Student Loan Forgiveness Options

Are you drowning in student debt?  Are you afraid that there is no way to get out?  If so, you are not alone.  Student loan debt is at an all-time high in the history of our country, currently sitting at $1.56 trillion, with over 45 million borrowers currently in debt.  Luckily, the federal government has come up with different ways for individuals to have their student loans forgiven.  If you hold full time jobs in specific fields for the government after graduation, you may be eligible to have your loans forgiven.  The two student loan forgiveness options I will focus on are the two most popular options: the public service loan forgiveness plan and the teacher loan forgiveness plan.

The public service loan forgiveness program, or PSLF program, forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments (10 years) under a qualifying repayment plan while working full-time for a qualifying employer.  This is a great opportunity for anyone in public service careers who are struggling with student loan debt.  You are eligible for the PSLF program if you work full time for any government agency or for certain nonprofit organizations.  It is important to understand that only federal direct loans are eligible for the PSLF program.  It is also important to understand that because you must make 120 qualifying monthly payments, it will be at least ten years after you make your first qualifying payment before you can apply for PSLF. While you do not apply until 120 payments have been made, you still must fill out the Employment Certification for Public Service Loan Forgiveness form (Employment Certification Form) annually. Lastly, understand that after 120 qualifying monthly payments you do not automatically receive the PSLF, after your 120th payment, you will need to submit the PSLF application to receive loan forgiveness. You must be working for a qualifying employer at both the time you submit the application and when the remaining balance on your loan is forgiven.

With regards to the Teacher Loan Forgiveness Program, you must teach full-time for five complete and consecutive academic years in a low-income school district or educational service agency, to be eligible for forgiveness of up to $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans.  If you do not know if your current school or a school you are considering working for would qualify as a low income school or an educational service agency, the U.S. Department of Education publishes a list every year on their website: Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits (Low-Income School Directory).  In order to apply for the Teacher Loan Forgiveness Program, you must submit a completed Teacher Loan Forgiveness Application to your loan servicer after you have completed your required five consecutive years of teaching.

Both the PSLF and Teacher Loan Forgiveness Program offer great opportunities for people struggling with federal student loan debt.  While these are two of the more popular student loan forgiveness plans, there are more.  If you would like to get more information on these two programs, or see the other programs you may qualify for, I encourage you to visit the following website to find out more: