Can Unsubsidized Loans Be Forgiven? Yes

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Updated on June 23, 2024

Quick Facts

  • Unsubsidized federal student loans are eligible for forgiveness, cancellation, or discharge through programs like Public Service Loan Forgiveness and Income-Driven Repayment plans.

  • The IDR Account Adjustment, available until June 30, 2024, offers borrowers a one-time opportunity to receive credit toward forgiveness for past periods of repayment, forbearance, and deferment.

  • Private unsubsidized loans are not eligible for federal forgiveness programs, but borrowers may explore refinancing or negotiation with their lenders for better terms.

Can Unsubsidized Loans Be Forgiven?

Unsubsidized federal student loans, including Stafford Loans, can indeed be forgiven. But private student loans aren’t eligible for the federal debt relief programs implemented by President Joe Biden, especially after the Supreme Court struck down his initial broad forgiveness plan. The student loan forgiveness landscape has evolved significantly, with new opportunities emerging for federal loan borrowers.

These forgiveness programs aren’t automatic – borrowers must meet specific criteria and often make years of qualifying payments. Options include the Public Service Loan Forgiveness Program and Income-Driven Repayment plans, which can reduce or eliminate your loan balance after a set period.

Whether you’re a recent graduate or have been repaying for years, understanding your forgiveness options for unsubsidized loans in the Direct Loan program can save you thousands of dollars. Ahead, learn how these federal student loan forgiveness programs work and determine your eligibility.

Related: Biden Student Loan Forgiveness Plan

IDR Account Adjustment

What it is: The IDR Account Adjustment is a one-time opportunity created by the Biden administration to give borrowers credit toward forgiveness for past periods of repayment, forbearance, and deferment. Income-driven repayment plans, which include unsubsidized loans, offer loan forgiveness after 20 or 25 years of qualifying payments.

How it works: Under IDR plans, your student loan payments are calculated based on your income and family size, typically 10-20% of your discretionary income. After making payments for 20 or 25 years (depending on the plan), any remaining loan balance is forgiven. The IDR Account Adjustment can significantly accelerate this timeline for many borrowers by providing credit for past periods.

Who qualifies: Student loan borrowers with Direct Loans, including unsubsidized loans, FFEL loans, or Perkins Loans held by the U.S. Department of Education. Borrowers with commercially-held federal student loans must consolidate into a Direct Consolidation Loan to qualify.

How to apply: Contact your loan servicer or visit the Federal Student Aid website. Submit any necessary paperwork, such as an IDR plan application or Direct Consolidation Loan application, before the deadline. You’ll need to recertify your income and family size annually to remain on the plan.

Deadline: June 30, 2024.

Public Service Loan Forgiveness

What it is: The PSLF Program forgives the remaining balance on your Direct Loans after you make 120 qualifying monthly payments while working full-time for a government or non-profit organization, or other qualifying employer.

How it works: After making 120 qualifying payments while working for an eligible employer, the remaining balance on your Direct Loans will be forgiven. The IDR Account Adjustment can help you get closer to this goal by providing credit for past periods of repayment, forbearance, and deferment.

Who qualifies: To be eligible, you must:

  • Work full-time for a government organization or a non-profit

  • Have Direct Loans (or consolidate other federal student loans into a Direct Consolidation Loan)

  • Make 120 qualifying payments on an income-driven repayment plan or the 10-year Standard Repayment Plan

How to apply: Use the PSLF Help Tool on Submit the PSLF Form and Employment Certification Form annually or when you change employers to certify your employment and payments.

Deadline: PSLF is an ongoing program with no set end date. But to benefit from the IDR Account Adjustment for PSLF, apply before June 30, 2024.

Related: Are Parent PLUS Loans Eligible for PSLF?


What it is: The SAVE Plan is the newest income-driven repayment plan that calculates your monthly payment based on your income and family size, with unique benefits that lower payments for many borrowers.

How it works:

  • Your monthly payment is based on a smaller portion of your adjusted gross income (AGI) compared to other IDR plans.

  • The federal government covers unpaid monthly interest, preventing your balance from growing if you make your full payment.

  • Starting July 2024, payments on undergraduate loans will be reduced from 10% to 5% of income above 225% of the poverty line.

Who qualifies: Borrowers with eligible student loans, including Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans made to graduate or professional students, and certain Direct Consolidation Loans.

How to apply: Use the IDR application on the Federal Student Aid website to apply for the SAVE Plan. If you were on the REPAYE Plan, you’ve been automatically enrolled in the SAVE Plan.

Deadline: The SAVE Plan is an ongoing program with no set end date. But some benefits are being phased in, with full implementation expected by July 2024.

Related: Is the SAVE Plan Worth It?

Other Forgiveness Options and Private Loans

While the IDR Account Adjustment, PSLF, and SAVE Plan are currently the most prominent forgiveness options, other programs exist for specific situations.

These include Teacher Loan Forgiveness, which offers up to $17,500 in forgiveness for teachers working in low-income schools, and Total and Permanent Disability Discharge for borrowers who are unable to work due to disability.

Remember, these forgiveness options only apply to federal student loans. Private unsubsidized loans, which are offered by banks, credit unions, and other private lenders, are not eligible for federal forgiveness programs. If you have private unsubsidized loans, your options for relief are more limited.

For private loans, you might consider:

  1. Refinancing: If your credit score has improved since you took out the loan, you might qualify for a lower interest rate.

  2. Negotiating with your lender: Some lenders offer hardship programs or alternative repayment plans if you’re struggling to make payments.

  3. Debt consolidation: Combining multiple private loans into one could simplify your payments and potentially lower your interest rate.

While these aren’t forgiveness options, they can help make your private unsubsidized loans more manageable. Always carefully consider the terms before refinancing or consolidating, as you may lose certain borrower protections.

Related: Can Private Student Loans Be Forgiven?

Bottom Line

Unsubsidized federal student loans can indeed be forgiven through various programs, with the IDR Account Adjustment, PSLF, and SAVE Plan offering significant opportunities for borrowers. These programs can potentially save you thousands of dollars and years of repayment.

But each option has specific eligibility criteria and application processes.

For private unsubsidized loans, while federal forgiveness isn’t available, options like refinancing or negotiating with your lender may help. Managing your student debt effectively requires understanding your loans and exploring all available options.

Don’t navigate these complex options alone. Our student loan experts can provide personalized guidance based on your specific situation. Book a 1:1 consultation today to explore your best path forward and take control of your student loan debt.

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Can Unsubsidized Student Loans Be Forgiven?

Yes, federal unsubsidized student loans can be forgiven through various programs. These include Public Service Loan Forgiveness, Income-Driven Repayment plan forgiveness, and the SAVE Plan. Each program has specific eligibility criteria and requirements. However, private unsubsidized loans are not eligible for these federal forgiveness programs.

Do Students Have to Payback Unsubsidized Loans?

Yes, students typically must repay unsubsidized loans. Unlike subsidized loans, interest starts accruing on unsubsidized loans immediately after disbursement, even while you're in school. After graduation, you're responsible for repaying both the principal and all accrued interest. However, various repayment plans and forgiveness programs can make repayment more manageable.

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