The U.S. Education Department has set aside $5 billion to cancel the debts of 70,000 borrowers. In addition, the Biden administration announced reforms to public loan forgiveness in October 2021.
Weeks following the announcement, the Education Department announced that $2 billion in student loans would be canceled.
Although it may appear too genuine, there are legal ways to obtain student loan forgiveness through free federal programs. This guide will show you some of the options available to you.
How To Qualify For Various Student Loan Forgiveness
1. Public Service Loan Forgiveness
People who work in public service can benefit from the Public Service Loan Forgiveness program, which is available in various disciplines. It’s more about the company you work with than your actual job.
Several jobs are eligible for PSLF that you may not have considered.
You may be eligible for loan forgiveness after making 120 payments. Payments don’t have to be made in a specific order, but they must be made on a qualifying repayment plan.
The PSLF waiver, which began in October 2021 and ended in October 2022, permitted debtors to get credit for previously ineligible payments if they were working toward relief while on the wrong repayment plan.
Who Is Eligible to Participate?
To be eligible, you must work full-time for a federal, state, or local government agency or a 501(c)(3)-designated organization. Religious nonprofits, labor unions, and partisan political organizations are all exempt.
2. Income-Driven Repayment Plan
The federal government offers four different income-driven repayment programs that let you set your loan payments to a percentage of your income every month.
If you enroll in one of these IDR plans, your remaining loan balance will be forgiven after 20 or 25 years, depending on the plan you choose. These plans are best for people with enormous debt compared to their income.
3. Teacher Loan Forgiveness
This federal program assists teachers in repaying their student loans. However, you must work for a minimum of five years in a qualifying school: To see if your school qualifies, go to the Teacher Cancellation Low Income Directory.
The amount of loan forgiveness varies depending on the subject you teach. For example, most primary school teachers would get a stipend of up to $5,000.
Secondary school teachers who teach science or math, including special education teachers at any level, may be eligible for loan forgiveness of up to $17,500.
What Types of Student Loans Qualify
Teacher Loan Forgiveness is only available for a few types of debts, including:
- Direct loans, both subsidized and unsubsidized
- Federal Stafford loans, both subsidized and unsubsidized
You will not be eligible for this forgiveness program if you have PLUS loans.
4. Student Loan Forgiveness For Nurses
Nurses with student debt have multiple options for federal loan forgiveness, such as the NURSE Corps Loan Repayment Program, which pays up to 85% of unpaid college debt for qualified nurses, Perkins loan cancellation, and PSLF.
In addition to national programs, many states provide loan repayment aid to nurses. For example, the Illinois Nurse Educator Program provides up to $5,000 per year to qualified Illinois nurses and nurse educators for four years.
Look through the LRAPs for nurses that are currently available. For example, you can look for awards by state, occupation, or amount. In addition, there are numerous loan forgiveness alternatives available to nurses.
The PSLF is likely because few student loan borrowers have Perkins loans, and the NURSE Corps program is highly competitive.
5. Student Loan Forgiveness For Doctors
When it comes to loan forgiveness, physicians have a variety of options. These programs also grant money to other healthcare workers who get loan forgiveness.
Some national and state forgiveness programs for doctors and other healthcare professionals are listed below.
Student to Service Program
If you’re in your final year of medical school, the Students to Service Program may be able to help you with significant loan aid. This student loan forgiveness program offers up to $120,000 in loan cancellation.
To be eligible, you must continually work as a primary health care professional for three years at an approved site.
State LRAP Programs For Doctors, Including Other Healthcare Professionals
While many programs are available nationwide, your state may be able to help you with a loan. LRAPs exist in a variety of states around the country.
Although private student debt forgiveness is less common than federal loans, it is feasible to qualify for significant repayment aid through state and employer-based programs.
In the event of the primary borrower’s total and permanent disability or death, many banks, credit unions, and other private lenders will discharge outstanding private loan obligations.