San Diego Financial Literacy Center

Student Loan Forgiveness

This post was originally written by Sandra Vuong and posted on the Department of Education blog. You can view the original post here.

Here’s a question a lot of people may be wondering… Is it really possible to have my federal student loans forgiven or to get help repaying them?

The answer is: Yes! However, there are very specific eligibility requirements for each situation in which you can apply for loan forgiveness or receive help with repayment. Loan forgiveness means that you don’t have to pay back some or all of your loan. You never know what you may be eligible for, so take a look at the options we have listed below. The first three options focus on loan forgiveness programs. The next two options are government programs based on your service.

1. Teacher Loan Forgiveness – If you teach full-time for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families, and meet other qualifications, you may be eligible for forgiveness of up to a combined total of $17,500 on certain federal student loans. 

2. Public Service Loan Forgiveness (PSLF) – If you work full-time for a government or not-for-profit organization, you may qualify for forgiveness of the entire remaining balance of your Direct Loans after you’ve made 120 qualifying payments – that is, ten years of payments. To benefit from PSLF, you should repay your federal student loans under an income-driven repayment plan.

3. Income-Driven Repayment (IDR) Plan – If you repay your loans under an income-driven repayment plan, the remaining balance on your student loans will be forgiven after you make a certain number of payments. You will likely qualify for an income-driven repayment plan if your outstanding federal student loan debt is higher than your annual income or if it represents a significant portion of your annual income. 

4. Military Service – In acknowledgement of your service to our country, there are special benefits and repayment options for your student loans available from the U.S. Department of Education and the U.S. Department of Defense, such as interest rate caps under the Servicemembers Civil Relief Act, other interest rate relief, and student loan repayment programs. 

5. AmeriCorps – The Segal AmeriCorps Education Award is a post-service benefit received by participants who complete a term of national service in an approved AmeriCorps program – AmeriCorps VISTA, AmeriCorps NCCC, or AmeriCorps State and National. Upon successful completion of the service, members are eligible to receive a Segal AmeriCorps Education Award, which can be used to repay qualified student loans.

If the options listed above don’t apply to you, but you need help making your federal student loan payments, contact your loan servicer about the option to:

1. Switch your repayment plan to lower your monthly payments;

2. Consolidate multiple federal student loan into one loan, which may result in a lower monthly payment, or

3. Apply for deferment or forbearance to temporarily postpone or reduce your payments.

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