Student loan repayment no longer fits neatly into a standard, fixed-payment, 10-year plan. Payment options may be graduated or adjusted to your income to allow repayment over 20 or even 25 years. Consolidated loans may extend up to 30. However, they all share the same requirement: that you cross into the adult world of full-time professional employment and repay them, with no excuses. We want you to know that a number of programs exist, and you have every right to apply for loan forgiveness.

In this guide to getting student loan forgiveness:
What Is Loan Forgiveness, Cancellation and Discharge?
Obama Student Loan Forgiveness Program
Public Service Loan Forgiveness (PSLF) Program
Career-Based Loan Repayment Programs (LRPs)

  1. What Is Loan Forgiveness, Cancellation And Discharge?

    Whether you're seeking discharge or cancellation and forgiveness of your loans, you must contact your loan servicer to submit the proper application.

    Discharge: According to the Federal Student Aid Office, discharge is "the release of a borrower from the obligation to repay his or her loan." It applies mostly to debt incurred through conditions a student could not control, such as death, disability, school closure, identity theft, and school fraud. However, it also includes the Public Service Loan Forgiveness Program and a partial debt provision for full-time teachers.

    Cancellation and forgiveness: These two terms are often used together or interchangeably. While death and permanent disability are valid causes for forgiveness, most requirements are tied to former students' public service as career professionals using their education and skills to benefit less privileged individuals and communities.

  2. Obama Student Loan Forgiveness Program

    Students have seven options for loan repayment plans, depending on their loan eligibility and financial circumstances:

    • Standard.
    • Graduated.
    • Extended.
    • Income-Based.
    • Pay as You Earn.
    • Income-Contingent.
    • Income-Sensitive.

    Terms for the Income-Based, Pay as You Earn and Income-Contingent Repayment Plans are 20 to 25 years, and monthly payments correlate to income and financial need: that is, "partial financial hardship." As long as the loan remains in good standing, if a balance remains at the end of the loan's term, that balance will be cancelled, or forgiven. Note that individuals under these programs might qualify for forgiveness even sooner under the Public Service Loan Forgiveness Program.

  3. Public Service Loan Forgiveness (PSLF) Program

    The first caveat for qualifying for the PSLF Program is that you must have a direct loan. It can be subsidized or non-subsidized, but it has to fall under these categories:

    • Stafford or Ford Loan – the most common.
    • PLUS Loan – for parents or graduate/professional students.
    • Consolidation Loan.

    You may also qualify for the PSLF Program If you have a: 

    • Federal Family Education Loan (FFEL).
    • Federal Perkins Loan.
    • Health Professions or Nursing Loan.

    As long as you have FFELs or Direct Loans, you can refinance them as well as your Federal Perkins Loan into a Direct Consolidation Loan, making you eligible for the PSLF Program. Note that the William D. Ford Federal Direct Loan Program has replaced the FFEL Program.

    The second caveat to qualifying for the PSLF Program is that only full-time employees working for a public service organization, the AmeriCorps or the Peace Corps are eligible. The public service organization can be public or private, to include governmental bodies, nonprofits and schools, libraries, legal services, emergency services, law enforcement, public safety organizations, firefighters, child care providers, the military, care providers for the disabled or elderly, as well as others.

    The third caveat is that to be eligible, your loan must be in good standing, and you must have made 120 consecutive payments on your loans on or after October 1, 2007. If you fulfill all three requirements, you most likely qualify for PSLF and should contact your loan servicer. You may be able to gain forgiveness for any remaining student loan balances.

  4. Career-Based Loan Repayment Programs (LRPs)

    Continuing in the public service vein, individuals willing to offer their skills and talents in underserved areas can earn the reward of loan forgiveness. Programs are career-focused, offering extensive options but varying in terms of service, dollar amounts forgiven and loan eligibility:

    • Teacher Loan Forgiveness Program.
    • Teacher Cancellation.
    • Veterinary Medicine LRP.
    • Law School-Based and Statewide Loan Repayment Assistance Programs (LRAPs).
    • Loan Repayment for Civil Legal Assistance Attorneys.
    • Faculty LRP.
    • National Institutes of Health LRP.
    • NURSE Corps LRP.
    • Indian Health Service LRP.
    • National Health Service Corps LRP.
    • State LRP.
    • Military LRPs – Active Duty Health Professions LRP as well as Air Force, Army, Navy and National Guard Student LRPs.
    • Specialty Equipment Market Association (SEMA) Loan Forgiveness Program.
    • Child Care Provider Forgiveness Program – now part of Loan Forgiveness for Service in Areas of National Need.
    • Employer-Offered LRPs.

    Incentives and rules are constantly changing. That said, currently, student loan balances forgiven through the career-based PSLF Program are not subject to taxes. However, most other student loan discharges of debt balances remaining at your loan term's end, including those due to financial hardships, are taxable.

Additional Resources At