Who Qualifies for Student Loan Forgiveness

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Stanley tate

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Since President Joe Biden took office, the White House has ushered in several changes to existing student loan forgiveness programs. Those changes have led to the U.S. Department of Education wiping out nearly $20 billion in loans for tens of thousands of borrowers.

As student loan borrowers’ budgets have tightened due to the lingering effects of the pandemic and rising inflation, the Biden administration continues to grapple with student debt to try to deliver equitable relief. Whether that ultimately includes blanket loan cancellation is not yet known. What we do know is that the fixes already introduced are working.

Keep reading to learn if your student loan is eligible for loan forgiveness.

Who qualifies for student loan forgiveness

Student loan forgiveness might seem too good to be true, but there are legitimate ways to get it through free government programs.

The options below are available only to borrowers with federal student loans. Some programs have precise and narrow requirements that make it difficult to qualify, but income-driven repayment plan forgiveness is open to most borrowers.

Here’s who qualifies for loan forgiveness.

Full-time public servants

Last October, the Education Department announced it would temporarily expand the Public Service Loan Forgiveness (PSLF) Program to allow more borrowers to qualify for relief. Before the expansion, borrowers had to make 120 qualifying payments towards a Direct Loan while working full-time for the government (including military service) or a nonprofit organization. Few people met those requirements. As a result, thousands of public servants were locked out of the PSLF program.

The Limited PSLF Waiver relaxes the program’s eligibility requirements, unlocking it for thousands of borrowers.

Through Oct. 31, 2022, the department will give you credit for previous payments made towards your student loans, regardless of the type of loan you have and whether the payment was made under a qualifying repayment plan (i.e., an income-driven repayment plan).

To qualify, you need to have Direct Loans and submit an employment certification form for every qualifying employer you have worked for since the PSLF program started in Oct. 2007. You can check whether your employer qualifies using the PSLF Help Tool on studentaid.gov.

People who have paid their loans for years

The federal government promised borrowers it would write off their loan balance after repaying under an income-based repayment program for 20 or 25 years. But few people received debt relief under those plans. An NPR investigation found that the program was badly mismanaged by the Education Department and student loan servicers when they failed to record qualifying payments and directed borrowers toward inappropriate forbearances. 

In April, the department announced it would review the accounts of millions of borrowers to give them credit toward income-driven repayment plan forgiveness for any month they made a payment — no matter if they were enrolled in an IDR plan or even made a monthly payment. It will also give borrowers credit for time spent in:

  • forbearances that lasted over 12 straight months or 36 or more months cumulatively.*
  • deferment (except for in-school deferment) before 2013.

*The forbearance credit also applies to PSLF forgiveness.

Most borrowers don’t need to apply to receive this benefit. The department has begun implementing these changes and will update your account by the end of the year.

If you had to pay your student loans during the pandemic, you must consolidate your FFEL loans into a Direct Consolidation Loan before getting this forgiveness credit. The deadline to consolidate is Jan. 1, 2023.

Learn More: Parent PLUS Loan Repayment Options

People defrauded by sham schools

Borrower Defense to Repayment grants loan discharges to borrowers who were defrauded by their colleges. The government began using this program at the end of President Barack Obama’s time in office to help students who attended Corinthian Colleges.

Relief was scarce over the next four years. Betsy DeVos, President Donald Trump’s education secretary, repeatedly stymied investigations into for-profit schools.

That changed once President Joe Biden took office. Since 2020, the Education Department has approved borrower defense claims and discharged $2.1 billion in student loan debt for over 132 thousand borrowers.

Visit studentaid.gov to apply.

Permanently disabled borrowers

Total and permanent disability discharge erases the debt for borrowers who can no longer work due to a physical or mental impairment. There are three ways to prove your health issues prevent you from working:

  • Your doctor completes the TPD discharge form.
  • The Social Security Administration determines you’re 100% disabled, and your next medical review is within 5 to 7 years from your most recent SSA disability determination.
  • The Department of Veterans Affairs reflects a service-connected disability is 100% disabling or that you are totally disabled based on an individual unemployability rating.

The Education Department has discharged $7.8 billion in debt for over 400 thousand permanently disabled borrowers in the past two years.

If your disability is on file with the SSA or VA, your loans will automatically be discharged through a data match. But if it isn’t, you must apply for a disability discharge of your student loans.

Visit disabilitydischarge.com to apply.

Learn More: What Disabilities Qualify for Student Loan Forgiveness?

Other forgiveness programs

There are other ways to have your remaining balance wiped out under different programs, including:

1. the Teacher Loan Forgiveness Program

2. Closed School Discharge

3. Frontline Healthcare Worker Forgiveness

4. Federal Perkins Loan Cancellation

Visit the Federal Student Aid website, studentaid.gov, for more information.

Learn More: Miguel Cardona & Student Loans

Who isn’t eligible for loan forgiveness

Despite the White House's tremendous strides to improve existing student loan forgiveness programs, the relief won’t help borrowers with Joint Spousal Consolidation Loans or private student loans.

They don’t qualify for the recent enhancements because federal law limits that relief to loans held by the Education Department. There’s no way to consolidate or refinance those loans so that the department owns them.

If you’re struggling with those types of loans, your only option to get rid of the loans without paying them back in full would be to file a student loan bankruptcy case. But proving undue hardship is challenging even if you’ve been struggling to pay your loans for years.

Note: Many student loan borrowers mistakenly believe they have private loans because they had to keep making payments during the pandemic. When I look at their loans, I usually find that the loans they believed were private are federal student loans made under the Federal Family Education Loan Program.

A large chunk of FFEL loans didn’t qualify for the Covid-19 forbearance because they’re owned by private lenders like Ascendium, ECMC, and Trellis. But if you consolidate the loans into a Direct Consolidation Loan, you’ll qualify for the forbearance and benefit from improvements made to the forgiveness programs.

UP NEXT: Private Student Loan Forgiveness Programs

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