Student loan forgiveness: What are my options?

Student loan forgiveness programs can offer significant repayment relief for borrowers. There are a handful of forgiveness programs, and each has its own eligibility criteria. If you and your federal loans meet these requirements, you can have all or a portion of your education debt canceled.

This guide will cover what options federal borrowers have for student loan forgiveness today.

Student loan forgiveness in 2024

Student loan forgiveness was at the forefront of education policy news in 2023. The Supreme Court ruled against Biden’s forgiveness plan, which offered up to $20,000 in one-time loan relief to eligible federal borrowers.

Despite this, the Biden administration has continued to develop solutions that offer relief to borrowers. For example, it offered a one-time adjustment for income-driven repayment (IDR) forgiveness payment counts. This adjustment has already helped many federal loan borrowers accelerate their payment credit toward forgiveness eligibility.

Borrowers can also look forward to a second wave of benefits under the new Saving for a Valuable Education (SAVE) repayment plan, effective in July 2024. One of these benefits includes loan forgiveness for borrowers who have loans with original principal balances of $12,000 or less, after making 10 years of payments.

A new Student Loan Debt Relief Committee under the U.S. Department of Education was also created in 2023. Its mission is bringing together a focused group of legislators and negotiators to reach a consensus on future proposed student financial relief regulations.

While the future of debt relief remains uncertain, there are a few forgiveness programs you may be able to take advantage of today.

Public Service Loan Forgiveness (PSLF)

If you work in public service, you have unique access to the PSLF program. Like its name suggests, the program is for borrowers who work full-time at a not-for-profit organization, or for a local, state, federal, or tribal government organization.

After making 120 qualifying payments under an IDR plan (or the Standard Repayment plan), your remaining eligible Direct Loan balance is forgiven. This forgiven amount isn’t viewed as federal taxable income by the IRS. However, this could change — a provision in the American Rescue Plan Act put this into effect through 2025. After it expires, this tax treatment of loan forgiveness could end.

• Best for: Public service employees
• Qualifying loans: Direct Loans and other federal loans that are consolidated with a Direct Consolidation Loan
• Forgiveness timeline: 10 years or after 120 qualifying payments
• Forgiveness amount: Your remaining loan balance

How to apply: Use the Federal Student Aid’s PSLF help tool to submit an application, or fill out a handwritten form and mail it to your loan servicer.

Income-driven repayment forgiveness

There are four income-driven repayment plans to choose from, depending on your situation and loan type: Saving on a Valuable Education (SAVE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR).

Payment amounts for income-driven repayment plans are calculated using your income and family size data, and payments are restricted to 10%, 15%, or 20% of your discretionary income (it varies by plan). Upon completing any IDR plan — which takes 20 or 25 years, depending on the plan — your eligible federal student loan balance is forgiven. Unlike PSLF, you might have to pay income taxes on IDR forgiven amounts if you still have remaining debt after your repayment period.

• Best for: Borrowers who work in the private sector
• Qualifying loans: Varies by plan, but all include Direct Subsidized Loans, Direct Unsubsidized Loans, graduate PLUS loans, and Direct Consolidation Loans (as long as they didn’t repay parent PLUS loans)
• Forgiveness timeline: 20 or 25 years
• Forgiveness amount: Your remaining loan balance, though this varies by borrower

How to apply: Submit an Income-Driven Repayment Plan Request to your federal loan servicer(s) online or via mail.

Teacher Loan Forgiveness (TLF)

Highly qualified teachers who are employed full-time at a low-income school or educational service agency might qualify for the federal Teacher Loan Forgiveness program. The program defines “highly qualified” teachers as those who’ve earned at least a bachelor’s degree, are state-certified in teaching, and haven’t had their certification or licensure requirements waived.

In terms of service requirements, you must teach for five complete and consecutive academic years, one of which must have been after the 1997-98 academic year. You are not allowed to have an unpaid balance on a Direct Loan or Federal Family Education Loan (FFEL) as of Oct. 1, 1998, or on a Direct Loan or FFEL program loan that was taken out after Oct. 1, 1998. Finally, the loans you’re seeking forgiveness for must have been made prior to the end of your five-year teaching service.

