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Legal How-To: Getting Student Loans Forgiven

By Aditi Mukherji, JD on February 04, 2014 | Last updated on March 21, 2019

As you try to manage your student loans, it's important to remember that there are a number of loan forgiveness programs out there that you may qualify for.

Forgiveness programs aren't a quick fix, as they take several years to complete. Still, they're a great way to see the light at the end of the tunnel, to avoid defaulting on your loans, and eventually, to help you move on with your life.

Here are a few potential ways to get your student loans forgiven:

  1. Income-based repayment forgiveness. When you're on an income-based repayment plan, you make regular payments based on your discretionary income. If you have not paid off your student loans within 25 years (not counting periods of deferment or forbearance) on an income-based student loan repayment plan, the federal government will forgive the remainder of your Direct Loans, excluding PLUS Loans. The major catch is that you will have to pay taxes to the IRS on the amount of your loans that are forgiven, which can really add up and haunt you for years to come.
  2. Teacher loan forgiveness. You may qualify for the Teacher Loan Forgiveness Program if you teach full-time for five consecutive years in certain schools and educational agencies that serve low-income families. If you qualify, you can receive up to $17,500 in forgiveness on your Direct Loans and your Federal Stafford Loans. Your Federal Perkins Loan may be cancelled or deferred under Perkins Loan Cancellation. Unfortunately, this program isn't available for PLUS loans.
  3. Public service loan forgiveness. The Public Service Loan Forgiveness Program grants loan forgiveness to those who work in federal, state or local government jobs, or at a nonprofit that's been designated as a 501(c)(3) tax-exempt organization. You must make 120 on-time monthly loan payments and work in a qualifying public service job for 10 years (they don't have to be consecutive). Though the forgiveness only applies to Direct Loans, you can consolidate certain loans -- including the Federal Family Education Loan (also known as FFEL) and Perkins Loan -- into a Direct Loan.
  4. Other forgiveness programs. The above-listed programs are just the tip of the iceberg of forgiveness programs available. A variety of loan forgiveness programs are based on certain types of jobs, while others are state programs, some of which even apply to private loans. A growing number of employers are refunding student loan payments, too.

Need More Help?

For extra help, check out the American Student Assistance's list of 60+ ways to get rid of your student loans and download FindLaw's free Guide to Student Loan Debt. For more personal guidance about dealing with your student loans, consider getting in touch with an experienced banking and finance lawyer near you.

Are you facing a legal issue you'd like to handle on your own? Suggest a topic for our Legal How-To series by sending us a tweet @FindLawConsumer with the hashtag #HowTo.

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