VA Student Loan Forgiveness for Employees

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Stanley Tate

#1 Student Loan Lawyer

Updated on October 6, 2022

‍Employees of the Veterans Administration are eligible for several federal student loan forgiveness programs offered by the Education Department, but the most common are the Public Service Loan Forgiveness Program and income-driven repayment forgiveness. The VA also has its own loan repayment programs that allow employees to get up to $200 thousand in student debt reduction.

Ahead, learn more about VA student loan forgiveness programs.

Public Service Loan Forgiveness

Best for: Full-time VA employees, including Veterans Health Administration employees.

All VA employees qualify for the Public Service Loan Forgiveness Program, which promises to write off your remaining balance tax-free after 10 years of work. The Department of Veterans Affairs is a government agency, which makes it a qualifying employer for PSLF.

You’ll need to make 120 qualifying payments under an income-driven repayment plan to qualify. If you have Federal Perkins Loans or commercially held Federal Family Education Loans — i.e., federal loans you had to keep paying during the pandemic — you’ll need to consolidate those loans into a Direct Consolidation Loan and then apply for the PSLF Program. Note: You can consolidate even if your only loan is an FFEL Consolidation Loan. Read more about how many times you can consolidate student loans.

You’ll want to consolidate the loans by Oct. 31, 2022. If you do, you‘ll get credit towards forgiveness for the monthly payments you made before you consolidated. Read more about the PSLF Waiver.

Learn More: PSLF Changes

Income-Driven Repayment Forgiveness

Best for: Federal employees who have been paying student loan debt for 20+ years but haven’t worked in public service for a decade.

The U.S. Department of Education writes off federal loans after 20+ years of monthly payments in one of its income-based repayment options. Income-driven repayment forgiveness doesn’t hinge on your employment with the VA or other government agencies. All that matters is that you have federal loans and pay the loans back under the IBR, ICR, PAYE, or REPAYE plan.

If you’ve been in repayment for a long time but haven’t always been in an IDR plan, you can still qualify for relief. Earlier this year, the Education Department announced it would make a one-time account adjustment to give borrowers credit towards IDR forgiveness for payments they made under any repayment plan. It also said it would increase the payment counts for borrowers who were improperly steered into forbearances by their loan servicers. Read more about relief for forbearance steering.

The department plans to complete the IDR account adjustment by the end of the year. If you have commercially held FFEL Loans, you’ll need to consolidate before Jan. 1, 2023, to receive this benefit.

Learn More: When Do Student Loans Go Away?

Education Debt Reduction Program

Best for: Physicians, nurses, social workers, and other healthcare professionals at VA Hospital with federal or private student loans, including refinanced loans.

The Education Debt Reduction Program is a recruitment and retention benefit the VA offers to entice health professionals to work in positions delivering direct-patient care. EDRP isn’t a forgiveness program. Instead, it reimburses employees for payments made towards qualifying loans.*

PSLF and EDRP can work in tandem. The payments you make on your Direct Loans while working for the federal government will qualify for PSLF, and EDRP will reimburse you for those payments.

The reimbursement is capped at $200 thousand over a five-year period ($40 thousand annually). The funds are tax-free and don’t require a mandatory service agreement. You can leave the VA before your five years are up and not have to pay back the funds you received.

The first step in qualifying for EDRP is to find a job offering it as a benefit. Visit VAcareers.va.gov or USAJobs.gov and search for EDRP-eligible jobs.

Learn More: Find EDRP VA Positions

* According to VHA Handbook 1021.01A, a qualifying loan is any government or commercial loan made for educational purposes by schools. Generally, the loans can’t be greater than the borrower’s cost of attendance.

VA Student Loan Repayment Program

Best for: VA employees with private student loan debt and those working towards PSLF.

Employees at the VA can also get up to $10 thousand ($60 thousand lifetime maximum) each year to repay their student debt. Unlike the EDRP Program, the VA Student Loan Repayment Program isn’t a reimbursement program; it’s a loan repayment assistance program that will make your student loan payments to your lender either annually or bi-weekly.

SLRP is available to all full-time and part-time employees regardless of their degree or if they work in public health. Ask your recruiter early in the job application process about eligibility requirements.

Learn More: OPM Student Loan Repayment Programs

Other Forgiveness and Discharge Programs

The Education Department also offers other loan cancellation opportunities you may qualify for, depending on your situation.

  • Total and Permanent Disability Discharge. A TPD discharge writes off your debt if a permanent physical or mental disability prevents you from working. To qualify, you’ll need to submit proof of a disability determination from your doctor or the Social Security Administration. Disabled veterans rarely need to apply for relief. The Education Department will use a data match tool with the VA to find eligible service members and discharge their remaining loan balance. Visit disabilitydischarge.com for more information.

  • Borrower Defense to Repayment. Federal student loan borrowers can get debt relief if their schools defrauded them through borrower defense. In the past year, the Biden administration has helped hundreds of thousands of borrowers escape billions in federal debt they were saddled with after attending scam, for-profit schools, many of which have shuttered their doors.

There are also other forgiveness programs available to former military service members. Read more about military student loan forgiveness.

Work at the VA and need loan forgiveness? Let’s talk.

To go over your options, schedule a phone call with me. I am a student loan lawyer with years of experience helping people deal with their loans so they can achieve their personal goals: start a family, buy a house, retire, and so on.

UP NEXT: Who Do You Contact If You Have Questions About Repayment Plans?

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