Lori Meadows
Student loan forgiveness is a possibility for borrowers who meet the requirements of one of the several different loan forgiveness programs. Public Service Loan Forgiveness (PSLF) is one such program, which allows federal student loan borrowers who have made 120 qualifying payments (10 years) while working for a qualifying public service employer to have their remaining loan balance forgiven. Another option is an Income-Driven Repayment (IDR) plan, where the monthly payment is based on income and family size. After 20 or 25 years of payments under an IDR plan, the remaining loan balance may be forgiven. It's important to note that borrowers should never have to pay any fees or charges to receive assistance with their student loans or to qualify for loan forgiveness programs.
Characteristics and values of student loan forgiveness
| Characteristics | Values |
|---|---|
| Loan forgiveness plan | IDR plan, PSLF, TLF Program |
| Requirements | Working for a qualifying public service employer, AmeriCorps service, teaching full-time in certain schools, Direct Consolidation Loan |
| Qualifying payments | 120 payments (10 years), 240 or 300 monthly payments (20 or 25 years) |
| Qualifying employers | Government, U.S. Military, state, local, tribal, certain non-profit organizations |
| Qualifying loans | Federal Direct Loans, ED-held loans, FFELP loans, Perkins loans |
| Additional notes | No fees required to receive credit toward forgiveness, careful attention to detail required for PSLF |
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What You'll Learn
Public Service Loan Forgiveness (PSLF)
AmeriCorps service can also count toward PSLF. Additionally, if you teach full time for five complete and consecutive academic years in certain elementary or secondary schools or educational service agencies that serve low-income families, you may be eligible for forgiveness of up to $17,500. It is important to note that you may not receive benefits under both the Teacher Loan Forgiveness (TLF) Program and the PSLF Program for the same period of teaching service.
PSLF has been a source of frustration for many people, with some reporting that the process involves numerous roadblocks and conflicting information from different sources. However, others have shared that they were able to successfully navigate the process and receive confirmation of loan forgiveness.
It is worth noting that graduate school loans typically do not qualify for PSLF. However, if you do a direct consolidation with your undergraduate loans after graduating from graduate school, those loans can become eligible for PSLF.
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IDR plan
The IDR or Income-Driven Repayment plan is a federal student loan repayment system where monthly payments are based on a borrower's income and family size. If the borrower's income is low enough, their monthly payment could be as low as $0.
There are four types of IDR plans: SAVE, PAYE, IBR, and ICR. The SAVE plan is the newest and most generous, with benefits such as reduced interest rates and faster loan forgiveness timelines. All of these plans provide for student loan forgiveness after 20 or 25 years at the latest. However, it's important to note that there is ongoing legal ambiguity regarding the authorisation of student loan forgiveness under these plans.
To be eligible for an IDR plan, you may need to consolidate your loans first. Additionally, you need to make sure you are on an IDR plan or the standard repayment plan to keep earning credit toward IDR loan forgiveness after any one-time account adjustments.
The Department of Education has also announced a one-time account adjustment program to help borrowers get closer to loan forgiveness. This adjustment will count any month spent in repayment, some deferment periods (before 2013), and some forbearance periods toward loan forgiveness. It's important to note that only federal student loans managed by the Department of Education qualify for this adjustment.
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AmeriCorps service
The Segal AmeriCorps Education Award
After completing your AmeriCorps term of service and enrolling in the National Service Trust, you are eligible to receive the Segal AmeriCorps Education Award. This award can be used to repay qualified student loans and pay for current educational expenses at eligible institutions of higher education and training programs. The amount of the award for full-time service is equivalent to the maximum value of the Pell Grant for the fiscal year in which the term of national service is approved. It's important to note that payments made using this award are typically subject to federal tax and, in some cases, state tax as well.
Public Service Loan Forgiveness (PSLF)
Perkins Loans Forgiveness
If you have federal Perkins Loans, you may be eligible to have up to 70% of your Perkins Loan balance cancelled as an AmeriCorps VISTA volunteer. This forgiveness benefit is based on the length of your eligible full-time volunteer service.
