The Top Ways To Get Student Loan Forgiveness

Ways To Get Student Loan ForgivenessStudent loans can be a great investment in your future, or can be a huge burden if not fully thought out or abused. If you currently have a student loan or are thinking about getting student loans, you should know that student loans CANNOT discharged in bankruptcy. This means that they will stick with you for the rest of your life, unless you pay them off, or, if you are lucky enough, qualify for student loan forgiveness. Before going further, check out my Student Loan Calculator and read my post on Getting Out From Student Loan Debt for some other ideas on student loan debt.

Under certain circumstances, all or part of your student loan can be canceled in a process called Student Loan Forgiveness. To qualify, you must perform volunteer work, perform military service, practice medicine in specific communities, or meet other criteria.

The great thing about student loan forgiveness, unlike other debt, is that the amount forgiven is NOT treated as taxable income.

Remember, if you want specific help, check out our program Ditch Your Student Loans. Also, the list below is just for Federal student loan forgiveness programs. If you want to see if your State offers any programs, check out this tool: Student Loan Forgiveness by State.

Public Service Loan Forgiveness

The #1 way to currently get student loan forgiveness is to work in public service for 10 years. President Obama announced the PSLF – Public Service Loan Forgiveness Program, which will grant student loan forgiveness on qualifying loans after 120 payments (10 years).

The great thing about public service is that the definition is very broad. Qualifying employment is any employment with a federal, state, or local government agency, entity, or organization or a not-for-profit organization that has been designated as tax-exempt by the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code (IRC). The type or nature of employment with the organization does not matter for PSLF purposes.

For example:

  • Government Workers (Federal, State, Local)
  • Emergency management
  • Military service
  • Public safety or law enforcement services
  • Public health services
  • Teachers
  • Public education or public library services
  • School library and other school-based services
  • Public interest law services
  • Early childhood education
  • Public service for individuals with disabilities and the elderly

The organization must not be a labor union or a partisan political organization.

If you want to learn more about PSLF and how you can apply, check out our program – Ditch Your Student Loans.

Volunteer Work

While some volunteer work can be a huge life commitment, organizations such as VISTA all you to have a semblance of life while volunteering. They also offer money to be used towards your student loan debt, which is great!

Peace Corps – If you volunteer for the Peace Corps, you get automatic deferment of Stafford, Perkins, or Consolidation loans. You can also get partial cancellation of Perkins Loans based on the number of years of service. Currently, you get 15% per year, with a max of 70%.

Americorps – If you serve for 12 months, you can receive $4,725 towards your student loans.

Volunteers in Service to America (VISTA) – If you volunteer for 1,700 hours, you can receive $4,725 towards your student loans.

Military

The military currently has a Student Loan Repayment Program. Each year, 15% of the student loan balance will be repaid by the program, up to the branch maximum. The current maximums are:
Army – $65,000
Army Reserve – $20,000
Navy – $65,000
Air Force – $10,000

To qualify, you must request this program at the time of enlistment or reenlistment. Also, you must score 50 or higher on the Armed Forces Qualifications Test.

Teaching

Students who become full-time teachers in an elementary or secondary school that serves low-income families can have a portion of their Perkins Loan forgiven. This program forgives 15% of your loan in each of the first and second years, 20% in each of the third and fourth years, and the remaining 30% in the fifth year.

This program will be phased out in lieu of Public Service Loan Forgiveness.

Legal Studies

Many law schools forgive the student loans of students who serve in the public interest or for non-profits. These loan repayment assistance programs provide loan repayment or forgiveness, lower interest rates on loans, or postponed payment schedules. Most programs have income limitations and specify which types of employment qualify.

Furthermore, many 23 states offer loan repayment assistance programs: Arizona, District of Columbia, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Montana, New Hampshire, New Mexico, New York (two programs), North Carolina, Ohio, Oregon, South Carolina, Texas, Vermont, and Virginia.

For more information, check out the American Bar Association’s website on Loan Repayment Assistance Programs.

