Student loans are a necessary evil for many individuals pursuing higher education. Unfortunately, the burden of debt can be overwhelming, especially for those who are unable to find employment that pays enough to cover the cost of repayment. Fortunately, there are several student loan forgiveness programs that may provide relief to borrowers struggling with student loan debt. In this article, we will discuss 11 different programs and their eligibility requirements.
1. Public Service Loan Forgiveness (PSLF)
Public Service Loan Forgiveness (PSLF) is a program available to those who work in qualifying public service jobs, including government organizations, non-profit organizations, and certain other organizations. To qualify for PSLF, borrowers must make 120 on-time payments on their federal direct loans while working full-time for a qualifying employer. Only payments made after October 1, 2007, count towards the 120-payment requirement. Once borrowers have made 120 payments, they can apply for loan forgiveness. It’s important to note that not all public service jobs qualify for PSLF, so borrowers should check with their employer to confirm eligibility.
2. Teacher Loan Forgiveness
The Teacher Loan Forgiveness program is available to teachers who have been employed in a qualifying low-income school district for five consecutive years. To be eligible for this program, borrowers must have federal Direct Loans or Federal Family Education Loan (FFEL) Program Loans. Borrowers can receive loan forgiveness of up to $17,500 if they teach math, science, or special education in a qualifying school. Those who teach other subjects may be eligible for up to $5,000 in loan forgiveness. It’s important to note that borrowers cannot receive loan forgiveness under both the Teacher Loan Forgiveness and the Public Service Loan Forgiveness programs.
3. Perkins Loan Cancellation
Perkins Loan Cancellation is available to teachers, nurses, and other public service employees who have a Perkins Loan. Borrowers can have up to 100% of their Perkins Loan cancelled if they work in a qualifying profession for a certain period of time. The amount of loan cancellation depends on the borrower’s profession, with teachers, for example, eligible for up to 100% cancellation if they teach full-time for five years in a low-income school. Borrowers should contact their loan servicer to learn more about eligibility and the application process.
4. Income-Driven Repayment Plan Forgiveness
Income-driven repayment plans allow borrowers to make payments based on their income and family size, rather than the amount they owe. After making payments through an income-driven repayment plan for 20-25 years, depending on the specific plan, borrowers may be eligible for loan forgiveness for any remaining balance. It’s important to note that loan forgiveness under an income-driven repayment plan is considered taxable income.
5. Borrower Defense to Repayment
Borrower Defense to Repayment is available to those who were defrauded by their school or have had their rights violated. Borrowers may be eligible for loan forgiveness if their school violated state law, such as by making false claims about job placement rates, or violated federal law, such as by using illegal recruiting practices. Borrowers should contact their loan servicer to learn more about eligibility and the application process.