Student loans are often seen as necessary tools to achieve the education and skills needed to thrive in your chosen career field. Borrowers learn how to get a loan to pay for higher education so they can progress toward their goals better or quicker than they may otherwise have been able to afford.
Because a student loan is technically borrowed money, you’ll have to pay it back at some point — at least that’s how it typically works. But in some cases, student loan borrowers may qualify for student loan forgiveness or discharge and not have to repay the loan or only be required to repay some of it.
In this guide, we’ll explain how the different types of loans work and how to get rid of student loan debt within each loan category.
Student loan forgiveness
Student loan forgiveness is a circumstance in which you may no longer have to pay off your loan. If you qualify for a particular loan forgiveness program, you must follow the terms of the program exactly to have your loan forgiven.
Some programs will forgive up to a certain amount of the loan, whereas others may forgive the loan completely, but only after you’ve made a number of qualifying payments yourself. If you have private student loans, you likely won’t qualify for any federal student loan forgiveness programs.
Public service loan forgiveness
Public service loan forgiveness program (PSLF) offers loan forgiveness for individuals employed by a government or a not-for-profit organization. PSLF will completely forgive the remaining balance on your federal direct loans if you qualify for the program and follow its terms.
To be granted public service loan forgiveness, you must make 120 qualifying monthly payments on a qualifying repayment plan while maintaining a full-time position for a qualifying employer. Your loans must also be direct loans or other federal loans that have been consolidated into a direct loan program.
Any level of government organization — federal, state, local, or tribal — counts as qualifying employment. Full-time AmeriCorps or Peace Corps volunteers would also count as qualified employment for PSLF.
For more info and to see whether you qualify, visit the Federal Student Aid PSLF webpage.
Teacher loan forgiveness
Teacher loan forgiveness is available if you have direct loans and/or federal family education loan (FFEL) program loans. To qualify for the teacher loan forgiveness program, you must teach full time for five complete and consecutive years in a qualifying educational institution. This includes low-income elementary and secondary schools, plus educational service agencies.
Teacher loan forgiveness can forgive up to $17,500, but this benefit cannot be combined with benefits from PSLF. Read more about these requirements on the Federal Student Aid website.
Nurse loan forgiveness
Nurses may qualify for student loan forgiveness through these programs:
- Nurse Corps loan repayment program: This repayment program pays up to 85% of unpaid nursing education debt for qualified registered nurses, nurse faculty, and advanced practice registered nurses. To be eligible, you must agree to work full time for two years in a critical shortage facility or as nurse faculty in a school of nursing.
- NHSC loan repayment program: In exchange for two years of service at an NHSC-approved site in a health professional shortage area, this program offers up to $50,000 in loan repayment assistance.
- Perkins Loan cancellation: In this program, you can cancel up to 100% of the original loan amount in exchange for five years of eligible full-time service as a nurse.
- PSLF program: If your nursing career involves the public sector, you may qualify for complete loan forgiveness through the PSLF program.
Other career-based loan forgiveness
In addition to nurses and teachers, student loan forgiveness is also available to a variety of other individuals based on their chosen careers. Here are a few other jobs that offer student loan forgiveness:
- Automotive professional: The Specialty Equipment Market Association (SEMA) offers a SEMA loan forgiveness opportunity to qualified SEMA member company employees.
- Doctor: Doctors can apply for many loan forgiveness programs, including the National Institutes of Health loan repayment program.
- Firefighter: Firefighters can qualify to have up to 100% of their federal Perkins loans canceled in exchange for five years of qualifying service.
- Health professional with Indian Health Services (IHS): With the IHS loan repayment program, IHS health professionals can qualify for up to $40,000 of loan repayment for eligible service in health facilities serving American Indian and Alaska Native communities.
- Law enforcement or corrections officer: Law enforcement or corrections officers can qualify for the Perkins loan cancellation program to cancel 100% of their loans after five years of eligible service.
- Lawyer: Lawyers have access to multiple loan forgiveness programs, including the PSLF, Perkins loan cancellation, and the attorney student loan repayment program from the Department of Justice.
- Veterinarian: Veterinarians, like other health professionals, have access to various loan forgiveness programs. This includes the veterinary medicine loan repayment program from the National Institute of Food and Agriculture.
Military members can receive forgiveness on some of their student loan balances through the Perkins Loan cancellation or the PSLF. Certain branches of the military may also offer loan forgiveness options, like these:
- Army college loan repayment program
- National Guard student loan repayment program
- Navy student loan repayment program
- Air Force Judge Advocate General’s Corps student loan repayment program
Check your military branch’s website to find specific details on the student loan forgiveness programs available to you.
Income-driven repayment forgiveness
Income-driven repayment options are designed to make your student loan monthly payments more affordable than the standard repayment plan by basing your payments on your income and family size. Depending on your situation, this could mean you have no monthly payment at all. The repayment period on these plans typically lasts between 20 and 25 years.
Income-driven repayment plans include these four plans:
- Revised pay-as-you-earn (REPAYE) plan: A pay-as-you-earn plan where your monthly payments are generally equal to 10% of your discretionary income divided by 12.
- Pay-as-you-earn repayment plan (PAYE): A pay-as-you-earn plan that applies only to direct loans. Monthly payments are typically equal to 10% of your discretionary income divided by 12.
- Income-based repayment plan (IBR): Income-based repayment plans generally have monthly payments of 15% (10% for new borrowers) of your discretionary income divided by 12.
- Income-contingent repayment plan (ICR): With an income-contingent repayment plan, you pay the lesser of 20% of your discretionary income divided by 12 or the amount you’d pay on a repayment plan with a fixed monthly payment over 12 years, adjusted for your income.
