How to Apply for Student Loans Forgiveness (2023)

The Biden administration’s recent move to forgive $39 billion in federal student loans has given a sigh of relief to over 800,000 borrowers. This news came hot on the heels of the Supreme Court striking down a separate debt relief plan, which had promised to forgive up to $20,000 for nearly all Pell Grant recipients and $10,000 for those who met certain income requirements.

If these whirlwind announcements of student loan forgiveness programs — especially as the pandemic-related payment pause is about to end — have your head spinning, know this — you’re not alone.

You’re part of a vast group of Americans burdened with federal student loan debt who are all looking for a way out.

In the past year alone, my team and I have successfully helped hundreds of borrowers towards complete balance forgiveness under the Public Service Loan Forgiveness Program. Moreover, we’ve positioned hundreds more to qualify for cancellation under the forthcoming Income-Driven Repayment Plan Waiver and payment count adjustment, set to take effect this August.

Ahead, you’ll find a comprehensive guide on the various programs offered by the U.S. Department of Education to all its borrowers. Yes, this includes those with Parent PLUS Loans and others with privately held Federal Family Education Loans and Federal Perkins Loans.

Related: How to Apply for Parent PLUS Loan Forgiveness

Student loan forgiveness can essentially be seen as a supportive gesture by the federal government. It’s constructed for borrowers actively shaping our future, whether that’s through work in nonprofit sectors, teaching in underserved schools, navigating life with a severe disability, or having unfortunately attended a deceptive for-profit school.

You might be questioning: Do my loans qualify for this forgiveness?

The good news is that nearly all types of federal student loans can benefit from this, under one program or another, even defaulted loans. But before certain loans can be considered, they must be consolidated into a Direct Consolidation Loan. We’ll get into that shortly.

But let’s address the not-so-good news.

The discussions you hear about student loan debt forgiveness from the White House typically apply only to federal student loan borrowers.

Private lenders like Discover, Sallie Mae, and SoFi, are, in reality, less altruistic.

Related: How to Get Sallie Mae Loans Forgiven

With a keen eye on profit margins, they’re less inclined to forgive private student loans, a stark reality for those struggling with substantial loan amounts and high-interest rates.

Having said that, you might still find student loan repayment assistance for both federal and private student loans through your state, a private organization, or even your employer.

Related: How to Get Private Student Loans Forgiven

Before we venture further into the complexities of student loan forgiveness, let’s highlight some of the general qualifications you’ll need to meet.

In most cases, forgiveness programs stipulate that you must be working in a specific profession, make a set number of qualifying payments, and hold federal student loans.

Here’s an overview of some of the more popular forgiveness programs:

Income-Driven Repayment Forgiveness (IDR): For those on IDR plans, the magic number for forgiveness generally hits at 20 or 25 years of qualifying payments. This timeline can vary depending on when your loans were disbursed, the type of loan, and the specific plan. As an example of how real this program is, on July 14, the Education Department notified over 800 thousand individuals that their loans would be forgiven under the income-based repayment forgiveness program as part of a waiver they received, irrespective of whether they had made qualifying monthly payments.

Public Service Loan Forgiveness (PSLF): For the PSLF Program, you’re required to work full-time at a qualifying organization, such as government agencies or 501(c)(3) not-for-profits, and make 120 qualifying student loan payments under an IDR plan toward a Federal Direct Loan. To make this process easier, you can use the PSLF Help Tool on the Federal Student Aid website, StudentAid.gov. This tool will generate the Employment Certification Form that you need to provide to each qualifying employer you’ve worked for since Oct. 1, 2007.

Teacher Loan Forgiveness: Teachers, your dedication and time spent nurturing our future generations could qualify you for Teacher Loan Forgiveness. Five consecutive years of full-time teaching in a low-income school or educational service agency might be your pathway to loan forgiveness. Teachers can apply for this program in addition to the PSLF Program.

Total and Permanent Disability Discharge (TPD): If you’re permanently disabled and unable to engage in substantial gainful activity because of a physical or mental impairment, you may be eligible for a TPD discharge. This allows for the discharge of federal student loans or the Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation.

Borrower Defense to Repayment: If your school misled you or engaged in other misconduct in violation of certain state laws, you may be eligible for forgiveness through the Borrower Defense to Repayment program. This applies to both federal student loans and TEACH Grant service obligations.

Related: Do I Qualify for the Navient Lawsuit?

Wondering how to maximize your chances of debt cancellation for your loans? Here are some strategies:

1. Verify your loan type: Only federal student loans are eligible for forgiveness. Most Direct Loans qualify for forgiveness programs without the need for consolidation, but some FFEL Loans need to be consolidated to meet many of the eligibility requirements. Double-check that yours qualify for the program you’re eyeing. Related: FFELP Loan Forgiveness

2. Confirm your job meets the requirements: Some programs are profession-specific. Make sure your job fits the bill.

3. Stay on top of your payments: Forgiveness hinges on making a certain number of qualifying payments. Keep track of your payment history and ensure you’re on a qualifying repayment plan.

