What You Need to Know About Student Loan Forgiveness Programs

Student loan forgiveness is not automatic, but several programs exist that cancel part or all of your debt under specific conditions

Student loans are not forgiven straightforward by waiting or by paying on time. Forgiveness happens only when you meet the exact requirements of a specific program — and different programs have different rules about income, job type, payment history, and loan type. Some forgiveness programs are permanent law. Others have been proposed, paused, or changed by court order. The programs that actually exist right now are Public Service Loan Forgiveness, income-driven repayment forgiveness, Teacher Loan Forgiveness, and a few smaller programs tied to specific professions or hardships.

The key difference between these programs is what you have to do to reach forgiveness. Public Service Loan Forgiveness requires you to work in government or nonprofit jobs for 10 years while making payments. Income-driven repayment forgiveness lets you pay based on your income for 20 to 25 years, then forgives the remaining balance. Teacher Loan Forgiveness cancels up to $17,500 if you teach in a low-income school for five years. Each one has separate paperwork, separate important date, and separate rules about which loans may have access to.

Key Takeaways

• Public Service Loan Forgiveness cancels remaining debt after 120 may have access to payments while working full-time for a government agency or nonprofit organization.
• Income-driven repayment plans forgive any remaining balance after 20 to 25 years of payments, but the forgiven amount may be treated as taxable income.
• Teacher Loan Forgiveness cancels up to $17,500 for teachers who work in low-income schools for five consecutive years.
• You must enroll in the correct repayment plan and submit the right paperwork to the loan servicer — forgiveness does not happen automatically even if you meet the requirements.
• Proposed forgiveness programs that have not yet become law are separate from these existing programs and their status changes frequently.

Public Service Loan Forgiveness: 10 years of payments while working for government or nonprofit

Public Service Loan Forgiveness (PSLF) cancels the remaining balance on your federal student loans after you make 120 may have access to monthly payments while working full-time for a U.S. federal, state, or local government agency, or for a nonprofit organization that has 501(c)(3) status. The payments do not have to be consecutive, but you must be employed in a may have access to job when you make each payment.

You must be enrolled in an income-driven repayment plan — either PAYE (Pay As You Earn), REPAYE (Revised Pay As You Earn), IBR (Income-Based Repayment), or ICR (Income-Contingent Repayment). Standard 10-year repayment does not count toward PSLF. You submit Form 10-F-1 (Public Service Loan Forgiveness Employment Certification Form) to your loan servicer every year or when you change jobs, so the servicer can track your may have access to payments. After 120 payments, you submit a final process for forgiveness.

Common mistakes include staying in Standard repayment instead of switching to an income-driven plan, not submitting the employment certification form, or working for an organization that does not have 501(c)(3) status (many nonprofits do not). You can check whether your employer qualifies using the PSLF Help Tool on the Federal Student Aid website.

Income-driven repayment forgiveness: 20 to 25 years of payments based on your income

If you enroll in an income-driven repayment plan, any remaining loan balance is forgiven after you make payments for 20 years (under PAYE or REPAYE) or 25 years (under IBR or ICR). Your monthly payment is calculated as a percentage of your discretionary income — typically 10 to 20 percent — so the payment can be as low as $0 if your income is below the poverty line.

The forgiven amount is treated as taxable income in the year forgiveness occurs. This means if you have $100,000 forgiven, the IRS may count that as $100,000 in income for that tax year, and you could owe income tax on it. Some states do not tax forgiven student loan debt, but federal tax applies in all states. You should plan for this tax bill before forgiveness happens.

Income-driven repayment is available for federal loans (Direct Loans and older Federal Family Education Loans). Parent PLUS loans do not may have access to for income-driven forgiveness unless you consolidate them into a Direct Consolidation Loan first. Private student loans do not may have access to for any forgiveness program.

Teacher Loan Forgiveness: up to $17,500 for five years in a low-income school

If you teach full-time for five consecutive school years in a low-income elementary or secondary school, you can have up to $17,500 of your federal student loans forgiven. The amount depends on the subject you teach: teachers of math, science, special education, or English as a second language in high-poverty schools can receive the full $17,500. Teachers of other subjects receive $5,250.

Your school must be on the Department of Education's list of low-income schools, which you can search by school name or address on the Federal Student Aid website. You must be employed as a full-time teacher during all five years. You submit Form 10-F-2 (Teacher Loan Forgiveness process) to your loan servicer after you complete the five years.

Teacher Loan Forgiveness applies only to federal loans and does not require you to be in a specific repayment plan. You can use it alongside other forgiveness programs — for example, you could receive Teacher Loan Forgiveness and then continue making payments toward Public Service Loan Forgiveness if you work for a government school district.