Note: Discretionary income for income-based repayment and pay-as-you-earn plans is the difference between your annual income and 150% of the poverty guideline for where you live and the size of your family. For income-contingent repayment plans, it’s the difference between your annual income and 100% of the poverty guideline for where you live and the size of your family.
Visit the income-driven repayment plans webpage on the Federal Student Aid website for more information about student loan repayment assistance.
State forgiveness programs
Many student loan forgiveness programs also exist on the state level, though the plans will be different in each state. For example, California offers the California state loan repayment program, which is designed to help health care professionals pay off their student loans. Georgia, though, offers the physicians for rural areas assistance program. This program is specifically for physicians who are willing to work in rural areas of Georgia.
To find out more about what programs your state offers, use a web browser to search for your state name and “student loan forgiveness.” This should give you some options that are specific to your state.
Discharging your student loan
If your student loan is discharged, it likely means you’re no longer required to make payments on your loan because of specific circumstances. The U.S. Department of Education may choose to discharge your loan because of things like a permanent disability, a school closure, or other circumstances considered to constitute an undue hardship.
Here are common reasons why your federal student loans may be discharged:
- Closed school discharge: Your school closes while you’re enrolled or not long after you’ve withdrawn.
- Perkins loan discharge: Your Perkins Loan may be discharged because of bankruptcy, death, school closure, a service-connected disability (veterans), spouse of a 9/11 events victim, or total and permanent disability.
- Total and permanent disability discharge: You have a total and permanent disability.
- Total and permanent disability discharge for veterans: You have a total and permanent disability connected to your military service.
- Discharge due to death: The borrower of the loan or the student on whose behalf the loan was taken out has died.
- Discharge in bankruptcy: You’ve declared bankruptcy. This isn’t an automatic process and you still may not qualify for a student loan bankruptcy discharge.
- Borrower defense to repayment: The school you took out a loan to attend did something misleading or violated certain state laws in relation to your loan or the educational services your loan was funding.
- False certification discharge: The school you attended falsely certified your eligibility to receive a loan.
- Unpaid refund discharge: After withdrawing from a school, the school didn’t return loan funds to the loan servicer.
Employer-based student loan assistance programs
The federal government isn’t the only one helping people get rid of student debt. Many employees have begun to offer student loan assistance programs to entice prospective talent to come work for them or to keep their current talent from leaving. Because the average student loan debt is more than $30,000, it makes sense for newly graduated students to seek out this unique opportunity.
This benefit is typically very straightforward. For example, Fidelity has offered its eligible employees the option to participate in its Step Ahead Student Loan Assistance Program. This program provides up to $10,000 per qualified employee to help pay off student loans. Employees at SoFi can receive $200 per month to help with student loan payments.
Each company that offers this benefit will have different terms and conditions, but if you qualify for an employer-based student loan assistance program, it’s sure to be worth it. Any funds that go toward paying down student debt can cut massive amounts of time and money out of your total debt equation. This can free you up to focus on other important aspects of your life.
Student loan refinancing
If you don’t qualify for student loan forgiveness, cancellation, or a discharge, your best option may be a student loan refinance. Many types of student loans aren’t eligible for loan forgiveness, but you’ll likely still be eligible for student loan refinancing whether you have federal loans, private loans, or a combination of both.
The point of refinancing a student loan is to get better terms on a new loan than your existing loan has. This may include combining multiple loans into one, which can help you better manage your debt. Or you may be able to lower your interest rate, which could help you crush student loan interest costs.
The best part? Refinancing student loans is simpler than you might expect. If you use a comparison site to look at different lenders, it’s easy to shop around and find the best rates for your new loan. Even better, these comparison sites typically do only a soft credit check to your credit report to pre-qualify you so you can see your loan options. That means you can do plenty of research and your credit won’t take a hit.
If refinancing is the strategy you plan to take, then the best way to prepare for it is to start working on your credit score right now. The better your credit, the better deals you’ll get offered from lenders.
Budgeting and paying it off
Whether you refinance your student loan or receive some level of debt forgiveness, the odds are you’ll still have to pay off some amount of your loan at some point. And for federal student loan borrowers who can’t qualify for any sort of forgiveness, cancellation, or discharge, the foremost method of making that debt go away is simply budgeting and paying it off.
It’s not always easy to manage your debt, but here are some quick tips to help you get started:
- Prioritize your student loan. The fastest way to pay off your student loan debt is to make sure you’re paying it down as much as possible. Don’t get sidetracked by spending money on things you don’t need right now. Focus on paying off your loan.
- Pay more than the minimum. As you prioritize your student loan and refrain from making unneeded purchases, you’ll have more money to use toward your loan payments. If you plan to pay more than the minimum monthly payment, you’ll easily start chipping away at your debt.
- Start a side hustle. If you want to make extra cash, there are plenty of side hustles, part-time jobs, and other methods to choose from. Make deliveries with DoorDash, earn rewards from receipts with Fetch, or use a survey site to earn money taking online surveys.
Although loan forgiveness and other options may sound like excellent opportunities, you may still be liable for taxes if your debt is forgiven or discharged. This tends to put a damper on the clean escape many were hoping to achieve with a debt forgiveness program. You also may not be eligible for debt forgiveness if you’ve defaulted on your loans.
Overall, the best option for most people to get rid of student loan debt is by refinancing and budgeting. It may not be the quick getaway from debt we all hope for, but these strategies can help reduce the amount of time you’re in debt by a fair margin. If you’re struggling with your debt, consider refinancing and creating a simple budgeting plan to get rid of student loan debt once and for all.