Student loan forgiveness. The phrase is about as oxymoronic as the phrase definitely maybe.
I hate student loans. I will be the first one to tell you that. And my wife and I have a lot of them as well. And believe me, if there is a way out of them I will (and have) searched high and low to find it. The problem is that most student loan forgiveness programs either (1) don’t work, (2) pay off a really small balance, (3) take way too long, or (4) are some combination of 1-3.
Caveat Alert!
With that being said, there are some student loan forgiveness programs that could be beneficial to people in given circumstances. But before I get into the nuts and bolts of them, let me preface by saying that there is no silver bullet for getting rid of your student loans other than you paying them off yourself. As I have said in several of my other articles, you are the hero of your story. You are the only person that you can count on.
Government programs can be slashed or cut altogether, the military can be a good option but they are notoriously inefficient, if you depend on your employer you may be stuck in a toxic work environment or not living up to your professional potential, 20-25 years is simply too long to wait for student loan relief, and Lord help you if you want to use the PSLF program (that has only a 1.5% approval rate btw).
Now that we have my pessimism out of the way, let’s get into the main types of student loan forgiveness.
(1) Income Based Plans
Income based plans are a student loan forgiveness option. Although not a very good option. All of the income based plans offer student loan forgiveness after 20 years for undergraduate student debt and 25 years for graduate and professional student debt.
Think about that for a minute. You have to pay on these loans for 20 or 25 years until you get any type of student loan forgiveness. That is not a good plan. That means that if you have kids (or will in the next few years) you will likely be paying for their college before you even have yours paid off! That’s ridiculous and honestly irresponsible.
To qualify for income based student loan forgiveness you must be enrolled in one of the following repayment options:
- Revised Pay as you Earn (REPAYE)
- Pay as you Earn (PAYE)
- Income Based Repayment (IBR)
- Income Contingent Repayment (ICR)
(2) Perkins Student Loan Forgiveness
Of all of the different main types of student loan forgiveness programs, this one is probably my favorite. The sad thing is that the Perkins Student Loan Forgiveness Program benefits the smallest number of people.
The Perkins Student Loan Forgiveness program is for Perkins student loans only. Additionally, those eligible for the Perkins student loan forgiveness program are those who work in public service. This mainly applies to teachers but also to others who are performing public service.
The reason that I like this student loan forgiveness option the most is that it usually forgives the loans after five years instead of 10-25 years under the other plans.
To find out if you qualify for Perkins student loan forgiveness you will need to contact the college or university that you attended.
Here is a list of all of the different Perkins loan forgiveness careers and amount of cancellation:
| Teacher | Up to 100% after 5 years |
| Full-time nurse or medical technician | Up to 100% after 5 years |
| Full-time firefighter (for service that began on or after August 14, 2008) | Up to 100% after 5 years |
| Full-time qualified professional provider of early intervention services for the disabled | Up to 100% after 5 years |
| Full-time faculty member at a tribal college or university | Up to 100% after 5 years |
| Full-time speech pathologist with master’s degree working in a Title I-eligible elementary or secondary school | Up to 100% after 5 years |
| Librarian with a master’s degree working in a Title I-eligible elementary or secondary school or in a public library serving Title I-eligible schools | Up to 100% after 5 years |
| Full-time law enforcement or corrections officer | Up to 100% after 5 years |
| Full-time attorney employed in a federal public or community defender organization | Up to 100% after 5 years |
| Full-time employee of a public or nonprofit child or family services agency providing services to high-risk children and their families from low-income communities | Up to 100% after 5 years |
| Full-time staff member in the education component of a Head Start program | Up to 100% for 7 years |
| Full-time staff member in the education component of a pre-k or child care program that is licensed or regulated by a state | Up to 100% for 7 years |
| Military service in the US armed forces in a hostile fire or imminent danger pay area | Up to 100% after 5 years |
| AmeriCorps VISTA or Peace Corps volunteer | Up to 70% for four years |
https://www.forbes.com/advisor/student-loans/student-loan-forgiveness-programs/
(3) Public Service Loan Forgiveness Program
I won’t elaborate on this one too much because I have an entire article devoted to it here.
I’ll just say that this student loan forgiveness option is the WORST.
To qualify (hopefully) for the PSLF program you must:
- Pay on your student loans for 10 years in an income based payment option
- Work for a non-profit, 501(c)(3) organization, or the government
- Not miss any payments for ten years
- Have Federal Direct loans
Sounds easy enough, right? Wrong!
As of June 2020 there have been 150,545 applications for forgiveness through the PSLF program. Of those applications only 2,215 have actually been forgiven.
Seriously. A 1.5% approval rate.
I would never recommend this forgiveness option, but if you decide to investigate it more, you can check it out here.
(4) Teacher Student Loan Forgiveness
The Teacher Student Loan Forgiveness Program isn’t that bad. It just doesn’t forgive very much money. But every little bit helps. You just have to decide if it is worth waiting five years to pay off a pretty small amount of money.
The Teacher Student Loan Forgiveness Program will forgive up to $17,500 in Federal Direct (subsidized or unsubsidized) student loans after five years of in a low-income school district.
Typically, to get this amount forgiven, a teacher must teach a STEM subject (but that depends on the area and the current government regulations that are constantly changing). Teachers that teach in non-STEM areas are usually qualified for $5,000 in student loan forgiveness (Federal Direct unsubsidized or subsidized) after the same five year period.
(5) Misc. Ways of Student Loan Discharge
There are a few reasons that you can have your student loans discharged. (A student loan discharge is technically different from student loan forgiveness but at the end of the day, the result is the same. You don’t have to pay them back.)
- Borrower Defense to Repayment: If the school that you attended actively misled you by making false promises about job prospects, accreditation, potential income, etc. you can have those student loans discharged. This is pretty rare, but unfortunately there are schools out there like this so it does happen.
- Closed School Discharge: If the school that you were attending closed while you were attending and you were unable to complete your studies you can have your student loans discharged. Again, this is rather rare but it does happen.
- Death: There are not many good things about student loans. However, this is one of them. Typically, with a debt that someone owes, when they die it is repaid before anything can be given to the heirs of the deceased. But with federal student loans, those loans are forgiven upon the death of the borrower. This means that the borrower’s family does not have to worry about repaying the student loans, nor is the balance taken from the estate of the deceased.
- Permanent Disability: If you become permanently and totally disabled, your student loans can be discharged as well. The process to have them discharged is quite cumbersome but it is another good point to federal student loans.
(6) Other Student Loan Forgiveness Options
There are several other student loan forgiveness options out there. A lot of them are with specific employers. Also, a lot of them have to do with working in a rural area and/or an area that is underserved.
My friend at The College Investor has put together a pretty expansive list of several of the other different student loan forgiveness options. Check it out here.
Final Thoughts
If you have made it this far in this article I’m sure that you can see that I am pretty skeptical about ANY student loan forgiveness program.
Just like I have said several times in this article (and others), the only one that you can count on to get rid of your student loans is you. If you get forgiveness somewhere along the line, then awesome! But you cannot depend on a student loan forgiveness program to pay off your student loans. You can only depend on you.
You are strong. Wwork hard. You are the hero of your story.
You. Can. Do. It.
Get. It. Done.
Until next time!
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