Ibrahim Gardner
If you're struggling to repay your student loan, there are several options to consider. You can contact your loan servicer to discuss loan deferment or forbearance, which can temporarily pause or reduce your payments. Additionally, you may qualify for loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF) or the IDR plan, which offer loan discharge or forgiveness after a certain number of qualifying payments. If you're a teacher, there are specific loan forgiveness programs tailored to your profession. It's important to understand the potential consequences of delinquent payments, which can lead to default and impact your financial standing. Explore the various resources available to avoid delinquency and default, and don't hesitate to seek help from your loan servicer or the Federal Student Aid Ombudsman Group.
| Characteristics | Values |
|---|---|
| Loan Forgiveness | You may be eligible for loan forgiveness if you work for the government or a not-for-profit organization, or in specific fields like teaching, healthcare, or the military. Forgiveness is also available for those with disabilities or who are experiencing financial or health-related issues. |
| Loan Discharge | Eligible under certain conditions like bankruptcy, disability (TPD discharge), or if your school closes while you're enrolled. |
| IDR Plan | Your monthly payment is based on your income and family size. The remaining balance may be forgiven after a certain number of payments over 20-25 years. |
| PSLF | Forgiving federal student loans under an IDR or a standard 10-year plan. |
| Direct Consolidation Loans | Combine multiple federal loans into one loan with a lower interest rate. |
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What You'll Learn
Loan forgiveness programmes for teachers
If you have federal student loans and work as a teacher, you may be eligible for several loan forgiveness programmes. Public Service Loan Forgiveness (PSLF) is often considered the best option, but there are other programmes to consider, such as the Teacher Loan Forgiveness (TLF) Program.
Public Service Loan Forgiveness (PSLF)
PSLF allows qualifying federal student loans to be forgiven after 120 qualifying payments for people working in public service, including many teachers. PSLF does not have a debt limit for forgiveness.
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 years of teaching at a qualifying school. To qualify, you must have been employed as a full-time teacher at an eligible school for five complete and consecutive academic years. 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, mathematics, or science teachers can qualify for up to $17,500 in forgiveness, while 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, which allows you to temporarily stop making monthly loan payments, although interest will still accrue.
Federal Perkins Loan Cancellation
If you have a Federal Perkins Loan, there is a cancellation option for teachers. Perkins Loan cancellation can forgive up to 100% of your loan(s) in yearly increments after you meet service requirements. To qualify, you must teach full time at a low-income school or teach certain subjects.
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Loan forgiveness for government or not-for-profit workers
If you work for a nonprofit or government organisation, you may be eligible for loan forgiveness under the Public Service Loan Forgiveness (PSLF) program. This program was established by Congress in 2007 to encourage Americans to enter the public service sector. It promises to forgive the remaining student loan debt of eligible borrowers after they complete 10 years of service in certain public service jobs and make 120 qualifying monthly payments (usually over 10 years) under a qualifying repayment plan.
To be eligible for PSLF, you must work full time for a nonprofit or government agency and have Federal Direct Loans. Your employer must be a 501(c)(3) charitable nonprofit or a government entity. The PSLF program only applies to certain types of federal student loans, and your loans must not be in default.
The PSLF Help Tool can assist borrowers in filling out the necessary forms and submitting them to their PSLF servicer for processing. This tool allows borrowers to have their employers digitally sign and certify their eligible employment.
It is important to note that the PSLF program has undergone some changes and proposed revisions. In March 2025, President Trump signed an executive order directing the Department of Education to propose changes to exclude organisations that "engage in activities that have a substantial illegal purpose". This includes organisations that advance illegal immigration, support terrorism, child abuse, illegal discrimination, or disorderly conduct. However, these proposed revisions do not immediately change the program, and any updates must go through a process called negotiated rulemaking.
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Loan forgiveness for military service members
Active-duty military service members can benefit from loan forgiveness and repayment programs. The Public Service Loan Forgiveness (PSLF) program cancels federal student loans after 10 years of public service. The Department of Education counts months spent on active duty towards PSLF, even if the loans were on deferment or forbearance. Active-duty service members can also apply for loan deferment, forbearance, interest suspension, or cancellation.
