The goal of this list is to help borrowers decide which loan forgiveness programs may be worth pursuing. Additionally, we will introduce some lesser-known options for forgiveness.
No forgiveness program is simple to use, and many only offer partial debt relief. Yet, for many people, pursuing forgiveness of their student loans is the best route to financial freedom.
No forgiveness program can be classified as easy, and some programs only forgive a portion of the debt. However, for many borrowers, debt forgiveness represents the best path to financial freedom from student loans.
- We ranked the best student loan forgiveness programs according to how easy they are to qualify for and the number of eligible borrowers.
- Some programs require borrowers to be in a specific field or occupation.
- Other programs apply only to federal student loans.
- Student loan forgiveness can also have tax consequences.
Biden Loan Forgiveness/Cancellation
Let’s get the bad news out of the way first.
During Joe Biden’s term in office there were a number of attempts made at forgiving student loan debt for the vast majority of borrowers. Most notably, there was a plan to forgive up to $20,000 per federal borrower. Additionally, there have been other attempts at forgiveness for borrowers who had balances greater than what they originally borrowed.
Unfortunately, these programs were either permanetly blocked by the Supreme Court or still facing legal battles when Donald Trump was elected. Many forgiveness programs still remain, but it is unlikely that any further one-time relief programs are coming.
#1 Public Service Student Loan Forgiveness
Of all the loan forgiveness programs, Public Service Loan Forgiveness (PSLF) is the best. It allows borrowers with federal student loans to have all of their qualifying debt eliminated after ten years of public service. The cherry on top? The government forgives this debt tax-free.
Qualifying for Public Service Loan Forgiveness has three basic requirements.
- The loans have to be eligible federal loans.
- The borrower has to make timely payments on an eligible repayment plan.
- The borrower must be working full-time for an eligible public service employer.
While these three requirements seem simple, they each represent potential hurdles for borrowers.
Eligible Federal Loans – Not all federal loans qualify for PSLF. Fortunately, some loans that don’t qualify can become eligible via the process of Federal Direct consolidation. However, going through consolidation also restarts the forgiveness clock. Therefore, borrowers who need to consolidate should do so right away. It also means that consolidation should only happen when necessary.
Eligible Repayment Plan – Only specific federal repayment plans qualify for PSLF. The two most common examples that do not qualify for PSLF are the graduated and extended repayment plans. Most borrowers pursuing PSLF stick with income-driven repayment plans such as IBR, REPAYE, and PAYE.
There is one exception to the eligible repayment plan requirement. Legislation signed into law in 2018 allows borrowers who mistakenly enrolled in the wrong repayment plan to qualify for PSLF. The Federal Student Aid website explains the procedure for signing up. Borrowers would be wise not to rely upon this exception, however, as it is temporary. The extended program ends when the available funds run out.
Eligible Public Service Employer – Borrowers who work for the government or a 501(c)(3) non-profit meet this requirement. Other public service employers might qualify, but this is a bit more complicated. The best way to check employer eligibility is to complete an employer certification form and mail it to your student loan servicer. This step triggers a review of your account, which tracks your progress towards the required ten years (120 payments). Accordingly, borrowers should complete an employer certification form every year.
The Department of Education’s PSLF Help tool is an excellent resource for verifying employer eligibility and tracking progress towards forgiveness.
Although we’ve ranked PSLF as the number one forgiveness program, that doesn’t mean securing forgiveness through PSLF is easy. While we think the reports of a 99% rejection rate are a bit misleading, there is no doubt that borrowers will have to jump through some hoops to get their loans discharged.
The reason we give PSLF the top spot is because forgiveness can happen in as little as ten years. Additionally, a surprisingly large percentage of borrowers could be eligible due to its applicability to government and non-profit employers.
#2 Income-Driven Student Loan Forgiveness
Of all the forgiveness programs, the Income-Driven Repayment (IDR) program has the widest reach, with the potential to benefit the broadest group of borrowers. Under this program, the government bases the borrower’s payments on their discretionary income. After 20 to 25 years of payments, the government forgives the remaining balance. However, the IRS will treat the forgiven debt as taxable income.
