10+ Student Loan Forgiveness Programs That Discharge Loans

Dated: March 11 2021

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10+ Student Loan Forgiveness Programs That Discharge Loans

Federal student loan borrowers could be eligible for forgiveness under multiple circumstances.

Anna HelhoskiMarch 11, 2021
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Student Loan Relief Guide

COVID-19 relief may affect information on this page. Know your options before making any decision.

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Student loan forgiveness might seem too good to be true, but there are legitimate ways to get it through free government programs.

The following options are available only to borrowers with federal student loans. Some programs have very specific requirements that make them difficult to qualify for, but income-driven repayment plans are open to most borrowers.

The information below is about existing student loan forgiveness programs. Learn more about the potential for Biden Student Loan Forgiveness.

You’re not eligible for federal student loan forgiveness programs if you have private loans, but there are other strategies for managing private loan debt.

Student loan forgiveness programs

  1. Income-driven repayment forgiveness. The federal government offers four main income-driven repayment plans, which allow you to cap your loan payments at a percentage of your monthly income. When enrolled in one of these plans, your remaining loan balance will be eligible for forgiveness after 20 or 25 years, depending on the plan. These plans are most beneficial for those with large loan balances relative to their income. Only 32 borrowers have received loan forgiveness through income-driven repayment forgiveness, according to the National Consumer Law Center. This forgiveness was made tax free retroactive to Dec. 2020 through the end of 2025, as part of the March 2021 American Rescue Plan. However, most borrowers will not qualify for forgiveness through income-driven repayment until the early 2030s.

  2. Public Service Loan Forgiveness. Public Service Loan Forgiveness is available to government and qualifying nonprofit employees with federal student loans. Eligible borrowers can have their remaining loan balance forgiven tax-free after making 120 qualifying loan payments. In order to benefit from PSLF, you’ll need to make payments while enrolled in an income-driven repayment plan. Otherwise, on a standard repayment plan, the loan would be paid off before you’re eligible to benefit from forgiveness. Only 2% of borrowers have been approved for PSLF as of Nov. 2020.

  3. Teacher Loan Forgiveness. Teachers employed full time in low-income public elementary or secondary schools may be eligible for Teacher Loan Forgiveness after working for five consecutive years. They can have up to $17,500 in federal direct or Stafford loans forgiven. To qualify, teachers must have taken out loans after Oct. 1, 1998.

  4. Student loan forgiveness for nurses. Nurses shouldering student debt have several options for student loan forgiveness: Public Service Loan Forgiveness, Perkins loan cancellation, and the NURSE Corps Loan Repayment Program, which pays up to 85% of qualified nurses’ unpaid college debt. Public Service Loan Forgiveness may be the most likely option for most nurses — few borrowers have Perkins loans, and the NURSE Corps program is highly competitive.

  5. Obama student loan forgiveness. There’s no such thing as "Obama student loan forgiveness." However, some student "debt relief" companies use it as a catch-all term for free federal programs — which they charge to enroll borrowers in. If you encounter a company offering "Obama student loan forgiveness," consider it a red flag. Enrolling in federal programs like income-based repayment and federal student loan consolidation is free to do on your own through the Department of Education.

Other student loan forgiveness programs

There are a few additional niche student loan forgiveness or payment assistance programs you may qualify for through federal or state programs. Eligibility in these programs depends on your profession and where you work.

  1. State-sponsored repayment assistance programs. Licensed teachers, nurses, doctors and lawyers in certain states may be able to take advantage of programs to assist with repaying debt. For example, the Mississippi Teacher Loan Repayment Program will pay up to $3,000 per year... READ MORE HERE AT NERD WALLET!

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Nicole Gates

As a wife, mother of 5, retired military spouse, Yuba/Sutter native, and a seasoned real estate professional, Nicole recognizes and values the trust her clients place in her. She strives every day to ....

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