University Employees: Student Loan Forgiveness Options

University employees may be eligible for student loan forgiveness, depending on the type of loan, the university's status, and the employee's role and income.

Public Service Loan Forgiveness (PSLF) is a federal program that forgives student loan debt for government and qualifying non-profit employees. This includes full-time employees of federal, state, local, and tribal governments, as well as those working for certain non-profit organizations. PSLF forgives the remaining loan balance after 120 qualifying loan payments on an IDR plan and 10 years of full-time public service work.

University employees should check if their university is a qualifying non-profit organization and if their role meets the requirements. Additionally, they should ensure they have the right type of loans, as only federal Direct Loans can be forgiven through PSLF. Other types of federal student loans, such as Federal Family Education Loans (FFEL) or Perkins Loans, may be eligible if consolidated into a new federal Direct Consolidation Loan.

It's important to note that PSLF is not the only option for student loan forgiveness. There are also income-driven repayment (IDR) plans, which cap monthly payments based on income and family size. Under these plans, any remaining loan balance may be forgiven after 20 or 25 years of repayment.

University employees should carefully review the requirements and eligibility criteria for PSLF, IDR plans, and other student loan forgiveness programs to determine their options for loan forgiveness.

Public Service Loan Forgiveness (PSLF)

To qualify for PSLF, you need to have the right type of loans: only federal Direct Loans can be forgiven through PSLF. If you have other federal student loans, such as Federal Family Education Loans (FFEL) or Perkins Loans, you may be able to qualify by consolidating them into a new federal Direct Consolidation Loan. It's important to keep proof of your payments, as you will need to submit forms documenting your qualifying employment and monthly payments. Additionally, you must make sure that your loans are not in default, as defaulted loans are not eligible for PSLF.

The PSLF program also offers temporary changes that make it easier to receive forgiveness or get credit toward forgiveness. For example, under these changes, you can receive credit for any past payments, even if they were not on time or for the full amount. These temporary changes expired on October 31, 2022, so borrowers needed to apply before that date to take advantage of them.

It's important to note that PSLF is different from Income-Driven Repayment (IDR) Forgiveness, which bases your monthly student loan payment on your income and family size. Under IDR plans, any remaining loan balance may be forgiven after 20 or 25 years of repayment, depending on the plan.

Income-driven repayment forgiveness (IDR)

The remaining balance on your loans may be forgiven after 20 or 25 years of repayment, depending on the type of loan. The repayment term is 10 years if you borrowed $12,000 or less, with the term increasing for every $1,000 borrowed above this amount until the cap of 20 or 25 years is reached. The 20-year repayment term cap applies if all the loans you're repaying under the plan were received for undergraduate study. The 25-year repayment term cap applies if any of the loans you're repaying under the plan were received for graduate or professional study.

There are several IDR plans, including:

• Saving on a Valuable Education (SAVE) Plan (formerly the REPAYE Plan)
• Pay As You Earn (PAYE)
• Income-Based Repayment (IBR)
• Income-Contingent Repayment (ICR)

The SAVE Plan is the newest IDR plan, under which the remaining balance will be forgiven after 10 years of repayment.

On April 19, 2022, the Department of Education announced several changes and updates to bring borrowers closer to forgiveness under IDR plans. As part of a one-time adjustment, the Department of Education will count any month spent in repayment, some deferment periods (before 2013), and some forbearance periods toward loan forgiveness. This means that some borrowers will receive additional years of credit toward loan forgiveness, and loans that have been in repayment for more than 20 or 25 years may immediately qualify for forgiveness.

Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will have their loans forgiven as they reach these milestones. The Department of Education will continue to discharge loans as borrowers reach the required number of months for forgiveness. All other borrowers will see their loan accounts updated by 2024.

It's important to note that only federal student loans managed by the Department of Education qualify for the one-time IDR adjustment. Borrowers with Direct Loans or federally-managed FFELP loans will not need to take any action to benefit from the adjustment. Any borrower with ED-held loans that have accumulated at least 20 or 25 years of repayment time will receive automatic forgiveness, even if their loans are not currently on an IDR plan.

For borrowers with FFELP loans held by commercial lenders or Perkins loans not held by the Department of Education, consolidation into Direct Loans is required to benefit from the one-time IDR account adjustment. These borrowers must consolidate by June 30, 2024.

Teacher Loan Forgiveness

University employees with student loans may be eligible for loan forgiveness. Teachers with federal student loans have several loan forgiveness program options.