• Best for: Teachers with lower unpaid federal loan balances
• Qualifying loans: Direct Loans and FFEL program loans
• Forgiveness timeline: 5 years
• Forgiveness amount: Up to $17,500, depending on the subject taught

How to apply: Have your school’s chief administrative officer complete their section on the Teacher Loan Forgiveness Application, and send your loan servicer(s) the completed form once you’ve completed your five years of service.

Check out: Student loan forgiveness for teachers: What you need to know

State-sponsored forgiveness

If your situation doesn’t qualify for federal loan forgiveness, you might find relief through a state-sponsored loan repayment program. These programs are often designed to attract workers in critical professions to serve in areas with low coverage. Programs commonly appeal to workers in health care, law, education, social work, and more.

You generally must have a qualifying student loan balance, meet certification and/or licensure criteria, and meet other eligibility requirements. Additionally, many state loan repayment assistance programs involve a service obligation of a predetermined number of years.

• Best for: Borrowers employed in a qualifying field who reside in a participating state
• Qualifying loans: Varies, but both private and federal student loans are often eligible
• Forgiveness timeline: Varies, but typically requires one or more years working in an eligible job
• Forgiveness amount: Varies

How to apply: Reach out to your state’s Department of Education for additional information about programs, requirements, and how to apply.

Loan discharge options

Student loan forgiveness isn’t the only way to get federal student loans canceled. Student loan discharge means you’re no longer obligated to repay the loan. Depending on your situation, you might have your loan balance discharged due to specific circumstances.

1. Disability

You might qualify for a loan discharge if you become totally and permanently disabled. To qualify, you must provide disability documentation from the Department of Veterans Affairs, Social Security Administration, or an authorized medical professional.

Eligible loans include Direct Loans, FFEL program loans, and Perkins Loans. This discharge option can also release you from a Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation.

2. School closure

Discharging your student loans might be possible if your school closed while you were enrolled, on an approved leave of absence, or within 180 days after withdrawing from the school. Loans that are eligible for school closure discharge include Direct Loans, FFEL program loans, and Perkins Loans.

Typically, if you meet cancellation requirements and your school shuts down on or after July 1, 2023, your loans will automatically be discharged one year after the school’s closure date. But you can apply for loan discharge through your servicer earlier, if you prefer.

As of Aug. 7, 2023, the release of new regulations regarding loan cancellation due to school closure has been delayed. You can still apply for school closure discharge based on the old rules, but keep an eye on StudentAid.gov for changes regarding this option.

3. Borrower defense

If you believe your loan should be discharged because your school misled you, you can apply for a borrower defense discharge. There are six grounds for claiming this type of loan discharge.

For example, one ground for discharge is if your school misrepresented its educational services, tuition and fee charges, or employability of its graduates. Another eligible reason for discharge is if the school omitted or concealed key information that’s necessary for a reasonable person to make decisions about their enrollment, or borrowing loans.

4. Bankruptcy

You might be able to discharge your federal loans if you filed for bankruptcy. However, this process involves a separate adversary proceeding. To be successful, you’ll need to prove to a bankruptcy court that repaying your federal student loans would cause undue hardship for you, and if applicable, your dependents.

5. Death

Upon your death, a family member or legal representative can have your unpaid federal student loans discharged if they provide your loan servicer with proof of death. Forms of proof include an original or acceptable copy of your death certificate.

Additionally, if a parent PLUS loan is borrowed, it can be discharged if the parent borrower dies or if the student dies (the individual the parent borrowed the loan for). To initiate the process, contact the loan’s servicer.

Private student loan forgiveness

Private student loans don’t qualify for federal forgiveness, so you’ll need to explore alternatives if your private loans aren’t manageable. Options include asking your employer about student loan repayment assistance benefits, or reaching out to your lender about its deferment or forbearance programs.

Sometimes, changing your loan terms is enough to make payments more affordable. For instance, lowering your interest rate, or extending your repayment term so you have a lower monthly payment, can make your loan more manageable. A student loan refinance might be an alternative to loan forgiveness that can achieve these goals. 

Always compare student loan refinance lenders to find the lowest rate for you. While you can refinance federal student loans too, doing so causes you to lose access to federal benefits and protections.