What is Student Loan Forgiveness?

Student loan forgiveness liberates individuals from the responsibility to pay back a portion or the whole fee of their federal student loan debt. These individuals secure these loans to finance their higher education. This loan applies to specific loan categories, but qualification is restricted to individuals in public service, educational, or military occupations.

What is Student Loan Forgiveness?

However, loan forgiveness is only applicable for federal direct loans, which simply means private loans are excluded. Also, federal loans might be released in situations beyond the borrower’s control. For those who believe their educational institution deceived them, seeking loan forgiveness falls under the borrower defense category.

How Does it Work?

Loan forgiveness is commonly referred to as a portion of a debt that is terminated or pardoned, releasing the borrower from the duty to backpay the debt. Typically, as it can be forgiven, it can also relate to loans issued or backed by the U.S. government.

However, the forgiveness program does not extend to privately issued loans, such as those from business banks or lenders. Loan forgiveness can also be an alternative for individuals who are qualified to secure loans.

Applicants must undergo an application process and may still be required to make payments until approval is granted. The high-profile collapses of various for-profit colleges, coupled with the economic challenges of the 2020 pandemic, have heightened existing concerns about student debt.

Additionally, an extensive loan forgiveness program, including all individuals, not just those involved in public service, repayment plans, or college fraud, has grown into a political argument.

Types of Student Loan Forgiveness

Student loan forgiveness only applies to direct loans authorized by the federal government. Loans from non-federal sources, including those provided by private lenders and loan companies, are excluded.

Furthermore, individuals working with a federal agency may receive partial annual repayment of their loans up to $10,000, with a maximum cumulative amount of $60,000. These loans are provided through the federal student loan repayment program.

Public Service Loan Forgiveness

Public service loan forgiveness is accessible through the U.S. Department of Education, which caters to federal direct loan borrowers. Individuals can be eligible if they possess the Federal Family Education Loan (FFEL) program loan or Perkins loans that are consolidated into a Direct Consolidation Loan.

Additionally, individuals working for qualified employers can get the remaining balance of their federal student loan pardon once they complete 120 monthly payment qualifications. It’s important to note that PSLF is specific to the employer, not role-based.

Therefore, you don’t have to be employed as a police officer, firefighter, teacher, or in a similar capacity to be eligible. Also, you can get federal student aid if you decide to operate with an eligible employer.

Teacher Loan Forgiveness Program

The Teacher Loan Forgiveness (TLF) Program provides an opportunity for teachers with Direct or FFEL program loans to receive up to $17,500 in student loan forgiveness. To qualify, teachers must teach full-time for five consecutive years at a school or organization deemed eligible as a requirement.

Additionally, qualified institutions include elementary and secondary schools as well as educational service organizations.

Health Professional Loan Repayment

If you have considered working in a standard role, you might be eligible for student loan assistance from organizations. These organizations include the National Health Service Corps (NHSC) and the National Institutes of Health (NIH).

Furthermore, NHSC supports this by providing up to $120,000 loan assistance for eligible full-time healthcare professionals. While the NIH assists up to $50,000 per year to healthcare professionals engaged in qualified research.

Additionally, qualified nurses may also be eligible for a loan repayment of up to 60% through the Nurse Corps program in exchange for a two-year service commitment.

Service Member Loan Repayment

Members of the U.S. military are eligible for Public Service Loan Forgiveness (PSLF) and can explore various student loan assistance programs designed for service members. Typically, the U.S. Army has a dedicated program that repays up to $65,000 in student loans for eligible members.

However, the Coast Guard assists of up to $60,000. Other military branches also have their student loan repayment programs in place.

Income-Driven Repayment

The U.S. Department of Education provides four income-driven repayment (IDR) programs designed for eligible federal loan borrowers who meet the eligibility criteria. These programs offer a suitable option for individuals who may not be qualified for other forgiveness programs.

Moreover, the IDR plans are determined based on the borrower’s income, leading to a reduction in the monthly repayment amount. Furthermore, borrowers have the remaining balance forgiven after making 20 or 25 years of qualifying payments, depending on the specific IDR plan chosen.

It’s important to note that your student loan servicer maintains your federal student loan repayment. To enroll in a repayment plan or make changes to your existing plan, collaborate with your servicer. Typically, this process can be completed online through the servicer’s website.

Student Loan Forgiveness Eligibility Criteria

Individuals with federal student loan obligations and those eligible for specialized repayment plans, such as income-based options, could potentially benefit from debt forgiveness.

  1. The Public Service Loan Forgiveness (PSLF) Program extends potential relief to graduates employed by government or non-profit entities.
  2. Teachers investing their time in full-time roles for a consecutive five-year period within low-income elementary or secondary schools or educational service agencies may be qualified for forgiveness, with a rate of $17,500 on Direct Loans or FFEL Program loans.
  3. If a university or school ceases operations while a student is enrolled, eligibility for federal student loan discharge may arise, providing a potential remedy for financial burden.

Loan forgiveness or cancellation assists when individuals find themselves free from making payments due to their engagement in specific government or nonprofit jobs.

Advantages of Student Loan Forgiveness

  1. Provides relief from overwhelming debt, alleviating the financial strain on individuals.
  2. Acts as an incentive for individuals to engage in public service or nonprofit work, contributing to societal well-being.
  3. It frees up income by eliminating or reducing debt obligations, allowing for increased spending or saving.

Disadvantages of Student Loan Forgiveness

  1. Requires several years to meet eligibility criteria, necessitating a prolonged commitment to specific occupations or repayment plans.
  2. This may result in increased taxable income, leading to potential tax obligations on the forgiven amount.
  3. Income-driven repayment plans could result in a quicker accumulation of interest, affecting the overall cost of the loan over time.

How To Get Student Loan Forgiveness

Securing student loan forgiveness involves a two-step process. Initially, individuals must consolidate their loans into a single debt, especially if they possess federal student loans that are excluded as direct loans.

Additionally, the application for forgiveness is initiated through the submission of a specific form. These include the Federal Student Aid’s Public Service Loan Forgiveness (PSLF) and Temporary Expanded PSLF (TEPSLF) Certification and Application.


After your student loans are forgiven, a part or the entirety of your debt is eradicated, freeing you from the obligation to repay that specific amount. For those with federal loans, the U.S. government provides numerous options for securing federal student loan forgiveness.