The TLF Program forgives up to $17,500 of your Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans. To qualify, you must 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. 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.

Public Service Loan Forgiveness (PSLF) Program

The PSLF Program forgives the remaining balance on your Direct Loans after 120 qualifying payments (a minimum of 10 years). Unlike the TLF Program, PSLF doesn't require you to teach at a low-income public school. Instead, it requires that you work for a qualifying employer, including government organizations at any level (federal, state, local, or tribal) or certain non-profit organizations.

Perkins Loan cancellation for teachers

The Perkins Loan cancellation program forgives up to 100% of your Federal Perkins Loan(s) if you teach full time at a low-income school or if you teach certain subjects. Perkins Loan cancellation can only forgive your Federal Perkins Loans. If you’re eligible, up to 100% of your loan(s) may be canceled in the following increments: 15% canceled per year for the first and second years of service, 20% for the third and fourth years, and 30% for the fifth year.

State-sponsored student loan forgiveness programs

Many states offer loan forgiveness programs for teachers, especially if you teach in a high-need area. Reach out to your state’s education agency for details.

Student loan forgiveness for nurses

Student loan forgiveness programs are typically offered to nurses who work in public service, such as for government or nonprofit organisations, or in underserved communities. Nurses often have a variety of options to make monthly student loan payments more manageable, including several paths to student loan forgiveness.

Public Service Loan Forgiveness (PSLF)

The PSLF program is available to nurses working full time for a government or nonprofit organisation. It pays off the remainder of their loans after the first 120 payments. Nurses working for different employer types can typically qualify for PSLF, including qualifying nonprofit hospitals or organisations, state hospital systems, and public schools, including universities and K-12 school systems.

Income-Driven Repayment (IDR)

IDR plans cap monthly payments based on income and family size. Depending on the plan, the remaining balance on loans may be forgiven after 10, 20, or 25 years of repayment. Nurses can apply for IDR regardless of their employer.

State-Sponsored Student Loan Forgiveness

Most US states offer at least one student loan forgiveness program for nurses, though they are usually subject to funding and may be limited to certain specialties. For example, the Maryland Loan Repayment Program (MLRP) offers varying maximum forgiveness amounts for nurses depending on their specialty and degree type.

National-Level Programs

The Health Resources & Services Administration (HRSA) offers several federal loan repayment programs for nurses, including the Nurse Corps Loan Repayment Program, the National Health Service Corps Loan Repayment Program, and the National Health Service Corps Substance Use Disorder Workforce Loan Repayment Program.

Military Programs

The military also offers student loan forgiveness programs for nurses, such as the Army Active Duty Health Professions Loan Repayment Program. RNs and APRNs can receive up to $120,000 to repay nursing school loans and get a $40,000 yearly salary by enlisting in the Army with a three-year service commitment.

Student loan discharge programs

Closed School Discharge

If your school closes while you're enrolled or soon after you withdraw, you may be eligible for a closed school loan discharge. To qualify, you must have been enrolled at the time of closure or have withdrawn no more than 180 days before the school closed without receiving a degree. If approved, you will no longer have to make loan payments and may be refunded some or all of the past payments.

Borrower Defence to Repayment

Borrowers defrauded by their colleges may qualify for debt relief under the borrower defence to repayment program. To apply, you'll need to file a borrower defence claim with the U.S. Department of Education. If you qualify, the Education Department may decide to discharge your loans automatically.

Perkins Loan Cancellation and Discharge

Borrowers with federal Perkins loans can have up to 100% of their loans discharged if they work in a public service job for five years. The program also offers loan discharge for teachers who work full time in low-income public schools or teach specific subjects, such as special education or math.

Total and Permanent Disability Discharge

If you are unable to work due to a total and permanent disability, you may qualify to have your remaining student loan debt cancelled. To be eligible, you'll need to provide documentation of your disability. Once your loans are discharged, the government may monitor your finances and disability for three years. If you don't meet the requirements during this period, your loans may be reinstated.

Total and Permanent Disability Discharge for Veterans

Veterans with total and permanent disabilities will have their student loan debt discharged automatically unless they decline due to potential state tax liability.

Student Loan Death Discharge

In the unfortunate event of your death, your federal loans will be discharged once a death certificate is submitted to your loan servicer by a family member or authorized representative. Federal Parent PLUS loans can also be discharged upon the death of either the parent who took out the loan or the student for whom they borrowed.

Frequently asked questions