There are several Income-Driven Repayment plans for borrowers to consider.
| Plan | Discretionary Income Required | Years Until Forgiveness |
|---|---|---|
| ICR – Income-Contingent Repayment | 20% | 25 |
| IBR – Income-Based Repayment | 15% | 25 |
| PAYE – Pay As You Earn | 10% | 20 |
| IBR for New Borrowers* | 10% | 20 |
| SAVE – Saving on A Valuable Education | 5 – 10% | 20 or 25** |
* New Borrowers are defined as those who started borrowing after July 1, 2014.
** Borrowers with graduate school debt will take 25 years to qualify, while those with undergrad debt can be eligible for forgiveness after 20 years.
Eligibility requirements for these different repayment plans can vary. Additionally, each plan comes with specific provisions that can impact a borrower’s decision. For example:
- ICR is the only repayment plan that those with Parent PLUS loans can use.
- SAVE has a special provision for borrowers whose payments are less than the monthly interest.
- IBR and PAYE both allow borrowers to file taxes separately from their spouses in order to lower their discretionary income. REPAYE does not allow this.
- PAYE is available only to borrowers who were new borrowers as of Oct. 1, 2007, and received a Direct Loan disbursement on or after Oct. 1, 2011.
Forgiveness under these plans requires a long-term commitment of at least 20 years, with payments based upon the borrower’s income during that time. Accordingly, the total financial cost for some borrowers – including the two decades of payments and the tax bill – might surpass the benefits of simply paying off the loans more aggressively.
Despite these challenges, IDR forgiveness ranks second in our evaluations because it is accessible to all federal loan borrowers without restrictions on the amount that can be forgiven. Eligibility does not depend on one’s job type or facing severe financial difficulties. Instead, borrowers must be prepared for a lengthy period of minimal payments
IDR forgiveness checks in at number two in our rankings because all federal borrowers it is accessible to all federal loan borrowers without restrictions on the amount of debt that can be forgiven. Eligibility doesn’t depend on the borrower’s specific job or require the borrower to suffer extreme hardship. Instead, borrowers only need to be willing to wait 20-25 years while making minimum payments on their loans.
Changes Coming to IDR: The SAVE repayment plan is currently being contested in the legal system and unlikely to survive in it’s current form.
It is possible that some provisions of the SAVE plan remain. Another possibility is that SAVE reverts back to the REPAYE plan. For now, this is a situation that borrowers will need to monitor.
#3 Employer Loan Forgiveness Programs
Coming in at number three in our list of top rated student loan forgiveness programs are employer assistance programs.
As demand for skilled labor is increasing, more companies are establishing programs to attract skilled workers. As the struggle to manage student debt continues, we expect the trend of offering employer-based student loan assistance to grow.
Most employers cap student loan assistance on a monthly or yearly basis. While these programs typically will not cover the entire debt, they can provide significant help with monthly payments.
If your employer doesn’t currently offer such a program, present it to them as an effective way to attract quality candidates for open positions. Discussing the creation of a loan repayment assistance program can also be a strategic part of salary negotiations.
Employer loan assistance programs rank highly on our list because they can provide nearly immediate financial relief.
#4 Borrower Defense Against Repayment
Borrowers whose schools misled them may be eligible to have their federal student loans forgiven through the Borrower Defense Against Repayment program.
If a Borrower Defense Against Repayment application is approved, the borrower can not only get their loans forgiven, they may also be reimbursed for payments already made on those student loans.
However, given the potentially enormous benefits available through this program, it should come as no surprise that successfully qualifying for it can be challenging. To qualify, the applicant must show that the school, through an act or omission, violated state law directly related to the federal student loan or to the educational services for which the loan was provided.
The Department of Education suggests that the following documents may be helpful in a borrower defense application:
- Documentation that confirms the school, enrollment dates, and program of study —such as transcripts, enrollment agreements, and registration documents
- Promotional materials from the school
- Emails with school officials
- Your school’s manual or course catalog
Borrowers can find the necessary applications and more details on the Federal Student Aid Borrower Defense page.
