Navigate the world of student loan with confidence. Explore options, repayment plans, and expert advice to make informed decisions about financing your education.
The application is simple and straightforward, requiring borrowers to sign electronically and check the box that certifies they will provide accurate information under penalty of perjury. It should take just minutes to complete.
Forgiveness programs generally require working in a qualifying profession and making a specific number of qualifying payments. Explore alternative options like forbearance and deferment to pause payments temporarily.
1. Know Your Eligibility
The key to student loan forgiveness is keeping abreast of eligibility requirements and application deadlines. Each forgiveness program has its own set of rules and requirements, and the rules can change often. The best way to know whether you’re eligible is to stay in contact with your loan servicer. You should keep them updated on any changes in your employment, income, or family size that could affect your eligibility.
It’s also important to understand that loan forgiveness is different than forbearance. Forgiveness eliminates your debt; forbearance simply postpones your payments. If you’re struggling to make your monthly payments, you should ask for forbearance instead of going into default on your loans. If you choose to go into default, you may not be able to qualify for any future forgiveness programs and the interest on your debt will continue to accrue.
If you’re seeking PSLF or Temporary Expanded PSLF (TEPSLF) loan forgiveness, you must complete 120 qualifying monthly payments on a qualified repayment plan in order to qualify for cancellation. You can track your progress toward this goal by logging into the Federal Student Aid website and navigating to the “Aid Summary” page. Then, look for the column labeled “Total Repayment Period” to see how many qualifying payments you’ve made. You should try to make your payments as close to the minimum amount as possible to minimize your total repayment period.
Other income-driven repayment plans—including IBR, PAYE, and REPAYE—are not based on your total debt balance, so you don’t have to worry about hitting a certain number of years in order to qualify for loan cancellation. However, you should still be sure to track your progress over time, as the Department of Education will begin notifying borrowers in September that they’re on the path to PSLF or TEPSLF loan forgiveness.
2. Determine Your Goals
Student loan forgiveness is a great option for those in certain jobs, but it’s important to understand that it doesn’t erase your entire debt load. It’s crucial to set realistic goals about how you will pay off your loan and what you can expect in terms of benefits. You can start by creating a list of goals that you want to achieve, and it may help to have a goal-setting guide like this one to get started.
Make sure your goals are specific and measurable, and remember that you’re more likely to follow through with something that excites you or gives you a sense of accomplishment. It’s also a good idea to set goals that push you a bit beyond what you think you can do — goals that stretch us are often more motivating!
Some borrowers are in a position to pursue student loan forgiveness through the Public Service Loan Forgiveness program, which can reduce your loan balance after making 120 on-time payments. This option is available to those who work for government organizations at the federal, state, local, or tribal level and not-for-profits designated tax-exempt under Section 501(c)(3).
Unfortunately, this plan has been challenged in court by six states and the Supreme Court has put a halt on student loan forgiveness while it reviews the case. Borrowers should be wary of incurring debt that they can’t afford to repay on the basis of a future promise of student loan forgiveness, as this may prove difficult to obtain in the current climate. Fortunately, other options exist for debt relief, including working with nonprofit credit counseling agencies to find creative ways to manage and restructure your student loan payments.
3. Apply
The good news is that it’s pretty easy to apply for student loan forgiveness. There are no forms to fill out or special logins to remember, though the Education Department may request that you submit documentation of your income. Once you’ve made 120 qualifying payments (not necessarily consecutive) on a qualified repayment plan, you can contact your loan servicer to apply for forgiveness. It could take up to six weeks for the Department of Education to approve your application, so it’s wise to do so sooner rather than later.
You should also keep in mind that applying for forgiveness doesn’t automatically clear your debt; it only cancels the amount of interest you owe at the time of forgiveness. For this reason, it’s important to pay off as much of your debt as possible while you’re in the process of applying for forgiveness.
Besides PSLF, there are other federal programs that offer loan forgiveness or payment assistance. For example, nurses have multiple options for loan forgiveness, including the Public Service Loan Forgiveness and the NURSE Corps Loan Repayment Program, which pays up to 85% of a nurse’s unpaid student loans. Additionally, there are several niche loan forgiveness and repayment assistance programs available for borrowers in specific fields.
Some of these programs are tax-free at the federal level, while others aren’t. It’s a good idea to consult a tax professional before making any decisions about how to manage your student debt, as many states align their income taxes with federal law for simplicity and consistency. However, some state laws are more complex and could result in a different tax treatment for your student debt relief. For example, Arkansas, California, Indiana, and Minnesota treat loan forgiveness differently than the rest of their state’s income tax code, so borrowers in these states may be required to pay taxes on loan forgiveness under certain circumstances.
4. Monitor Your Loans
After graduation, life gets busy and it’s easy to miss payments. However, missing a payment can have serious consequences for your credit history and future borrowing ability.
To keep from accidentally missing payments, it’s a good idea to make it a priority to regularly check your loan balance. The easiest way to do this is by updating a student loan spreadsheet on the same day every month (ideally the day your loan payment is applied). Using the same day each month will help you get into a habit of keeping track of your balances, and it can also give you a psychological boost when you see your loan balances go down.
It’s also a good idea to track your repayment progress with an online student loan repayment calculator. The tool will show you how long it will take you to pay off your loans based on the type of repayment plan you choose and your interest rate. You can also use the tool to review different types of repayment plans to find the one that will best meet your needs.
If you’re considering loan forgiveness, it’s important to monitor your loans for changes in status. For example, if you have federal loans that were borrowed before 2007, it is possible that your loan servicer will apply a one-time adjustment to your loans which may cause them to count toward forgiveness. This could mean that you will qualify for loan forgiveness much sooner than you anticipated.
In addition to monitoring for changes in status, it’s also a good idea to keep track of your loan servicers. Many people switch to new servicers after graduating, dropping below half-time enrollment, or going into the workforce. You can find the contact information for your loan servicer by visiting their website or calling them.
5. Keep Records
Many student loan forgiveness programs involve submitting tax returns and other documentation. In addition, for those enrolled in an income-driven repayment plan like PSLF or PAYE, you’ll have to submit annual verification of your income to your loan servicer to stay on track with your repayment plans. So, it’s important to keep those tax documents and other records in a safe place when applying for student loan forgiveness.
For borrowers who are hoping to qualify for loan forgiveness under IDR plans, the Education Department recently made some changes and updates that may help you. For example, it has adjusted the way it counts periods spent in repayment, deferment, and forbearance toward your forgiveness eligibility, and the number of years that will count toward loan cancellation when you do qualify.
Getting on an income-driven repayment plan can make your federal loan payments more affordable while you meet the requirements for forgiveness programs. But, remember that the IRS considers any forgiven debt as taxable income and you may need to pay taxes on those amounts through 2025.
If you’re not sure what your options are for loan forgiveness, talk to a financial aid specialist at your school or contact the Department of Education. They can give you information about the various options for federal and private student loans and help you determine which would be best for your situation. Be aware that while loan forgiveness eliminates your debt, forbearance merely postpones your payments. You should never stop paying your loan if you’re in financial trouble, so be sure to seek out assistance before your payments are interrupted. You can also find additional information about federal and private student loan repayment assistance through state programs, nonprofits, and employer benefits.