Student loan forgiveness is typically limited to federal loans and requires meeting specific criteria based on the program you’re applying for. After meeting those requirements generally, you will need to submit an application to formally request forgiveness. While not everyone qualifies, those who do may have some or all of their student debt eliminated. Determining your eligibility and navigating the application process can feel overwhelming, but we’re here to help you explore your federal forgiveness options. If you’re unsure about your loan terms or eligibility, contact your loan servicer to learn more about programs that might work for you.
Read more to understand President Biden's Student Loan Forgiveness and Repayment Relief
What is Student Loan Forgiveness?
Student loan forgiveness can eliminate student loan debt if you meet the criteria for an existing forgiveness program. However, it's important to note that student loan forgiveness is not the only option available to eliminate your debt. There are also student loan discharge options. The main difference between student loan forgiveness and discharge lies in the circumstances that qualify you for each. Generally, student loan forgiveness is offered to borrowers who have fulfilled specific service requirements, such as working for an eligible public service employer for 10 years, as in the case of Public Service Loan Forgiveness (PSLF). On the other hand, student loan discharge is intended for borrowers facing unfortunate circumstances, such as fraud, total and permanent disability, or death.
When it comes to student loan forgiveness, the amount forgiven can be fully or partially canceled. Dependent upon the type of loan you have (federal or private), your repayment plan, career, employer, and personal finance situation there may be forgiveness programs available to you. While being relieved from your student loan debt sounds like an attractive option, know that it is not available to everyone and for those that are eligible, there are strict requirements that must be met to be approved.
Student loan forgiveness programs such as the federal government’s Public Service Loan Forgiveness (PSLF) require that you qualify for forgiveness, usually through your type of employment and typically requires repayment for a certain number of years before an application can be submitted.
Forgiveness or cancelation may take several years to qualify for. As of right now, student loan forgiveness is not considered taxable until 2025, which has been a recent change. If you are being contacted about a student loan forgiveness option that seems too good to be true, it probably is. You want to make sure you validate any forgiveness program directly with your student loan servicer (through your portal or by calling a phone number your received from a trusted source). Unfortunately, there are student loan forgiveness scams out there looking to take advantage of people in need. And as experts in student loan repayment, we can confirm to you, there is no such thing as a program called Obama Student Loan Forgiveness, or Biden Student Loan Forgiveness—essentially, if you are offered a forgiveness program with the use of a president’s name, don’t entertain the phone call and hang up.
MORE>>>How to Avoid Student Loan Forgiveness Scams
Eligibility Requirements for Student Loan Forgiveness
It’s not uncommon for forgiveness programs to have unique requirements along with a specific application that must be submitted before loan forgiveness is considered Be aware that there should be no cost in applying for loan forgiveness through a federal program as there is also no application fee. You can get application forms from your loan servicer or from the U.S. Department of Education Federal Student Aid Repayment forms.
Loan Forgiveness Programs
The following federal programs have been created to help those looking for federal student loan forgiveness. Click on the following links for more information about forgiveness programs that you feel may apply to you:
- Teacher Loan Forgiveness
- Public Service Loan Forgiveness (PSLF)
- Closed School Discharge
- Borrower Defense to Repayment
- Total and Permanent Disability Discharge
- Perkins Loan Cancellation and Discharge
- Discharge Due to Death
- Discharge in Bankruptcy (rare)
- Borrower Defense Loan Discharge
- False Certification Discharge
- Unpaid Refund Discharge
Student Loan Relief beyond Student Loan Forgiveness
If the programs above are not applicable to you but you still need help making your monthly student loan payments, talk with your loan servicer about different options to help.
Change your Repayment Plan
Your choices for possible student loan repayment plans vary depending on the kind of student loans borrowed, federal or private. Federal student loans have a variety of repayment options, and you can change repayment plans at no cost to you. Private student loans also have repayment plans, but no matter if you have a federal or private student loan, you should contact your loan servicer if making your monthly payment is becoming difficult, to learn what if any options are available to you.
Consolidate or Refinance
In trying to deal with multiple student loan lenders, you may want to explore what loan refinance or consolidation can do for you. A Federal Direct Consolidation Loan can take two or more federal student loans and turn them into one new loan. No private loans can be included with federal direct loan consolidation.
Private refinance loans (also called private student loan consolidation) can refinance federal student loans, private student loans, and loans financed by states or schools together. It’s important to note, that refinancing federal loans with a private lender will forfeit any federal loan benefits you may have.
If you can find better terms such as a lower APR and repayment terms that fit your budget, then it might be advantageous to explore refinancing your student loans. While you are not required to include all your loans, if you are looking to reduce your number of monthly bills, consolidation can be a helpful option.
Apply for Deferment or Forbearance
Deferment or forbearance enable your lender to temporarily modify the payment obligation on your education loan. Both private and federal student loans offer deferment and forbearance, but the terms will vary. Forbearance can temporarily cease your monthly payments, temporarily reduce the monthly payment amount, or extend the timeframe for the repayment. Federal student loans offer a variety of deferment types depending on your circumstances, and each has its own set of eligibility criteria.
During a deferment, you are not required to make monthly or quarterly principal payments. When you are placed in either deferment or forbearance, the interest on your loan may continue to accrue (build) and will be capitalized (added to the loan balance) if left unpaid. If you are in possession of a subsidized federal student loan such as a federal Perkins Loan or a Direct Subsidized Loan, the government will pay the interest during a deferment. Loans such as PLUS loans and Direct Unsubsidized Loans require you to be responsible for the interest while in deferment. If not paid, the interest will be capitalized with the balance of the loan when repayment resumes.
