Everything you need to know about student loan forgiveness programs

Nancy Howard



Students every year are taking out loans to pay for their studies. Whether it’s because they want to afford a particularly costly university program or they don’t want to burden their parents, these students are making a decision that could have serious financial consequences for them in the future.

Luckily, student loan forgiveness programs exist and can be of huge help to individuals with studies-related debt. Here’s everything you should know about student loan forgiveness programs and how you might be able to benefit from them.

student loan forgiveness

Everything you need to know about student loan forgiveness programs. Source:

What is student loan forgiveness?

Student loan forgiveness is the process as a result of which you won’t have to pay a part of or your entire federal student loan. The loans in question are specifically the ones used for post-secondary education, and depending on your loan type, you might be eligible for loan forgiveness. Most student loan forgiveness programs work with direct loans, Perkins loans, and others. Private loans don’t qualify for such programs.

Students who want to benefit from student loan forgiveness programs have to apply for them and might have to continue making payments until they are approved for the program. Student loan forgiveness can be earned with public service, but loans can even be discharged due to the borrower’s disability or the closing of the school. Individuals who feel their educational institution has misled or defrauded them can also apply for loan forgiveness.

How does student loan forgiveness work?

Student loan forgiveness may seem like an incredible opportunity to get rid of your debt, but it isn’t all that simple. Campbell Whitney, an expert from the writing services reviews and reviews of essay writing services site, puts it this way, “Not many people are actually eligible for these programs. Requirements vary, but most programs will require you to be employed in a public service job like teaching, government or military service, and AmeriCorps.”

The main student loan forgiveness programs are:

  • Direct Loan Program
  • Perkins Loan Program
  • Federal Family Education Loan Program

What are the types of student loan forgiveness?

Different programs will have different requirements – and different types of student loan forgiveness available to you. These can include:

  • Public Service Loan Forgiveness (PSLF): As the name suggests, this is for individuals working in public service jobs for the government or for nonprofits. Volunteer work, military service, and medical practice could also help you get part of or all of your loan forgiven. You must also first make 120 qualifying payments while working for a qualified employer. This usually translates to 10 years on the job and 10 years of monthly payments. Qualifying jobs usually include those in government, social work, police and fire departments, and nursing. Only direct loans by the federal government are eligible for this program.
  • Repayment Plans with Loan Forgiveness: If you aren’t working in a public service job, you may still get part of your loan forgiven or you can opt for a repayment plan. Such plans include income-based repayment (IBR), income-contingent repayment (ICR), and pay as you earn (PAYE) and revised pay as you earn (REPAYE). If you work for a federal agency, your employer can repay up to $10,000 of your loans per year through the federal student loan repayment program.
  • Specialized Loan Forgiveness Programs: There is a number of specialized loan forgiveness programs that are available to those volunteering or working for selected organizations. There are AmeriCorps VISTA, AmeriCorps NCCC, or AmeriCorps State and National programs, Army National Guard programs, programs for full-time teachers in low-income schools or educational service agencies, and programs for medical and nursing school graduates.
  • Borrower Defense: Officially known as “borrower defense to loan repayment forgiveness”, loan discharge is another option to consider. This is only applicable if your school has misled you or engaged in some type of misconduct.

What is the difference between loan forgiveness and loan discharge?

One important thing you should remember is that loan forgiveness and loan discharge are different from one another. Elana Archer, an expert from the custom writing reviews and ratings site, explains it this way, “Loan discharge allows you not to pay your federal loans if it is proven that the educational institution has misled you in some way. In some cases, you might even be entitled to receive a refund of your previous payments on the loan.”

There are different circumstances in which your student loans can be discharged, including:

  • Closure of school during the studies
  • Falsification of loan qualifications by the school
  • Permanent disability or death of the borrower
  • Use of identity theft on someone else’s part to secure the loan
  • Failure of the school to refund required loans to the lender

These are considered to be “circumstances beyond the borrower’s control”. They don’t include such things as dropping out before graduation or the inability to find a job after graduation. They do include illegal recruiting tactics on the school’s part (e.g. guaranteeing a well-paid job after graduation) and other types of misconduct.

What are the disadvantages of student loan forgiveness?

While student loan forgiveness has numerous advantages, there are still some drawbacks to consider before you start applying for programs:

  • If you choose an income-based repayment plan, you could end up with more interest accruing on your loan due to the repayment being stretched out over a longer period of time. If you expect to have a significant increase in income, it’s better to choose an extended repayment or a graduated repayment plan.
  • Laws are still changing and there are talks of introducing broader loan forgiveness that would help borrowers that don’t currently qualify for student loan forgiveness programs. But because laws are changing, those who do qualify now could find themselves in a challenging position if something new gets introduced that won’t work in their favor.
  • Depending on your career choices and the job you are working in, you might actually be able to repay your loans faster working in the private sector. This is particularly important to consider if you are trying to get part of your loan forgiven. Jobs that would make you eligible for loan forgiveness often don’t pay enough to help you repay your remaining loans in a reasonable amount of time.

All in all, student loan forgiveness programs can definitely be quite beneficial to many students as long as they meet relevant requirements. This article will help you learn more about student loan forgiveness programs and find a way how to use this opportunity to aid you financially.

Nancy P. Howard has been working as a journalist at the online magazine in London for a year. She is also a professional writer in such topics as blogging, SEO and marketing.


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