This forgiveness program ranks here because of the substantial relief it can provide. However, it only applies to a very limited number of borrowers, and qualifying can be difficult.
#5 School Closing
If your school shuts down, you might be eligible to have your federal student loans forgiven.
The criteria for this discharge are quite stringent. However, if successful, 100% of Federal Direct, FFEL, and Perkins loans could be forgiven.
Loans are eligible for forgiveness under this program only if one of the following applies:
* Your school closes while you’re enrolled, and you do not complete your program because of the closure.
* Your school closes within 120 days after you withdraw.
Further complicating matters is that, even if you meet one of the above requirements, you still might not be eligible for forgiveness if:
- You are completing a comparable educational program at another school
- through a teach-out agreement with the school,
- by transferring academic credits or hours earned at the closed school to another school, or
- by any other comparable means.
- You have completed all the coursework for the program, even if you have not received a diploma or certificate.
- You withdraw more than 120 days before the school closes.
To start the forgiveness process due to school closure, contact your federal student loan servicer responsible for the loans. The Department of Education has a page tracking the various school closings and specific details pertaining to those individual schools.
#6 Student Loan Forgiveness for Your Profession
There are some professions that offer student loan forgiveness options. However, most professions offer very little student loan relief. Furthermore, those that do offer help are often limited and/or competitive. Consequently, profession-based loan forgiveness checks in at number six on our list.
While the jobs and programs we discuss here are not exhaustive, they serve as examples of the more common and extensive forgiveness programs available across various fields.
The jobs and programs we have listed below are by no means exhaustive but should serve as examples of the many forgiveness programs out there. Here, we mainly focus on the most common professions with forgiveness programs and the programs that offer the most extensive forgiveness.
If you don’t see your profession listed below, taking some time to research may yield some positive results. Like scholarships, there is a multitude of forgiveness programs for many occupations.
Here, we will explore some forgiveness options for teachers, lawyers, military personnel, and nurses. Remember, many other career-specific programs exist, including programs for doctors, social workers, firefighters, librarians, and law enforcement. Some forgiveness programs even cater to Peace Corps and AmeriCorps volunteers, reflecting the wide range of opportunities that can be pursued depending on your career path.
Student Loan Forgiveness for Teachers
Most teachers are eligible for the Public Service Loan Forgiveness program. However, forgiveness opportunities aren’t limited to PSLF. Numerous other programs exist to help educators manage their student debt.
The Teacher Loan Forgiveness Program
The Teacher Loan Forgiveness program provides up to $17,500 for five years of teaching. Only Federal Direct and Stafford loans are eligible.
Basic Requirements:
- Teach for five years,
- Teach at a low-income school,
- Federal loans cannot be in default,
- Cannot have student loans from before October 1, 1998, and
- Must be a “highly qualified” teacher.
The “highly qualified” teacher requirement is where this program gets complicated. A borrower must have at least a bachelor’s degree and have received full state certification to satisfy this requirement. Borrowers on a provisional, temporary, or emergency certification will not meet the requirement. Beyond these basics requirements, additional requirements exist for particular grade levels.
Finally, the entire $17,500 is available only to math, science, and special education teachers. Under this program, the government offers only up to $5,000 to those that teach other subjects.
Borrowers interested in the program can find the full details and application instructions on the Department of Education Teacher Forgiveness page.
We should also note that participating in the Teacher Loan Forgiveness Program could impact PSLF eligibility. Though PSLF takes longer, the benefits can be far more significant. Teachers should carefully weigh their options before deciding which program to pursue.
Perkins Loan Cancellation for Teachers
The Perkins Loan Cancellation for Teachers program provides teachers a pathway to cancel up to 100% of their Perkins loans within five years.
Teachers are eligible for Perkins Loan Cancellation if they teach at a low-income school listed in this database.
Educators that don’t teach at a low-income school can still qualify if they teach any of the following subjects: mathematics, science, foreign languages, bilingual or special education, or any subject determined by the local state education agency to have a shortage of qualified teachers.
