How to qualify for student loan forgiveness programs

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For students willing to work in specific positions or jump through other hoops for several years, student loan forgiveness can represent a huge weight lifted — and lead to tens of thousands of dollars in savings. The key to making the most of student loan forgiveness is understanding how your program works and making sure you follow the directions to a T.

Here are some of the top forgiveness programs and what you should focus on to make them work in your favor.

What is student loan forgiveness?

When someone uses the term “student loan forgiveness,” they are usually referencing a conglomerate of programs for students that can ultimately lead to the forgiveness of all or part of their student loans. These programs all have their own unique requirements and approval standards, and some of them are even geared toward a very specific niche in the working world (i.e., teachers, military, etc.).

While not all forgiveness programs will work for every student, most students can find one program that could help them get at least some of their student loan debt wiped away.

What is the difference between student loan forgiveness and discharge?

If you’re granted student loan forgiveness, likely it was due to service in a particular occupation, like a job in the nonprofit sector or a qualified public service position. If you’re no longer required to make your payments due to other reasons, like a school closure or a total or permanent disability, this is likely a student loan discharge.

Student loan forgiveness programs

The following student loan forgiveness programs could help you get out of debt faster, but make sure you understand the rules before you apply.

Public Service Loan Forgiveness (PSLF)

Public Service Loan Forgiveness (PSLF) is geared toward graduates who are willing to work in a qualified public service position for a period of 10 years. This program requires full-time employment with a U.S. federal, state, local or tribal government or a not-for-profit organization, and you have to make 120 on-time payments on an income-driven repayment plan to qualify. You also need to have Direct Loans or a Direct Consolidation Loan before your monthly payments start to count.

If you can meet all the requirements for this program, you can have your remaining loan balance forgiven after 120 qualifying payments. Also note that forgiveness under PSLF is not considered taxable income.

Teacher Loan Forgiveness

Teacher Loan Forgiveness is offered to teachers who have “been employed as a full-time, highly qualified teacher for five complete and consecutive academic years” at a low-income school or educational service agency, according to the U.S. Department of Education. Further, at least one of those years must be after the 1997-98 academic year. The loans you’re seeking forgiveness for must have been made before the end of the five years you spent in qualifying teaching service.

If you’re able to qualify for this relief, you can receive up to $17,500 in loan forgiveness, depending on the subjects you taught. Mathematics, science and special education teachers can qualify for the highest level of forgiveness through this program.

Nurse Corps Loan Repayment Program

If you’re a licensed registered nurse, an advanced practice registered nurse or a nurse faculty member with qualifying nursing debt, you may be able to qualify for this program. Additional requirements include working full time in an eligible high-need nursing area and having attended an accredited school.

Upon qualification for this program, you can receive 60 percent of your “total outstanding, qualifying, nursing education loans over the course of two years.” Once you complete the first two years in this program, you can apply for a third year and another 25 percent in forgiveness for your original nursing school loans.

Income-Driven Repayment Plans

You can also apply for income-driven repayment plans that can lead to ultimate forgiveness of your remaining student loan balances. Specific plans that qualify include Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income-Contingent Repayment (ICR) and Income-Based Repayment (IBR). Each of these repayment plans requires you to pay a percentage of your “discretionary income” for 20 to 25 years before forgiving balances that remain.

To qualify for income-driven repayment plans, you must have eligible federal student loans. Note, however, that forgiven loan amounts after 20 to 25 years will be taxed as regular income, which could lead to a hefty tax bill.

Student loan forgiveness for military members

If you’re a member of the military or a veteran, there are plenty of ways to get the government to pay off some of your loans. One option is the National Defense Student Loan Discharge benefit, which can help a military member get some or all of their loans cancelled if they qualified for hostile-fire or imminent-danger pay. If their military service ended before Aug. 14, 2008, they can qualify for up to 50 percent forgiveness; if their military service ended on or after that date, they can qualify for up to 100 percent forgiveness.

Since this program is only available for Federal Perkins Loans and these loans are no longer available to new borrowers, this program should only be explored if you have old Perkins loans that you’re still trying to pay off.

If you’re a member of the National Guard, you may also be eligible for the Student Loan Repayment Program, which may grant you up to $50,000 in student loan forgiveness if you complete an eligible service contract.

