements for this loan that must be met BEFORE the applicant is eligible to receive forgiveness. The requirements include:

· 120 on-time payments

· Work full-time at an approved and eligible organization

· Payments must be made under an approved and qualifying plan

Fortunately, there is no cap limit on the amount of debt that is forgiven, so it is possible to have 100% of your loans forgiven. You do need to make sure you understand that the amount forgiven is AFTER you have made the 120 payments.

Option 3: Income-Based Student Loan Forgiveness

This is not necessarily considered a program per say, but you can qualify to have your student loans erased if you qualify under the income-based repayment program.

The way this works is when you apply for the income-based program, your payments are only 10 or 15 percent of whatever your discretionary income is. After you have been on this plan and made payments for 20 to 25 years, the remainder of the loans will be forgiven.

Any applicant who has been approved to participate in the income-based repayment plan is eligible for this type of forgiveness. In addition, almost all loan types are eligible. In fact, the following types of loans qualify:


· Direct Loans

· Direct Consolidation Loans

· Direct PLUS Loans

· Federal Stafford Loans

· FFEL Consolidation Loans

Of course, there are requirements to qualify and you must have made consistent and on-time payments towards your loan for 20 to 25 years. This type of program is truly best for those students who have a lot of debt, but a low paying job.

Option 4: Teacher Loan Forgiveness

The Teacher Loan Forgiveness program is a wonderful program that helps to reward teachers for dedicating their lives to teaching the minds of young children.

To be eligible for this loan forgiveness program, teachers must work at one of the eligible low income schools.

The types of loans eligible for this program include:

· Federal Stafford Loans

· Direct Loans

There are requirements that you must meet to receive the forgiveness and those requirements include:

· Your loans must have originated AFTER October 1, 1998

· You must teach at a low income elementary or secondary school

· Your loans CANNOT be in default

· You must be in good standing as a teacher has have all certifications and licenses for your state

· You must work full-time and for five consecutive years

Teachers who meet the above requirements can receive up to $5,000 towards their student loans. Teachers who teach either special education, math, or science can receive up to $17,500 towards their student loan debt.

Final Thoughts on Student Loan Forgiveness Programs

There are many student loan forgiveness programs out there in addition to the four above. For example, there are programs for lawyers, pay as you earn repayment plans, nurses, and more. It is important to research your options and always pay attention to the eligibility requirements. If you do not meet these requirements, you will not have your student loans forgiven and you may have wasted more time and end up paying more in the long run.

Student loan forgiveness is a great way to have your loan paid off, but never simply rely on it as your only method to pay off your student loans, because all of the programs require you to make payments on the loans or not be in default.