The following schedule provides a structured loan forgiveness, after which, forgiveness totals 100%:
- 15% canceled after the first year,
- 15% canceled after the second year,
- 20% canceled after the third year,
- 20% canceled after the fourth year, and
- 30% canceled after the fifth year of service.
For complete qualification requirements, be sure to check out the Department of Education page on Perkins Loan Cancellation.
State-Based Programs for Teacher Loan Forgiveness
Many states have their own teacher forgiveness programs aimed at recruiting new educators. These programs vary widely in terms of requirements, qualifications, and benefits, depending on the state.
The American Federation of Teachers maintains an extensive database of the State-Based Teacher Forgiveness Programs.
All teachers should investigate loan forgiveness programs in their state and even within their school district. Looking into these programs takes very little time, and the effort could be worth thousands of dollars.
Student Loan Forgiveness Programs for Lawyers
There are a surprising number of student loan assistance programs designed specifically for lawyers. Most student loan assistance for lawyers targets those working in public interest roles, such as prosecutors and public defenders. However, there are some programs that offer assistance to a broad cross-section of attorneys. Here’s an overview of some key programs and opportunities:
Law School Loan Repayment Assistance Programs (LRAPs)
Many law schools offer student loan repayment assistance to their graduates who are working in public service.
The availability and quality of these LRAPs varies from school to school. If there is any pattern, the higher-tier (more highly-funded) schools seem to provide the most robust repayment assistance. However, each school is different, and the terms are unique to each school.
The John R. Justice Student Loan Repayment Program
The John R. Justice Student Loan Repayment Program is a nationwide opportunity that offers repayment assistance to local and state prosecutors and local, state, or federal public defenders.
Repayment award benefits are capped at $10,000 per year and $60,000 in aggregate per attorney. Attorneys can use this repayment assistance for Federal Direct and FFEL loans only. Other loans, such as private loans and Parent PLUS loans, are not eligible. Participants must commit to continue working as prosecutors or public defenders for at least three years.
Though the federal government created the program, administration occurs at the state level. Further details on the program can be found here.
Employer Forgiveness and Loan Repayment Assistance
Many employers offer student loan assistance as an incentive to recruit and retain employees. This is especially true within the legal field.
Governments and private employers alike may offer these types of loan assistance. For example, federal employees may be eligible for their agency’s recruitment and retention programs that provide loan repayment assistance. The Office of Personnel Management has more details here. The Department of Justice also has a dedicated Attorney Student Loan Repayment Program.
Borrowers should inquire about student loan assistance when discussing a compensation package with a new employer. It is also probably worth sending a quick email to HR to check if your employer has a program.
State-Based Loan Repayment Programs
Most states also run programs aimed at encouraging lawyers to work as prosecutors or public defenders. These vary widely in scope and funding sources, with some supported by legislative appropriations and others by private donations.
The state bar association is typically a good resource for information on these programs.
Military Student Loan Forgiveness and Loan Assistance Programs
The men and women serving the country are eligible for a variety of excellent forgiveness and loan assistance programs.
Some of these programs are open to all members of the military. Others are dependent upon the branch of service or the nature of the work performed.
The Military College Loan Repayment Program (CLRP)
CLRP is a recruitment incentive program authorized by Congress designed to help enlistees who have already incurred student loan debt. All branches are eligible for participation in the program, as are some reserves.
Unlike many other loan repayment programs, the government pays the benefits directly to the lender or servicer of the student loan rather than the individual loan holder. The maximum benefit under the program is $65,000, but some branches impose lower limits.
Note, borrowers considering returning to school after their service should be careful. Participation can impact future GI Bill eligibility.
Those interested in this benefit should contact their recruitment officer for specific details and current recruitment incentives.
Active Duty Health Professions Loan Repayment Program
Healthcare professionals can qualify for special loan repayment programs through the military. Eligible professionals include doctors, nurses, optometrists, dentists, pharmacists, and veterinarians. However, only those that are fully licensed in their field are eligible for this program.