Forgiveness programs for doctors

If you are a doctor, you may be able to receive some relief on your student loans if you can qualify for a loan forgiveness program. Most programs in this niche require you to work in a high-need area for a specific length of time, but the forgiveness amounts you can qualify for tend to be high. As an example, the National Health Service Corps Loan Repayment Program offers up to $50,000 in forgiveness in exchange for two years of work in an approved position.

Other loan forgiveness programs for doctors include the Indian Health Service Loan Repayment Program and the U.S. Department of Health and Human Services Health Resources and Services Administration Primary Care Loans program.

Also note that several branches of the military, including the U.S. Army, the U.S. Navy and the U.S. Air Force, have loan forgiveness programs for health professionals who serve in the military.

Loan forgiveness programs for lawyers

There are also quite a few forgiveness programs aimed at lawyers with student loan debt, although some of them are administered through specific law schools and geared toward their students. Numerous state-based loan repayment assistance programs also exist, so make sure to check which state options may be available to you.

On a national level, students can consider the Attorney Student Loan Repayment Program, which could help you see up to $6,000 of your loan balances wiped away each year, up to $60,000. The John R. Justice Student Loan Repayment Program is another option if you’re a public defender. This program lets attorneys in this position qualify for up to $4,000 per year in student loan assistance, with maximum forgiveness of $60,000.

Loan forgiveness programs for AmeriCorps

People serving full time in AmeriCorps are eligible for Public Service Loan Forgiveness. Additionally, the Segal AmeriCorps Education Award is granted to individuals who meet and complete the approved terms of national service in the AmeriCorps program. This award can be put toward your education costs at any approved postsecondary educational institution or GI Bill-approved programs. You can also use the funds from the award to repay any qualifying student loans. The amount is equal to the maximum amount of a Pell Grant and can change based on the year.

Individuals who have completed their service in an approved AmeriCorps program can also be eligible to have up to 100 percent of interest payments that accrued during their time of service paid for by the Office of the National Service Trust (also known as the Trust). This is only possible if you have successfully completed your term of service and have earned the Segal AmeriCorps Education award.

Student loan discharge programs

There are a few instances where your student loans could be completely discharged. Here are some examples and what you should know about discharge eligibility programs.

Perkins Loan cancellation

Under certain circumstances or if you are in a specific occupation, your Perkins Loan could be cancelled. Here are a few situations or conditions that could qualify you for a Perkins Loan cancellation:

  • You’re a special education teacher or teacher in a field of expertise that has a shortage of qualified teachers in your state.
  • You’re a teacher in a school that serves students from low-income families.
  • You’re a volunteer or you hold another eligible job under the Perkins Loan cancellation program. These jobs include firefighters, law enforcement officers, public defenders, speech pathologists and more.

The application for the cancellation can be made to your school’s Perkins Loan servicer. Your school or servicer can walk you through the application process and guide you through the specific documentation necessary. If you qualify, you may be able to cancel up to 100 percent of your Perkins Loan.

Closed school discharge

If you currently have a Direct Loan, a FFEL Program Loan or a Federal Perkins Loan, you may be eligible for 100 percent discharge of your federal student loans if:

  • Your college closed within 120 days of your withdrawal.
  • Your school closed while you were enrolled.
  • You were on an approved leave of absence when your college closed.

Contact your loan servicer if any of these apply to your situation. Your servicer can provide you with information about the application process for getting your loans discharged and what you can do if your application gets approved or denied.

Borrower defense to repayment charge

If your school misled you, engaged in misconduct or violated certain state laws, you may be eligible for federal student loan forgiveness.

If you are eligible, you may be able to have all or part of your federal Direct Loans forgiven, or you could be reimbursed for the money you’ve already put down on your loans. In order to apply for borrower defense, you can apply through the online application on the Federal Student Aid website. You may need to submit extra electronic documentation during the application process, so make sure you review the documentation required before applying.

