Student Loan Forgiveness Programs: What You Need to Know

Student Loan Forgiveness Programs: What You Need to Know

As of 2021, more than 44 million Americans collectively owe $1.5 trillion in student loan debt. This massive amount of debt has caught the attention of lawmakers who have proposed various student loan forgiveness programs to alleviate the burden on borrowers. In this article, we’ll take a closer look at some of the most popular student loan forgiveness programs currently available.

The Public Service Loan Forgiveness Program (PSLF)

The PSLF is a federal program that forgives the remaining balance on a borrower’s Direct Loans after they have made 120 qualifying payments while working full-time for a qualifying employer. Qualifying employers include government organizations, non-profit organizations, and certain types of private non-profit organizations. The program is not available for borrowers with Federal Family Education Loans or Perkins Loans.

One of the benefits of the PSLF is that the forgiven amount is tax-free. To enroll in the program, borrowers must submit an Employment Certification Form to qualify for the program and submit an application once they have made 120 qualifying payments.

Teacher Loan Forgiveness Program

The Teacher Loan Forgiveness Program is another federal program that forgives up to $17,500 on Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Stafford Loans for teachers who work in low-income schools and educational service agencies. To be eligible, borrowers must work as a full-time teacher for five consecutive years in a qualifying school or educational service agency.

The amount of loan forgiveness depends on the subject area taught and the level of the education qualifications. For example, a teacher who specializes in mathematics, science, or special education may be eligible for up to $17,500 of forgiveness.

Income-Driven Repayment Plans

Income-driven repayment plans can also lead to loan forgiveness after 20-25 years of repayment. Borrowers who enroll in one of these plans have their monthly student loan payments capped at a percentage of their discretionary income. The percentage varies depending on the type of plan enrolled in.

The four types of income-driven repayment plans are:

  • Income-Based Repayment (IBR)
  • Pay As You Earn (PAYE)
  • Revised Pay As You Earn (REPAYE)
  • Income-Contingent Repayment (ICR)

After 20-25 years of on-time payments, the remaining balance on the student loans is forgiven. However, the forgiven amount is taxable as income.

The National Health Service Corps (NHSC) Loan Repayment Program

The National Health Service Corps Loan Repayment Program is a federal program that helps healthcare providers with student loan debt pay off their loans in exchange for working in underserved areas. Borrowers who work full-time for at least two years can receive up to $50,000 in loan repayment. After completing the initial two-year commitment, borrowers can apply to extend their contract for more repayment assistance.

State-Run Programs

Several states have their own student loan forgiveness programs. These programs often have specific eligibility requirements and loan forgiveness amounts vary. Some of the most popular state-run programs include:

  • New York State Get on Your Feet Loan Forgiveness Program
  • California Student Loan Forgiveness for Teachers Program
  • Texas Student Loan Repayment Assistance Program

It’s important to research the eligibility requirements and benefits of each state-run program thoroughly before applying.


Student loan debt can be a daunting burden for many Americans, but there are options available to alleviate it through student loan forgiveness programs. Whether you work for a qualifying employer, are a teacher, a healthcare provider or have an income-driven repayment plan, there are options available to help you manage your debt.

It’s essential to familiarize yourself with the eligibility requirements and benefits of each program before applying. Ultimately, choosing the option that best suits your financial situation and career goals will help you take control of your student loan debt and achieve financial freedom.

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