The benefit amounts for this program depend upon your specialty and branch of service, but they can be as high as $40,000 per year or $120,000 in total. These funds are available to pay down private student loans, which is relatively rare for student loan forgiveness programs.
For more details on this program, check out the appropriate page with the Army, Navy, or Air Force.
Other Military Repayment Assistance
Other laws and programs that exist to assist members of the military with their debt include:
Servicemembers Civil Relief Act (SCRA) Interest Rate Cap – The SCRA limits all student loan interest rates to 6% for active-duty military members. This limit applies to both federal and private student loans. Note, this applies only to debt incurred before your active duty start date. Loans consolidated or refinanced during active duty may not be eligible for the interest rate reduction. Contact your loan servicer for instructions on how to apply for this benefit.
0% Interest – Anyone serving in a hostile area that qualifies for special pay does not have to pay interest for up to 60 months on their Federal Direct student loans. This benefit applies to all Federal Direct loans issued after October 1, 2008.
Military personnel also have access to various deferments and simplified documentation processes, enhancing their ability to manage loan obligations while serving. The Department of Education has an excellent summary of the various military forgiveness programs and loan repayment privileges.
Student Loan Forgiveness for Nurses
Nursing is another profession for which current staffing levels do not fill the needs of society. As a result, numerous programs exist specifically for nurses to entice more individuals to enter the field.
Many nurses will find that they qualify for Public Service Loan Forgiveness due to their employer being either a government agency or an eligible non-profit. However, the forgiveness programs available to nurses go beyond PSLF.
Here’s an overview of some key loan forgiveness options available to nurses:
NHSC Loan Repayment Program
The NHSC Loan Repayment Program offers up to $75,000 in student loan repayment assistance. To qualify for forgiveness under this program, applicants must work at an NHSC-approved service site located in, designated as, or serving a Health Professional Shortage Area (HPSA).
The icing on the cake is that the financial assistance received is not considered to be taxable income. This tax treatment is very rare for these types of forgiveness opportunities.
Application information and eligibility details are on the HRSA website.
NURSE Corps Loan Repayment Program
The NURSE Corps Loan Repayment Program is available for full-time nurses who work in a Critical Shortage Facility (CSF) or at an accredited school of nursing. A CSF is a health care facility located in, designated as, or serving a primary care or mental health Health Professional Shortage Area.
This program will pay up to 60% of outstanding nursing education debt for nurses who make a two-year commitment. Furthermore, qualifying participants may earn an additional 25% forgiveness for participating an additional year. For nurses with more significant student debt levels, having forgiveness capped as a percentage of debt rather than a dollar limit could be particularly beneficial.
You can find full eligibility details and an application here. Those interested in the differences between the NHSC Loan Repayment Program and the NURSE Corps Loan Repayment Program will likely find this handout helpful.
State-Based Nursing Forgiveness Programs
Most states also have their own student loan forgiveness schemes to attract nurses. In some states, these benefits can exceed $100,000 in student loan forgiveness. However, the forgiveness amount and the requirements can vary significantly from one state to the next.
You can find a good compilation of the various state programs here. However, a quick Google search for nursing information in your state is probably the best way to find up-to-date program availability and benefits.
Perkins Loan Cancellation
Nurses, like teachers, may qualify to have up to 100% of their Federal Perkins Loans canceled.
15% of Perkins Loans can be canceled after years one and two, with 20% coming after years three and four. Finally, the remaining 30% is eligible for forgiveness after year five.
The Department of Education Perkins Cancellation page has some information on this program. However, borrowers will probably need to reach out to their school or school’s Perkins Loan servicer for application details and eligibility information.
#7 Student Loan Bankruptcy
Discharging a student loan in bankruptcy was once considered impossible or nearly impossible for most borrowers.
New bankruptcy rules now make a discharge possible.
Bankruptcy is still a complicated legal process that usually requires the help of an experienced attorney. However, under the new bankruptcy policy, many borrowers who are struggling with their loans can qualify to have some or all of their federal loans erased.
