There are no federal student loan forgiveness programs specifically for senior citizens. Retirees are eligible for the same loan forgiveness programs as other borrowers.
The three primary programs that help elderly borrowers get rid of student loans are:
Public Service Loan Forgiveness (PSLF)
Income-Driven Repayment plan forgiveness
Total and Permanent Disability Discharge
1. Public Service Loan Forgiveness Program
The PSLF Program offers borrowers a generous incentive to work in vital but often low-paying government and nonprofit jobs: work full-time for 10 years, and your federal student loan balance will be erased.
To qualify for the program, in addition to full-time work, borrowers must:
work for the local, state, tribal, or federal government or qualified nonprofit (e.g., 501(c)(3))
have Direct Loans (loans made under the Federal Family Education Loan Program and Perkins Loan Program aren’t eligible unless they’re consolidated into a Direct Consolidation Loan
make 120 on-time payments under the 10-Year Standard Repayment Plan or a payment plan based on your income
Two things to note about this program:
First, Parent PLUS Loan borrowers qualify for PSLF if they — not their child — work in public service.
Second, you must still be working in public service when you apply for forgiveness. You’re ineligible if you worked in public service for decades but have since retired.
Learn More: How to Qualify for Public Service Loan Forgiveness
PSLF TEMPORARY CHANGES
In October 2021, the Department introduced a sweeping set of temporary fixes to the PSLF Program to bring an estimated half a million public servants closer to forgiveness. But eligibility hurdles remain for many borrowers seeking help.
To get credit for ineligible payments: submit a PSLF Employment Certification Form.
If you still have FFEL or Perkins Loans: apply for a Direct Consolidation Loan and submit a PSLF Employment Certification form for each qualifying employer you’ve worked for since October 1, 2007. Borrowers with Parent PLUS Loans can receive credit under the waiver in limited circumstances.
If you retired from public service without getting your loans forgiven, the waiver could help you get closer to having your debt wiped away.
You have until October 31, 2022, to apply for the waiver. You can apply for free at the Federal Student Aid website, studentaid.gov.
2. IDR Plan Forgiveness
Income-driven repayment plans allow borrowers to make student loan payments based on their discretionary income. After 20 years — sometimes 25 — the remaining balance is forgiven.
While forgiveness is distant, these plans allow many retirees and seniors living on a fixed income to have an affordable payment. Plus, if your taxable income decreases, your payment amount decreases. Borrowers with low income can even qualify for a $0 payment amount. So there should be no reason for you to default and have to deal with wage garnishment or having your Social Security benefits offset.
There are four different plans to choose from, each with slightly different rules:
Income-Based Repayment Plan (IBR) – best for married borrowers or borrowers with FFEL/Stafford Loans.
Income-Contingent Repayment Plan (ICR) – best for borrowers with Parent PLUS Loans.
Revised Pay As You Earn Plan (REPAYE) – best for borrowers with Direct Loans. (including Grad PLUS Loans) and no Parent PLUS Loans.
Pay As You Earn Plan (PAYE) – virtually no seniors qualify for this plan.
There are two consequences to these plans:
You have to apply every year. Every 12 months, you’ll need to complete an annual recertification of your income and family size and submit it to your loan servicer.
You may owe taxes. The IRS will treat that amount as taxable income when your remaining balance is forgiven after 20 to 25 years of payments. However, if you can prove you’re insolvent — that is, your total liabilities exceed the value of your assets — you may be able to ease the tax burden.
3. Total and Permanent Disability Discharge
Borrowers who can no longer work due to physical or mental impairment can qualify for a total and permanent disability discharge. Many elderly borrowers meet the qualifications for a TPD Discharge, but few apply. To qualify, a medical professional (e.g., your primary care physician or specialist), the SSA, or VA must certify that your impairment prevents you from performing a substantial gainful activity.
You can apply for free at disabilitydischarge.com.
Typically, borrowers must provide proof of their annual earnings for three years after discharge. If your annual earnings exceed state poverty guidelines for a family of two (regardless of actual family size) during this monitoring period, the Department can reinstate your loans.
However, the Department of Education temporarily eliminated this rule during the COVID-19 emergency, with plans to eliminate the monitoring period indefinitely.