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:
*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?