Student loan forgiveness—when your loan balance is wiped away and your student loans are marked as paid in full. Sounds like a dream doesn’t it? Like it is too good to be true. In a way it is. Student loan forgiveness is federal student loan relief program designed to help borrowers who have entered career fields that are beneficial to our country: teachers, police officers and other law enforcement agencies, nurses, and those who enter other public services like the pace corp.

The Catch

Student loan forgiveness programs clear out the remaining balance of a student loan after the borrower has been making regular monthly payments for a significant amount of time. Many of these programs also require the borrower to be enrolled in a specific type of repayment plan, one that is not usually standard upon graduation and the borrower must enroll into. It is also important to know that student loan forgiveness only applies to federal student loans, not private student loans.

So, is student loan forgiveness not worth it?

We didn’t say that—but it is important to be fully aware of all requirements for student loan forgiveness programs before jumping for joy that you may not have student loan payments in the “relative” future. Even if its just two years of payments you no longer have to pay—that’s two years of no more payments!!

Student loans are a unique credit program that leaves many borrowers unsatisfied. Why? Students apply and get into college or graduate school on their own merit but are still required to pay tuition and cover the costs of books, supplies, fees, and their own personal expenses. Then, they work hard, study, and put time and effort into graduating, earning their degree—but they have also paid for it by this point as well. This feeling of working hard and earning your degree and having to pay for the pleasure can make student loans seem unreal. Plus, there is no tangible property with earning the degree except the diploma afterwards. So, when it comes to paying back the significant amount of borrowed money, the whole process seems unreal and unrealistic.

Often, the repayment process seems endless—for some last 10, 20, or 25 years to pay off the loan, so when it comes to student loan forgiveness after making that many payments with only 2 years of savings in comparison, it doesn’t always seem exciting or worth it. Add that on top of the very specific requirements and the many reports of the difficulties some students went through to get the remaining balances forgiven, the programs don’t always live up to their hype.

Types of Student Loan Forgiveness Programs

Public Service Student Loan Forgiveness

  • Must make 120 (*qualifying*) student loan payments
  • Must be enrolled in an income-based repayment plan to get credit for making a payment. *If you are in a standard repayment plan (which is the default option when you graduate, you’ll pay off the loan before you can make 120 payments).
  • Must be employed in full time public service work, like law enforcement or peace corps.
  • Full Eligibility Requirements

Teacher Student Loan Forgiveness

  • Forgives fifteen percent of the loan during the first and second years of being a full-time teacher. Twenty percent of the third and fourth years, while the outstanding 30 percent in the fifth year. In total, teachers can have up to $17,500 of their student loan debt forgiven solely for following through in the career field.
  • Full Eligibility Requirements

Income Driven Student Loan Forgiveness

  • Individuals enrolled in an income-based repayment plan will have their remaining balance cleared after 20 or 25 years (depending on their initial term).

Student Loan Forgiveness For Nurses

  • Can qualify under the Public Service Loan Forgiveness Program
  • Also qualifies under the Perkins Loan Cancellation program and the NURSE Corps Loan Repayment Program

Military Student Loan Forgiveness

  • If service members need to take out a student loan to cover the costs of tuition and related expenses outside of what they are allotted in their GI Bill, there are special Student Loan Forgiveness options for those in the Army, Navy, Air Force, Marines, and National Guard.

Other Programs