There is more than $1.3 trillion in outstanding student loan debt weighing down personal balance sheets for recent (and not so recent) college graduates. Fortunately, there are many state and federal programs that help people manage this loan burden by getting part of their student loan debt forgiven
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is the largest forgiveness program. It is a federal government plan available to you if you have federal student loans and are working for a qualifying institution anywhere in the US.
You qualify for PSLF if your employer is any level of government organization, any 501(c)3 non profit, or a private company that provides public services. The full list is provided by Studentaid.gov, and Gradible’s student loan evaluation tool can help you determine if your organization qualifies.
To participate in PSLF, you also need to have federal loans issued through the Direct Loan Program. Federal loans issued through the FFEL program (prior to 2010) or Perkins program loans, private loans, and Parent PLUS loans your parents took for you unfortunately do not qualify. If you have FFEL and Perkins government loans, you can consolidate these loans into the Direct Loan Program at no cost to gain eligibility, just be sure not to consolidate any Direct Loans you already have, because you would lose qualifying payments on those loans. The final step to PSLF is being enrolled and making payments on an Income-Driven repayment plan, because you can only receive the PSLF benefit after you have made 120 qualifying payments (ten years) on your student loan.
If you meet those 3 broad qualifications, you need to file a Certification of Employment to demonstrate that your employer is in fact qualifying. All qualifying payments you have made after July 1, 2007 count toward your 120 needed payments, so the first people eligible for PSLF can claim their benefits in August of 2017.
State Level Forgiveness
Many states offer programs that provide an annual amount of debt forgiveness for specific types of jobs that are in high demand and benefit the community. New York is even beginning to offer its “Get on Your Feet” plan, which covers the income-based federal student loan payment for state residents making less than $50, 000.
Not all states offer student loan forgiveness, but those that do tend to focus on occupations in health services, education, social work, veterinary services, and legal work. Gradible offers a comprehensive list of state level student loan forgiveness plans in our student loan evaluation tool. To claim state level benefits, you need to fill out an application with your state’s higher education authority and follow any additional instructions they provide.
Perkins Loan Cancellations
Perkins Loans are loans made by colleges and universities to students with financial need. These loans are eligible for cancellation if you are employed in a public service field, such as education, active duty military, health services, and public safety, among others. If you think you might be eligible for Perkins Loan cancellation, check out the full list here.
The National Guard, Army, the Air Force, and the Navy all offer student loan forgiveness options for those serving who have student loans. There are also additional programs for former servicemen and women who enter the health services field. As mentioned previously, if you served in the military in active duty, you are also eligible to have your Perkins Loans cancelled.
Income-Driven Repayment Forgiveness
Finally, you can get your remaining balance on your student loans forgiven after 20 to 25 years of on-time payments on an Income-Driven Repayment plan, such as “Income-Based Repayment” or “Pay As You Earn”. Any amount you have left after paying for those periods will be eliminated, but keep in mind that the balance forgiven will be treated as taxable income.