Income-Driven Repayment (IDR) Plans
If you don't plan to work for a PSLF-qualifying employer after your AmeriCorps service, you may want to consider an IDR plan. By making low monthly payments during your service, you can reduce your overall loan balance, and the remaining balance can be forgiven after 20 to 25 years, depending on the plan. However, this type of loan forgiveness is typically taxable.
Schools of National Service
Some colleges and universities are designated as Schools of National Service, offering benefits to AmeriCorps alumni. These benefits can include matching the Segal AmeriCorps Education Award, partial matches, or application fee waivers.
In conclusion, AmeriCorps service can provide various options for student loan forgiveness and repayment assistance. It's important to carefully consider your individual circumstances, the type of loans you have, and your future career plans to make the most of these benefits and choose the right path towards loan forgiveness.
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Teacher Loan Forgiveness (TLF)
Student loan forgiveness is possible if you meet the requirements for one of the several different loan forgiveness programs. One such program is the Teacher Loan Forgiveness (TLF) program.
TLF forgives up to $17,500 of your Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans after five complete and consecutive academic years of teaching at a qualifying school. To qualify for TLF, you must teach full-time for five complete and consecutive academic years at an eligible school. At least one of those years must have been after the 1997–98 academic year, and you must have been a new borrower on or after October 1, 1998. Certain highly qualified special education and secondary mathematics or science teachers can qualify for up to $17,500 in forgiveness. Other eligible teachers can qualify for up to $5,000.
Direct PLUS Loans, FFEL PLUS Loans, and Perkins Loans aren’t eligible to be forgiven through TLF. To maximize your forgiveness amount, you can apply for a TLF forbearance. If approved, you won’t have to make monthly loan payments; however, interest will still accrue. Borrowers with eligible loans and a balance that is greater than the TLF amount they are applying for (either $17,500 or $5,000) aren’t eligible for this forbearance type.
It is important to note that any time spent teaching to receive benefits through AmeriCorps or time counted toward PSLF or TEPSLF does not count toward your required five years of teaching for TLF. You may not receive a benefit under both the TLF Program and the PSLF Program for the same period of teaching service.
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Borrower defense to repayment
The Borrower Defense to Repayment program can result in the forgiveness of federal student loans if the borrower was defrauded or intentionally misled by their school. This process is free and does not require special expertise. If a borrower's application is approved, they can expect a full discharge of federal student loans related to their application, reimbursement of any amounts already paid towards the loans, requests to remove negative credit reporting, and reinstatement of federal student aid eligibility if it was lost.
The Biden-Harris administration approved the dismissal of approximately $30 billion in debt for 1.7 million borrowers through borrower defense claims and closed school discharge as of January 2025. Additionally, the Sweet v. Cardona settlement (formerly Sweet v. DeVos) will provide up to 264,000 student loan borrowers with at least $6 billion in debt relief. This includes full relief, such as student loan forgiveness, payment refunds, and credit repair for borrowers who filed before June 2022 and attended one of the approximately 150 for-profit schools involved in the case.
It is important to note that new rules for eligibility and forgiveness amounts have made successful borrower defense to repayment claims more challenging. However, borrowers who believe they have been defrauded or misled by their schools should still submit a claim.
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Frequently asked questions
PSLF stands for Public Service Loan Forgiveness. It allows qualifying federal student loans to be forgiven after 120 qualifying payments (10 years), while working for a qualifying public service employer.
Qualifying employers include government, federal, U.S. military, state, local, or tribal, and certain non-profit organizations.
Any months with time in repayment status, 12+ months of consecutive forbearance, months spent in economic hardship or military deferments after 2013, and months in deferment prior to 2013 (except in-school deferment).
Yes, if you teach full-time for five complete and consecutive academic years in certain schools that serve low-income families, you may be eligible for forgiveness of up to $17,500.
No, you never have to pay for help with your student loans. If someone asks you for payment in exchange for loan forgiveness, it's a scam.