#8 Death and Disability Discharge(s)
Borrowers who die during repayment or become permanently disabled are eligible to have their federal student loans discharged, which means they no longer have to make payments.
Borrowers with private student loans may also be eligible for a similar discharge of the debt. However, eligibility varies from lender to lender. The loan contract will specify forgiveness requirements under these circumstances.
Parents who borrow Parent PLUS loans for their child can also have the debt forgiven if the parent or child dies.
Student Loan Discharge Due to Death – For a borrower, or parent in the case of Parent PLUS loans, to have the debt forgiven, the federal student loan servicer usually needs to be supplied with a copy of the death certificate. At that point, the federal government discharges the remaining balance in full.
Student Loan Discharge Due to Permanent Disability – For a borrower who has become permanently disabled to have their debt discharged, they must prove permanent disability. Federal servicer Nelnet handles disability discharge requests for all federal loans. Borrowers who are temporarily disabled or unable to work in their field are not eligible for a disability discharge.
Those who become disabled can prove permanent disability in one of three ways:
- Borrowers can submit documentation from the U.S. Department of Veterans Affairs (VA) showing that the VA has determined that they are unemployable due to a service-connected disability.
- Borrowers receiving Social Security Disability Insurance (SSDI) benefits can submit a Social Security Administration (SSA) notice of award for SSDI. Alternatively, borrowers receiving Supplemental Security Income (SSI) benefits can submit a notice stating that their next scheduled disability review will be within five to seven years from the date of their most recent SSA disability determination.
- Physicians can certify that a borrower is totally and permanently disabled. The physician must certify that the borrower is unable to engage in any substantial gainful activity because of a medically determinable physical or mental impairment that:
- Can be expected to result in death,
- Has lasted for a continuous period of not less than 60 months, or
- Can be expected to last for a continuous period of not less than 60 months.
Borrowers can find full details on the disability discharge process and an application here.
Finally, the rules regarding the taxation of death and disability discharge have recently changed. In the past, this form of loan forgiveness triggered a tax bill from the IRS. $50,000 of forgiven student loans counted as $50,000 of income. As of January 1, 2018, loans discharged due to death and disability are no longer taxed. However, this tax provision expires at the end of 2025.
When Forgiveness Options Fail
Qualifying for student loan forgiveness is great. However, the vast majority of borrowers will not be able to have their debt forgiven.
For the most part, the available forgiveness options are in place to help the borrowers in most need of assistance and to encourage educated individuals to take less lucrative jobs that benefit society. If you don’t fall under either of those categories, student loan forgiveness could be a long shot.
Borrowers who are sure they will be paying back their loans in full can look to student loan refinancing as an option to reduce their spending. Refinancing debt will take most forgiveness programs off the table, but it can also dramatically lower interest rates.
There are several refinance options:
| Lender | Interest_Rates_ | Loan_Amounts____ |
|---|---|---|
|
4.39%* – 9.99% | $5,000 – No Max |
| Splash Financial Review: Splash has competitive rates, but they start slightly higher than the top lenders. Splash also offers unique 8 and 12 year repayment terms. | Application + Up to $500 Bonus |
|
|
4.86% – 8.44% | $10,000 – No Max |
| ELFI Review: ELFI routinely offers excellent interest rates. Even though ELFI is new, it is the product of a regional bank that has been in business for decades. | Application + $150 Bonus |
|
|
3.95% – 9.74%^ | $5,000 – No Max |
| Earnest Review: The rates advertised by Earnest are among the best, but in head to head comparisons, Earnest often falls short in actual rates offered. Earnest scores points because it has by far the most flexibility on loan repayment length. | Application + $150 Bonus^ |
|
|
4.82% – 9.12% | $5,000 – $300,000 |
| LendKey Review: LendKey partners with local banks and credit unions to provide their loans. The end result is competitive rates provided by local reputable businesses. | Application + $150 Bonus |
|
Whether by qualifying for forgiveness or by refinancing, most borrowers can find some student loan savings if they chase down the right opportunity.