Total and permanent disability discharge

If you’re totally and permanently disabled, you may be able to qualify for federal student loan relief and release from TEACH grant obligations on the basis of your disability. If you think you’ll qualify, you need to complete and submit a TPD discharge application, along with any required documentation, and send it to Nelnet — the disability discharge servicer. When you apply, you’ll likely need to provide documentation from one of the following showing that you qualify:

  1. A physician.
  2. The Social Security Administration.
  3. The U.S. Department of Veterans Affairs.

For more information on how to contact Nelnet and to apply for a TPD discharge, you can visit the Federal Student Aid’s TPD information resource center.

Discharge due to death

Your federal student loans will be fully discharged due to the death of the borrower after proof of death is submitted. If you have a PLUS loan taken out on your behalf, that can also be discharged with the acceptable documentation.

If you’re planning on applying for a student loan discharge due to death, typically you’ll need to provide a death certificate or a certified copy of the certificate. Contact your loan servicer for the documentation and submission requirements.

How to get student loan forgiveness

If you’re wondering how to get rid of student loans, programs that offer forgiveness could be the answer you’re looking for. However, you shouldn’t run toward forgiveness without arming yourself with information.

While the rules vary, qualifying for student loan forgiveness typically requires you to:

  • Have a specific type of student loan, keeping in mind that most forgiveness plans are only applicable to federal student loan debt.
  • Work in a specific job, a high-need field or a low-income area.
  • Agree to work for a specific length of time.
  • Make on-time payments on your student loans while you work toward forgiveness.

To qualify for loan forgiveness with your chosen plan, make sure you understand the ins and outs of your plan and what it takes to qualify. Read all the fine print and reach out to the administrator of your student loan debt relief plan if you have any questions along the way.

Things to consider when applying for student loan forgiveness

Student loan forgiveness programs can help you save money on your student loans in the long run, but there are plenty of pitfalls to watch out for. Here are some factors to consider before you pursue one of these programs.

  • Loan forgiveness could be considered a taxable event. Some loan forgiveness programs, including income-driven plans, will leave you with a tax bill after the program is complete, since forgiven loan amounts are considered taxable income. This doesn’t mean a program isn’t worth pursuing, but you should know the tax status of your forgiveness program so you can plan accordingly.
  • Scams are out there. Nearly every industry has its share of scammers, and the student loan industry is no exception. Watch out for “debt relief companies” that promise to make your loans disappear. They cannot, but they will charge you money anyway.
  • Forgiveness typically doesn’t apply to private student loans. Note that most forgiveness programs are for student loans backed by the federal government. If you have mostly private student loans, forgiveness programs may be harder to find.
  • Some forgiveness programs take a decade or longer. Also consider whether participating in a forgiveness program is worth it when you need to spend 10 to 25 years in some cases to achieve forgiveness. If you are earning a good income, you might be better off paying off your loans as quickly as possible so you don’t have monthly payments hanging over you.
  • Student loan forgiveness isn’t an option if you have already defaulted on your loans. Once you default on your loans, you lose all federal protections and benefits.

What to do if you don’t qualify for student loan debt forgiveness programs

If you have private student loans or your career doesn’t make it possible to qualify for a traditional loan forgiveness program, then you’ll need to pursue other options. Consider these strategies to pay off your student loans once and for all.

Switch up your repayment plan

If you don’t qualify for forgiveness on federal student loans but you need a lower monthly payment, see if you can play around with your repayment plan. Federal loans offer plans that let you repay your balance for up to 30 years, which could significantly lower your monthly bill.

Refinance your student loans

Refinancing your student loans can be a smart idea if you have good or excellent credit or a co-signer lined up. Private lenders can offer lower interest rates than federal loans do, and you can choose a repayment plan that works for your needs and your budget.

Pay more than the minimum

If you want to ditch your loans as fast as you can, also consider paying more than the minimum payment each month. You’ll need to notify your loan servicer and specify that you want your overpayment to go toward the principal of your loan balances (and not toward your next payment), but you’ll save money over time as you slowly knock down your loan amount and pay less and less toward interest each month.

Next steps to consider

If you qualify for student loan forgiveness or discharge, conducting the proper research and making sure you have the approved documentation on hand can help you get the forgiveness you need. The application process can vary based on the situation, so contact your loan servicer if you have any questions throughout the process.

If you’re still seeking forgiveness but don’t qualify for the programs, refinancing your student loans can be a way to save money through lowering your interest rate and condensing multiple loans into a single monthly payment.

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