Medical Studies

If you are a medical student, there are several options available for student loan forgiveness.  While a career in health care and other medical services is always in demand, everyone knows that tuition for school can get very expensive, even if you are taking online courses. The thought of the burden caused from student loans can be daunting when considering pursuing a career in nursing. But forgiveness programs like the ones below offer some peace of mind knowing that you can go after that Master’s degree in nursing and help those in need of medical care without the fear of what is to come after graduation.

The U.S. Department of Health and Human Services offers loan forgiveness programs through two programs:

National Health Service Corps: Complete a five-year commitment to providing medical care in “needed” areas, and you can receive up to $170,000 in loan forgiveness.

Nursing Education Loan Repayment Program: For two years of nursing service at a qualifying non-profit, you can have 60% of your loan forgiven. There is also an optional third-year, where you can have an additional 25% forgiven.

If you are interested in research, the National Institute of Health offers a loan forgiveness program that repays up to $35,000 each year for qualifying research at either a non-profit or university, as well as directly at the National Institute of Health.

If you are interested in veterinary medicine, the U.S. Department of Agriculture offers a Veterinary Medicine Loan Repayment Program where you can receive loan forgiveness of $25,000 per year for three years, as long as you work in a designated area.

Finally, many individual colleges offer different types of loan forgiveness programs, so check with your local college.

Other Options

If you haven’t done so yet, make sure that you download my free eBook on Student Loan Debt below.

And finally, for a small price, I highly recommend this book: Student Loan Debt – Getting In Smart, Getting Out Painlessly. Check it out.

Opt In Image
Free Investing Video Training Series

Enter your email for a FREE video series where Robert shows you EXACTLY what you need to do to get started, along with extremely helpful tips and tactics.


Comments

  1. says

    Unfortunately none of the above applies to me. But at least student loans have a nice defferment program in case you lose your job. Also, payments don’t kick in (if I remember correctly) for the first six (or is it 3?) months after graduation.

  2. hairbear says

    I read one time, if your income was at the level for a federal loan you could transfer it to a federal loan. Is that true.

  3. Mom Cents says

    Welp ~ I guess I’m stuck with my loans! I did get them consolidated under a pretty low interest rate almost 10 years ago. I’ve got a game plan to speed up repayment and be done in 3 years….so I’m excited about that!

  4. Zoulad says

    I have a private student loan from Chase at 14% INTEREST. Everytime I call to work something out, I keep getting the run around. I mean, it’s mind blowing that I made that stupid mistake. I m tryting to get a lower rate and reduce the payments, any help please ?

    • Dave says

      Try using a credit union to refinance. I did that with USSFCU and worked with lendkey to get a much lower rate.

  5. chelsie says

    I am a nurse where do i look for the programs you mentioned for nursing. I have about $40k in student loans and the payments are a huge burden.

  6. George says

    My wife has student loan that has buried us for that last 30 years. I became disabled 4 years ago with Multiple Sclerosis which makes it hard for us to pay the loan and other things. Can her school loan be forgiven being that her husband (me) is disabled and not able to work? Thanks for your time.

  7. Holly says

    I applied for the teacher loan forgiveness program but was denied. I had a federal loan prior to 1998 so event though I am a special education teacher in a low income urban district I don’t qualify. Do you have any suggestions for getting around this stipulation?

  8. Kevin says

    I have a disability that will last forever unless a doctor creates a miracle drug to cure anyone with my disability, I am sure, I will have it forever. I am currently on SSDI and can provide paperwork if needed and also provide doctors certification if needed. Is there any student forgiveness programs for Students with Disabilities.

  9. Janeen says

    I have subsidized and unsubsidized loans. Graduated with my medical assisting degree, not certified. I couldn’t pass the test. Plus my college has a bad rep so I can’t find a job. Is there loan forgiveness for that, not being able to get a job in you field? Thanks for your time.

