Student loan borrowers are carrying incredible amounts from trying to get a higher education. While it's great that the U.S. Department of Education offers deferment, forbearance, and flexible repayment options, depending on your interest rate, your loan balance could double in a short time. Faced with that reality, it's natural to wonder when do student loans go away?
Thankfully, the federal government has established various programs that offer debt relief in loan forgiveness, loan cancellation, and discharge. Keep reading to learn when your student loans will go away.
Do student loans go away after 7 years?
Student loans don't go away after 7 years. There is no program for loan forgiveness or loan cancellation after 7 years. However, if it's been more than 7.5 years since you made a payment on your student loan debt and you default, the debt and the missed payments can be removed from your credit report. If that happens, your credit score may go up, which is a good thing. But you'll remain responsible for paying back your loans.
Do student loans go away after 10 years?
Student loans can go away after 10 years if you work full-time in the public service and qualify for the Public Service Loan Forgiveness Program. To qualify, you'll need to make several payments on Direct Loans under an income-driven repayment plan. If you have loans made under the Federal Family Education Loan Program (FFEL) or the Perkins Loan Program, you'll need to apply for Direct Loan Consolidation.
Check the Federal Student Aid website to see what type of loans you have.
While the PSLF Program will forgive your federal student loans after 10 years, there are no student loan forgiveness programs for private student loans after 10 years. You're stuck with them until you pay them off, negotiate a settlement, or the statute of limitations runs out (more on that below).
Do student loans go away after 20/25 years?
Federal student loans go away after 20 to 25 years of payments under an income-driven repayment plan. Borrowers qualify for loan forgiveness after they make 240 to 300 monthly payments under the:
- Revised Pay As You Earn Plan
- Pay As You Earn Plan
- Income-Based Repayment Plan
- Income-Contingent Repayment Plan
Borrowers who did not attend graduate school can have their loans forgiven after 20 years. Borrowers who borrowed federal loans for graduate school are eligible for loan forgiveness after making 300 monthly payments.
Do student loans ever go away?
Federal student loans will go away:
- after 10 years under the PSLF Program
- after 20/25 years of student loan payment under an income-driven repayment plan (e.g., IBR)
- when you die or a parent dies (Parent Plus Loans)
- for a disability discharge when you have a 100% permanent disability
- for borrowers who qualify for loan discharge programs like a Closed School Discharge or Borrower Defense to Repayment
- for educators who qualify for Teacher Loan Forgiveness
Federal student loans do not have a statute of limitations. Unless President Biden or Congress forgives federal student loans, you may end up paying your loans even after you retire and start drawing Social Security Benefits.
Likewise, there's no loan forgiveness simply because you have a low income. However, you can try filing student loan bankruptcy and proving undue hardship.
Private student loans will go away:
- when you die
- if you meet the eligibility requirements for a disability discharge
- if you get a discharge in bankruptcy
- when the statute of limitations runs out
Note: If you have a cosigner, your cosigner will still have to pay back the loans even if you die, become disabled, or get a bankruptcy discharge. So consider getting a cosigner release before you pursue a discharge.
How long before a student loan is written off? While the UK writes off student loans after 30 years, the same isn't true in the United States. Here, the U.S. Department of Education doesn't write off student loans automatically after a set number of years. And since there's no statute of limitations for federal loans, you can end up paying those debts until you die.
Do student loans fall off your credit report?
Both federal and private student loans fall off your credit report about 7.5 years after your last payment or date of default.
You default after 9 months of nonpayment for federal student loans, and you're not in a deferment or forbearance. So you'll have the negative information for those 9 months plus 7.5 years of negative information before the loans fall off your credit report.
Private student loans usually default or are charged off around 120-180 days of nonpayment. Once that status appears on your credit report, it will be another 7.5 years before the loans are removed.
- How long do student loans stay on your credit? Student loans will stay on your credit report until you pay them off, or they're removed 7.5 years after you default. If you're trying to buy a home, but your student loans are killing your credit score, you can try to get the loans removed because the loan servicer or collection agency reports inaccurate information.
- How long do defaulted student loans stay on credit reports? Defaulted student loans will stay on your credit report 7.5 years after you the default status was entered on your credit report.
- What does it mean if my student loan is closed on my credit report? Your student loan can show closed on your credit report if you paid it in full, negotiated a settlement, refinancing with a private lender, or consolidated them into a Direct Consolidation Loan.
Need a plan if student loans don't go away?
While Congress has placed most federal student loans into forbearance and suspended collection activities like tax refund offset throughout the coronavirus pandemic, they still haven't forgiven most federal student loans. Most borrowers' student loan debt will never go away — at least not for 20 to 25 years.
Schedule a free call where we can evaluate your student loan repayment options. With the right strategy, you can achieve your financial goals even if your student loans never go away.