In certain situations, individuals can eliminate some or all of their student loans through a student loan forgiveness program. This saves them from years of loan repayment and frees up more income to invest in their future.
Depending on your college degree and your current occupation, you may qualify. Here are five ways to get your student loans forgiven.
1. Public Service
The Public Service Loan Forgiveness program (PSLF) offers loan forgiveness if you work full-time for a qualifying employer and make 120 qualifying monthly payments during that time. To qualify for PSLF, you must be employed by the federal government; a state, local, or tribal governments; or a not-for-profit organization.
Volunteering for AmeriCorps or Peace Corps counts as full-time employment under this program. For your experience to count, you typically need to use your end-of-service award to make your loan payments for the previous year.
2. Become a Full-Time Teacher
Full-time teachers are eligible for the PSLF program, but they can choose another loan forgiveness program instead. Under the Teacher Loan Forgiveness Program, if you teach full-time for five complete and consecutive academic years in a low-income school or educational service agency, and meet other qualifications, you may be eligible for forgiveness of up to $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans.
To receive $17,500, you must be a secondary math or science teacher or a special education teacher. Teachers in other subjects receive a maximum of $5,000.
State and local school districts may also offer loan forgiveness programs.
3. Join the Military
One of the benefits of joining the military is student loan repayment. Currently, the Army, Army National Guard, Air Force, Air Force National Guard, and Navy offer student loan repayment programs up to $65,000, depending on the branch, the work you do, and how long you serve. Unfortunately, the Marine Corps, Coast Guard, and Air Force Reserves don't offer student loan forgiveness.
4. Become a Doctor or Lawyer
Medical and legal professionals can end up with six-figure student loan debt. Fortunately, several student loan forgiveness programs exist to help them reduce their loan burden:
- The National Institutes of Health repays up to $50,000 in student loan debt for medical students who complete certain types of medical research on topics like medical disparities and contraception.
- Certain health professionals can receive up to $100,000 of student loan forgiveness through the National Health Service Corps Loan Repayment Program in exchange for two to three years of volunteer service at a clinic with a shortage of health professionals.
- Law school graduates may have some of their student loans forgiven by doing non-profit, public sector, or government work. The Department of Justice, the Legal Services Corporation, and several law schools offer student loan repayment programs. Lawyers may also qualify for the PSLF program, depending on where they work.
5. Wait 20 or 25 Years
If you have a federal loan and you're on an income-based repayment (IBR) plan, you can have the balance of your student loan forgiven after 20 or 25 years, depending on when you took out your loan. All federal student loans are eligible except student loans in default, Parent PLUS loans, and Parent PLUS consolidation loans.
Your monthly student loan payments are capped based on your income and family size. For example, a family of three with an annual income of $45,000 would only pay $157 per month on an IBR plan. You can apply for IBR by contacting the lender servicing your loan.
Due to a provision in the American Rescue Plan, student loan forgiveness is tax-free through the end of 2025.
Who Pays for Student Loan Forgiveness
Many people, especially those who've worked hard to repay their loans, oppose student loan forgiveness because it's funded by taxpayers. This is essentially true—if the federal government forgives your student loans, that means taxpayers have paid for your college education.
In that sense, it's the same as using government grants to fund your education. Private student loan forgiveness is pretty much nonexistent, but if private lenders were to offer these types of programs, the banks' other customers would end up funding them through fees and interest.