The Servicemembers Civil Relief Act (SCRA) entitles active-duty service members to an interest rate reduction to 6% on student loans taken out before military service. To obtain this benefit, contact your student loan servicer and provide a copy of your active-duty orders.
The Loan Repayment Program (LRP) is a special incentive offered by the Army to highly qualified applicants. Under the LRP, the Army repays part of a soldier's qualifying student loans. Only specified Military Occupational Specialties (MOSs) qualify for the LRP.
Additionally, the Department of Defense Transition Assistance Program (DoD-TAP) provides information and resources to help service members transition after leaving active duty. Service members may be eligible for benefits offered by TRICARE and the Department of Veterans Affairs (VA).
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Student loan repayment plans
The U.S. Department of Education is working to improve federal student loan repayment options. Borrowers in the SAVE Plan are being urged to transition to a legally compliant repayment plan, such as the Income-Based Repayment Plan. The Department is providing direct outreach to borrowers enrolled in the SAVE Plan, offering instructions on how to move to a legal repayment plan.
The SAVE Plan was introduced by the Biden Administration and offered a zero per cent interest rate on federal student loans. However, federal courts, including the Supreme Court, have ruled that the plan is unlawful, and borrowers in the SAVE Plan cannot access loan benefits or make progress toward loan discharge programs. As a result, borrowers will need to switch to an alternative repayment plan.
The Department is also addressing the backlog of submitted IDR applications and borrowers switching from the SAVE Plan to an IDR plan can expect timely processing. To compare available repayment plans, borrowers can use the Loan Simulator to estimate monthly payments, determine repayment eligibility, and identify the best option for their needs.
It is important for borrowers to be aware of their legal obligation to repay their loans and to understand the benefits of making regular progress toward repayment. By selecting a sustainable repayment plan, borrowers can work towards financial stability while also fulfilling their loan commitments.
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Direct Consolidation Loans
A Direct Consolidation Loan allows borrowers to combine multiple federal education loans into a single loan. This loan is issued through the Federal Direct Student Loan Program, which allows students and parents to borrow directly from the US Department of Education. The application for a Direct Consolidation Loan is free, and most federal loans are eligible for consolidation, but private loans are not.
Borrowers can consolidate once they complete or withdraw from school, or fall below half-time student status. By consolidating their loans, borrowers can lower the number of loan payments they have to make each month, as they will have a single monthly payment instead of multiple payments. Direct Consolidation Loans also have a fixed interest rate, meaning the interest rate won't change year to year. This fixed rate is based on the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of 1%.
However, borrowers should carefully consider whether loan consolidation is the best option for them. One disadvantage of Direct Consolidation Loans is that borrowers may lose any benefits associated with their original loans, such as interest rate discounts, principal rebates, or loan cancellation benefits. Additionally, because consolidation extends the repayment period, the borrower will likely pay more in interest over the life of the loan. The amount of time borrowers have to repay their Direct Consolidation Loan can vary from 10 to 30 years, depending on the loan amount.
Borrowers who obtain a Direct Consolidation Loan may also be able to access loan forgiveness options, such as the Teacher Loan Forgiveness Program and the Public Service Loan Forgiveness (PSLF) program.
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Frequently asked questions
You should contact your loan servicer to pay back your student loans.
If you are struggling to repay your student loan, you should contact your loan servicer to discuss your options. You may be able to suspend or reduce your payments through loan deferment or forbearance, or you may qualify for loan forgiveness or discharge.
Loan deferment or forbearance allows you to temporarily pause or reduce your loan payments if you are unable to make them. However, interest will continue to accrue during this time, so your loan will cost more overall.
Loan forgiveness means that you may be able to have part or all of your student loan debt forgiven if you meet certain eligibility requirements. This could include working full-time for a government or not-for-profit organization, teaching in certain schools, or having a disability that severely limits your ability to work.
Loan discharge is similar to loan forgiveness and means that you are no longer responsible for repaying your student loan. This could be due to certain circumstances such as a disability, the closure of your school, or borrower defense to repayment.