Other forgiveness programs for specific professions and circumstances

Several smaller programs forgive loans for people in specific fields. Nurses, doctors, and other health professionals who work in underserved areas may may have access to for loan repayment through the National Health Service Corps Loan Repayment Program. Military members can use the Military College Loan Repayment Program. Lawyers who work in public interest law may may have access to for the Law School Loan Repayment information Program, which varies by state.

Borrowers who become permanently and totally disabled can have their federal loans discharged (canceled) through the Total and Permanent Disability Discharge program. Borrowers whose schools closed while they were enrolled or shortly after they withdrew may may have access to for Closed School Discharge. Borrowers defrauded by their school may may have access to for Borrower Defense to Repayment.

These programs have different process processes and different rules about which loans may have access to. You can search for programs by profession or circumstance on the Federal Student Aid website or contact your loan servicer to ask which programs you might be may be able to access for.

Why forgiveness does not happen automatically even when you meet the requirements

Forgiveness requires you to submit paperwork and enroll in the correct repayment plan. Your loan servicer does not automatically move you into an income-driven plan or track your Public Service Loan Forgiveness payments unless you ask. Many borrowers make 10 years of payments in Standard repayment, thinking they are working toward forgiveness, only to discover that Standard repayment does not count toward any forgiveness program.

For Public Service Loan Forgiveness, you must submit the employment certification form regularly so the servicer can count your payments. If you do not submit it, the servicer may not know you are working in a may have access to job, and your payments will not count. After 120 payments, you must submit a separate process for forgiveness — it does not happen automatically.

For income-driven repayment forgiveness, you must recertify your income every year or every two years (depending on the plan) to keep your payment amount correct. If you do not recertify, your payment may jump to a much higher amount, or your loan may go into default. Forgiveness happens automatically after the required number of years of payments, but only if you have stayed current on payments and kept your income certification up to date.

Proposed forgiveness programs versus programs that exist now

Broad student loan forgiveness programs that would cancel debt for millions of borrowers have been proposed in Congress and by presidential administrations, but these are separate from the programs described above. Proposed programs have not become permanent law and their status changes with elections and court decisions. Some have been paused or blocked by court order.

The programs that exist right now — Public Service Loan Forgiveness, income-driven repayment forgiveness, Teacher Loan Forgiveness, and the smaller programs listed above — are permanent law and do not depend on future legislation. If you are considering whether to wait for a proposed program or to enroll in an existing one, you should know that existing programs have clear rules and timelines, while proposed programs have no may provide timeline or final form.

You can track proposed legislation on Congress.gov or on the Federal Student Aid website. Your loan servicer can tell you about existing programs you might may have access to for right now.

Frequently Asked Questions

Do I have to pay taxes on forgiven student loan debt?

It depends on the program. Forgiveness through income-driven repayment plans is treated as taxable income, so you may owe federal income tax on the forgiven amount. Public Service Loan Forgiveness, Teacher Loan Forgiveness, and Closed School Discharge are not taxable. Borrower Defense to Repayment and Total and Permanent Disability Discharge are also not taxable. Ask your loan servicer which program you are using so you know whether to expect a tax bill.

Can I use more than one forgiveness program?

Yes, but the rules vary. You can receive Teacher Loan Forgiveness and then continue making payments toward Public Service Loan Forgiveness if you work for a government school. You cannot use Public Service Loan Forgiveness and income-driven repayment forgiveness on the same loan — you have to choose one path. Ask your loan servicer how multiple programs interact with your specific loans.

What happens if I leave my job before reaching 120 payments for Public Service Loan Forgiveness?

Your payments stop counting toward the 120 required. The payments you already made still count, so if you return to a may have access to job later, you can resume counting toward forgiveness. You do not lose credit for payments already made, but you must be in a may have access to job when you make each payment for it to count.

Can private student loans be forgiven?

No. All forgiveness programs listed here explore only to federal student loans. Private loans are not may be able to access for any government forgiveness program. Your options with private loans are to pay them off, refinance them, or in rare cases of permanent disability or school closure, contact your lender directly to ask about hardship options.

How do I know if my employer qualifies for Public Service Loan Forgiveness?

Use the PSLF Help Tool on the Federal Student Aid website to search by employer name or address. You can also ask your employer's human resources department. Government agencies at all levels (federal, state, local, tribal) may have access to. Nonprofits must have 501(c)(3) status — you can verify this on the IRS Tax Exempt Organization Search tool. Religious organizations and some other nonprofits may have different status codes that still may have access to; the PSLF Help Tool will tell you.