4. Know the rules: Keep abreast of the eligibility criteria and application process for your chosen forgiveness program. Knowledge is power, and in this case, it could mean less debt.

5. Keep your student loan servicer in the loop: Any changes in your employment, income, or family size could affect your eligibility. Keep your loan servicer informed to avoid any hiccups in your forgiveness journey.

Related: Can I Still Apply for Student Loan Forgiveness?

Applying for loan forgiveness might seem like navigating a maze, but let’s simplify it into six achievable steps:

1. Familiarize Yourself With Your Loans: The first step is to understand if your federal student loans are eligible for forgiveness programs, such as Public Service Loan Forgiveness, Teacher Loan Forgiveness, or Income-Driven Repayment forgiveness.

2. Find Your Fit: Each forgiveness program has its specific set of prerequisites. It’s important to ensure you meet the eligibility criteria, which may involve serving in public service or completing a designated number of payments.

3. Initiate Your Application: Feeling ready to apply? Visit the FSA website and adhere to the guidance provided for your chosen forgiveness program. For those opting for PSLF, you’ll need to submit the PSLF & Temporary Expanded PSLF (TEPSLF) Certification & Application to your loan servicer. Do remember that some programs, like income-based repayment forgiveness, don’t require a separate student loan forgiveness application. Your servicer will inform you once you’ve achieved your forgiveness milestone.

4. Submit Your Documentation: Depending on the forgiveness program you opt for, you may need to submit additional documents like employment certification or evidence of qualifying payments.

5. Patience is a Virtue: After submitting your application, it will be reviewed by either your loan servicer or the Education Department. This may take several weeks, so keep your cool. Remember, patience is the key!

6. Monitor Your Loans: In the meantime, keep a watchful eye on your loan status and stay abreast of any correspondence from your loan servicer or the Department of Education.

Did Your Loan Forgiveness Application Make the Cut?

After you’ve hit ‘submit’ on your application, you should get an email confirmation from the Department of Education or your loan servicer. Your application will then enter processing, which could take about four to six weeks. When the verdict’s in, your loan servicer will let you know and guide you through any next steps.

Got questions or concerns about your application status? Don’t hesitate to contact your loan servicer or the Department of Education. And remember, hold onto any confirmations or other documentation related to your application. They might come in handy later on.

Getting your student loans forgiven usually requires active participation on your part. More often than not, you will need to apply for the forgiveness programs yourself, meeting specific eligibility criteria along the way.

But there are instances where loan forgiveness is automatically granted, such as the Biden-Harris administration’s one-time student loan debt relief initiative, which brought about automatic forgiveness for over 804,000 borrowers.

How Does Loan Forgiveness Work?

Upon successful student loan forgiveness, your remaining balance is eliminated. You’re absolved from any further payments on that amount, and your loan account reflects this adjustment. During the processing of your discharge, loan repayments may even be temporarily paused.

Your loan servicer or the Department of Education will notify you once your debt has been cleared. It’s crucial to stay informed about all communications regarding your student loans and keep records of the entire forgiveness process, as you may need these documents in the future.

Let’s talk taxes.

If you’re breathing a sigh of relief because you’ve heard that student loan forgiveness is tax-free at the federal level, hold on just a minute.

That’s true, thanks to the American Rescue Plan enacted by President Joe Biden in March 2021.

But, as always, there’s a “but.”

Some states still count student loan cancellation as taxable income. So, make sure you get familiar with your state’s tax laws about student loan forgiveness. You don’t want any surprise tax bills creeping up on you!

Here’s the thing: if you stop paying your federal student loan for over 270 days, you’re considered in default. And you do not want that label.

Why?

Well, the entire unpaid loan balance, along with any interest, suddenly becomes due.

Your wages could be garnished without any court orders.

You may lose access to federal financial aid, and your credit score may take a nose dive. And, most importantly, you’ll be locked out of nearly all student loan forgiveness opportunities.

So, it’s a bit of a pickle you want to avoid if possible.

Related: Will Defaulted Student Loans Be Forgiven?

Recent rulings by the U.S. Supreme Court have thrown a wrench into President Biden’s student loan forgiveness plan. The Court has, in two separate cases, ruled that the administration went beyond its authority.

In the first case, six Republican-led states—Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina—took center stage. They argued that Biden’s plan stepped over the line of his presidential power and would cause them to lose tax revenue and adversely impact state-run student loan services. The Supreme Court, with a 6-3 vote, sided with the six states.

The second case was a bit different, with two students from Texas, Myra Brown and Alexander Taylor, at the helm. They argued that the federal government dropped the ball by not providing a public comment period for expressing objections. However, the court, in a unanimous decision, determined that Brown and Taylor lacked the legal standing to file a lawsuit, resulting in their case being dismissed.

Now, you might be wondering about challenges to the most recent forgiveness under the IDR Waiver. Could there be obstacles ahead? Possibly. But don’t let that keep you up at night. This round of forgiveness stands on much firmer legal ground than the president’s attempt to eradicate billions of debt with a mere signature.