    • says

      Sorry there is not student loan forgiveness simply because you cannot get a degree in your field. It was your choice to attend that school and get that type of job. Your best bet is to study hard for the test on your own, pass it, and get a good job. Because no matter what you do, you’re going to have to pay these loans one way or another.

  10. says

    I was wondering if your 10 years of public service could be part time? I have worked as a federal employee (forest fire fighter and wilderness trail crews) for the last 10 years, seasonally.

      • Terry Haston says

        I have been a full time firefighter for 26 years. I have a federal student loan in my name for my son’s college. He has been a full time firefighter for 5 years. Can I get loan forgiveness after 120 payments?

  11. rachel says

    I am a speech language pathologist working with special education kids in a public school that qualifies under Title 1, will I qualify for loan forgiveness after five years?

  12. Mariela says

    What if I were to work at a non profit organization full time for a couple of years and transition to a teacher in a low income school, could those years combined make up for the 10 years? I hope that makes sense.

  13. Merrill says

    My daughter has her Masters in Marrige and Family counseling. She is working for the state as a substance abuse counselor. Are there any loan assistance or forgiveness plans?

  14. Jonathan says

    “Volunteers in Service to America (VISTA) – If you volunteer for 1,700 hours, you can receive $4,725 towards your student loans.”

    That works out to be $2.78/hr. Probably not the most efficient way to pay off your student loans.

  15. Tom says

    You mentioned that “The great thing about student loan forgiveness, unlike other debt, is that the amount forgiven is NOT treated as taxable income.” I know President Obama’s Administration has proposed this as new policy in March 2015 but I haven’t heard if it has went through. Did they recently pass this proposal into policy to have student loan debt forgiveness non-taxable? Also is this for all federal student loans that are forgiven or is it just for students who use the special payment plans. Can a student who is in default receive non-taxable student loan forgiveness as well? Do you know if there is a good online reference for this info?

    Thanks

    • says

      Hi Tom, the student loan forgiveness plans referenced on this page (PSLF, Teacher Loan Forgiveness, Law School assistance, and Public Health Care assistance) are all non-taxable. Here’s another article detailing it: http://www.finaid.org/loans/forgivenesstaxability.phtml

      However, many other student loan forgiveness programs, including the “secret student loan forgiveness programs” we covered are taxable. These are programs that are involved with repayment plans. Also, any “student loan discharges”, such as a discharge for death or permanent disability, is taxable income.

      If you are in default, you cannot qualify for any student loan forgiveness program. You must rehabilitate your loans first before being eligible.

      As for a resource, I’d like to think we’re the best resource online for this info. I also offer a DIY coaching program to help you with your loans, and one-on-one coaching as well. You can find out more here: Ditch Your Student Loans.

  16. Josh says

    HI,

    I have a 40,000 dollar loan from ASU in Social and Behavioral sciences and am currently working on my MBA from GCU in Arizona. Is there any help to pay off my loans? I do IT work and can only pay the minimum…

  17. Lisa says

    I have debt from getting my bachelors degree in teaching. I teach math at a middle school. I currently am paying my loans back under the loan forgiveness program and have made 12 payments out of 120. I want to get my masters in math education but am scared to take out more loans. Will the loans I take out jump on board with my current payback plan or can masters degree loans even qualify for loan forgiveness? I do not need 2 payments!!!!

    • says

      It depends on the type of loans you get. But before you even consider that, please ask yourself – how much more money will you make by getting a master’s degree and how much will it cost? If it doesn’t boost your income enough to pay for itself in less than 5 years, it’s simply not worth it, and I highly recommend you not do it. While education is great, unless you can truly afford it, you’ll just be miserable in life dealing with your loans.

  18. Stephanie H. says

    I taught for 5 years in a Title 1 school and received $5,000 toward my loan. I stopped teaching after 7 years to stay at home and now homeschool. I still owe close to 33k in loans and was told if I had worked for 3 more years I could have had them forgiven. :( I am very passionate about homeschooling my kids. Is there anything I can do?

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>