How to find student loan forgiveness programs

Americans owe a total of $1.75 trillion in student loan debt. That level of debt can have a major effect on career options for many college graduates, who may choose to dismiss lower paying public service jobs in favor of higher-income private sector work.

The good news is that there are other options that can help provide some debt relief to qualifying teachers, nurses, and other public sector workers. Here's an overview of some of the major federal student loan forgiveness programs:

Public service loan forgiveness

Introduced in 2007 as part of the College Cost Reduction and Access Act, Public Service Loan Forgiveness (PSLF) offers qualifying full-time public service employees the opportunity to have their federal student loans forgiven after they’ve made 10 years of payments. The program is available to qualifying government and not-for-profit employees, such as law enforcement officers, military personnel, and public health and education professionals.

On October 25, 2022, the Biden-Harris administration announced permanent changes to the qualifications for PSLF. These include getting retroactive credit for partial, late, or lump sum payments, payments made under a previously unqualified repayment plan, or payments made during a time of deferment or forbearance (such as the nationwide payment pause that started in March 2020). Read more on these changes to PSLF.

To qualify for the PSLF program, you must:

• Work full-time for a government agency or 501(c)(3) not-for-profit organization. Serving as a full-time AmeriCorps or Peace Corps volunteer also counts as qualifying employment
• Have made 120 consecutive student loan payments
• Have previously enrolled in a qualified income-driven repayment (IDR) plan
• Work toward the forgiveness of a federal Direct Loan, including Direct subsidized and unsubsidized Loans, Direct PLUS loans, and Direct consolidation loans. The Public Service Loan Forgiveness Help tool can help you figure out if your loans and employer qualify and, based on your personal scenario, help you determine which forms to complete.

Income-driven repayment options

Income-driven repayment can help reduce monthly federal higher education loan payments to a more manageable level (sometimes even to zero), based on family size and current income. At each program's completion, any remaining loan balance is forgiven. Only federal student loans qualify, although qualifying loans vary by program.

Those programs include:

• Income-Based Repayment (IBR): If you qualify, you'll likely pay 10% of your discretionary income and have a loan term of 20 years. Only Federal Family Education Loans (FFEL) and Direct Loans are eligible for IBR.
• Pay As You Earn Repayment (PAYE): Your payment will likely be 10% of your discretionary income with a new term of 20 years. However, your monthly payment will never be higher than what your payment would be under a 10-year standard student loan repayment plan. The PAYE program applies to federal Direct Loans only.
• Saving On A Valuable Education (SAVE): For someone with an undergraduate loan, the monthly payment is 5% of discretionary income and the term is up to 20 years. For someone with a graduate degree, the monthly payment is 10% of discretionary income, but the term is up to 20 years. The SAVE Plan applies to federal Direct Loans only. 
• Income-Contingent Repayment (ICR): Your loan term shifts to 25 years, with your payment capped at 20% of your discretionary income or what you would pay under a repayment plan with fixed payments over 12 years, whichever is less. ICR is the only repayment plan that applies to federal parent PLUS loans — but the PLUS loan(s) must be consolidated via a Direct Consolidation Loan in order to qualify for ICR.

The Income-Driven Repayment Plan request can help you apply and determine the correct program for your situation.

The teacher loan forgiveness program

Available to teachers who have worked in qualifying low-income schools for at least five years, the Teacher Loan Forgiveness Program offers up to $17,500 in federal Direct and Stafford student loan forgiveness. A list of current qualifying schools can be found at the Teacher Cancellation Low Income Directory.

This program is one of the fastest pathways to federal student debt forgiveness. Both public and private nonprofit schoolteachers may also qualify for the 10-year PSLF program discussed above. For a teacher with a higher debt load, the PSLF program may represent a slower — although more financially beneficial — option.

Which program for federal student loan forgiveness for teachers may work best under certain circumstances? Here’s a chart to help differentiate the two, which may help you decide:

Teachers at any level can complete the Teacher Loan Forgiveness Application and submit it to your student loan servicer after you've met the five-year teaching criteria. 

Qualifying teachers with federal Perkins Loans can also qualify for student loan forgiveness while these loans still exist (they were last issued in 2017). To qualify, a teacher must:  

• Work in a qualifying low-income school, as identified in the Teacher Cancellation Low Income Directory
• Teach special education students or infants, toddlers, or youngsters with another disability
• Be an educator in a field with a teacher shortage, such as math, science, foreign language, or bilingual education

To apply, reach out to the university that awarded your Perkins Loans. Eligible loans will be canceled as follows: 15% the first and second years of service, 20% for the third and fourth, and the remaining 30% canceled for the fifth.

Military student loan forgiveness

There are many options for veterans or those currently serving in the military that will lower your interest rates, defer payments for a period of time, or even get the Department of Defense to pay back your loans. But if you’re looking for student loan forgiveness, then refer back to the section on the Public Service Loan Forgiveness plan. Military service is a qualifier for that program, and is the main method that those in the military can seek student loan forgiveness.

Student loan forgiveness programs for nurses

There are a number of student loan forgiveness programs for nurses at the national and state levels, including:

• The Nurse Corps Loan Repayment Program is a scholarship-based program geared toward registered nurses in underserved communities in critical shortage facilities. Approved program employees may have 60% of their loans paid off after two years of employment, and an additional 25% paid off after the third.
• Federal student loan forgiveness programs, like the Public Service Loan Forgiveness Program, are available for nurses who work for 501(c)(3) not-for-profit or federal government organizations. These could include nurses who work for a VA hospital or medical-related not-for-profits like the American Red Cross. The Federal Perkins Loan Cancellation is also open to full-time nurses, regardless of field.
• The National Health Service Corps Loan Repayment Program awards up to $50,000 for full- and part-time nurse practitioners and $25,000 for certified midwives who work in designated Health Professional Shortage Areas across the nation.

Local forgiveness programs are available in most states. Check with your state and local officials for specific information on what your area offers for nurses.

How will forgiveness affect my credit score?

Credit scores can be fickle things and making a generalization about how student loan forgiveness might affect yours would be an error, given the unique nature of your credit history and your repayment habits. But we can say that eliminating a loan does not directly affect your credit score, but you might still see a difference based on your other debts. A credit score is aggregated based on a lot of different data, including the length of your credit history. By getting rid of a loan, your average credit history could drop and might initially affect your score. However, in the long run, the elimination of debt can help improve your overall credit profile. 

Ready to take control of your student debt?

Please note that only a small percentage of loan borrowers meet the eligibility requirements for federal forgiveness, so you may have to consider other options for helping to manage your student loan debt. If you're ineligible for student loan forgiveness, a student loan refinance^† could benefit you by reducing your monthly payment and simplifying your loans into one easy payment. Visit our website to find out more information.