What determines whether you can get student loan forgiveness
Student loan forgiveness in 2024 depends almost entirely on which federal program you work in or which repayment plan you're on. There is no single forgiveness program that covers all borrowers. The main routes are Public Service Loan Forgiveness (PSLF) for government and nonprofit workers, income-driven repayment forgiveness after 20 to 25 years of payments, and teacher forgiveness programs for educators in low-income schools. Each has different income limits, employment requirements, and loan types that count.
The Biden administration's broad forgiveness plan announced in 2022 faced legal challenges and did not move forward as originally described. Some borrowers received partial relief through limited programs, but there is no blanket forgiveness for all federal student loan holders. What is available now are the established programs that have existed for years, plus some newer targeted relief for specific groups.
Key Takeaways
- Public Service Loan Forgiveness forgives remaining balances after 120 may have access to payments if you work full-time for a government agency or nonprofit organization.
- Income-driven repayment plans forgive remaining balances after 20 to 25 years of payments, depending on the plan, regardless of your employer.
- Teacher loan forgiveness covers up to $17,500 for teachers in low-income schools who have made 60 months of payments.
- Borrower Defense to Repayment may forgive loans if your school closed or defrauded you, and you must submit a claim to the Department of Education.
- Permanent disability discharge forgives loans if you are totally and permanently disabled, verified through Social Security or the VA.
Public Service Loan Forgiveness (PSLF) requirements
PSLF forgives the remaining balance on Direct Loans after you make 120 may have access to monthly payments while working full-time for a government employer or a nonprofit organization with 501(c)(3) status. You must be on an income-driven repayment plan or the Standard 10-year plan. Private loans do not count, and Parent PLUS loans only count if you consolidate them into a Direct Consolidation Loan first.
Your employer must be a federal, state, or local government agency, or a nonprofit that is tax-exempt under section 501(c)(3) of the Internal Revenue Code. Schools, hospitals, and charities typically may have access to. You can check your employer's status through the IRS Tax Exempt Organization Search tool. The 120 payments do not have to be consecutive, but they must be made on time while you are employed full-time (at least 30 hours per week) at a may have access to employer.
The Public Service Loan Forgiveness Limited Waiver, which ended in October 2023, allowed some borrowers with past payment gaps or wrong repayment plans to count those months retroactively. If you did not submit a waiver application before the deadline, those months no longer count. Going forward, only payments that meet the current rules will count toward the 120.
Income-driven repayment forgiveness after 20 to 25 years
If you are on an income-driven repayment plan — Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), or Income-Contingent Repayment (ICR) — any remaining balance is forgiven after you make 20 or 25 years of payments, depending on the plan. REPAYE and PAYE forgive after 20 years if you borrowed only for undergraduate study, or 25 years if you borrowed for graduate or professional school. IBR and ICR forgive after 25 years regardless of loan type.
Your monthly payment on an income-driven plan is calculated based on your discretionary income, which is your adjusted gross income minus 150 percent of the federal poverty line for your family size. If your income is very low or you have a large family, your payment could be as low as $0 per month. You still must recertify your income and family size every year, or your plan will end and you will revert to Standard repayment.
There is no income cap to use these plans, and they work for any federal Direct Loan or FFEL Loan (though FFEL loans must be consolidated into Direct Consolidation Loans first). Parent PLUS loans do not may have access to for income-driven forgiveness unless consolidated. The forgiveness amount is taxable income in the year it occurs in most cases, though there is a temporary tax exemption through 2025 for forgiveness under PSLF and income-driven plans.
Teacher loan forgiveness and educator programs
Teachers in low-income schools can have up to $17,500 of their Direct Loans or FFEL Loans forgiven through the Teacher Loan Forgiveness program. You must have made 60 consecutive monthly payments on your loans, taught full-time for five consecutive school years at a school that serves low-income students, and still be employed as a teacher at the end of the five years. The school's location and student population determine whether it qualifies, and you can check the Federal Student Aid website for a school lookup tool.
Some states also run their own teacher forgiveness programs with different terms. For example, some states forgive $5,000 to $10,000 for teachers in rural areas or high-need subjects like math and science. You can work with your state's Department of Education to learn what programs exist in your state. These are separate from the federal program and have their own application processes.
Teachers who also work in a may have access to nonprofit or government position may be able to pursue PSLF instead, which could forgive a larger amount. You cannot use both programs for the same loans, so compare the forgiveness amount and timeline for each before deciding which to pursue.
Borrower Defense and school closure forgiveness
If your school closed while you were enrolled or shortly after you left, or if the school defrauded you, you may be able to have your loans forgiven through Borrower Defense to Repayment. You must submit a claim to the Department of Education describing how the school's actions harmed you. The Department investigates and either approves or denies your claim. If approved, your loans are forgiven and you may receive a refund of payments you already made.
School closure forgiveness applies automatically if your school closed on or after January 1, 2015, and you were enrolled within 120 days before closure or did not complete your program because of the closure. You do not need to submit a claim for closure forgiveness — the Department of Education identifies borrowers and processes the forgiveness. However, if your school closed before 2015, you must submit a Borrower Defense claim to be considered.
The timeline for Borrower Defense claims varies widely. Some claims are approved within months, while others take years. You can check the status of your claim through the Federal Student Aid website using your FSA ID. While your claim is pending, your loans remain in repayment unless you request a forbearance or deferment.
Permanent disability discharge
If you are totally and permanently disabled, you can have your federal student loans discharged. Total and permanent disability is defined by the Department of Education as a condition that prevents you from working and earning income. You must provide documentation from the Social Security Administration (SSA), the Department of Veterans Affairs (VA), or a physician licensed in your state.
The easiest route is if you already receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits. The Department of Education can verify your status directly with the SSA, and you do not need to submit additional medical records. If you do not receive SSA benefits, you can submit documentation from the VA showing a 100 percent disability rating, or a physician's statement on letterhead describing your condition and why it prevents you from working.
Once your discharge is approved, your loans are forgiven and you receive a refund of payments made in the past three years. There is a three-year monitoring period after discharge during which you can request reinstatement of your loans if your condition improves and you return to work. After three years, the discharge becomes permanent.
Frequently Asked Questions
Can I get forgiveness if I have private student loans?
No. Forgiveness programs only cover federal student loans. Private loans are not may be able to access for any federal forgiveness program. Some private lenders offer their own discharge programs for disability or school closure, but these are rare and vary by lender. Contact your private loan servicer to ask what options may be available.
What happens to the forgiven amount for taxes?
Forgiveness is generally treated as taxable income, meaning you may owe federal income tax on the amount forgiven. However, there is a temporary exemption through December 31, 2025, for forgiveness under PSLF and income-driven repayment plans. After 2025, forgiveness will be taxable again unless Congress extends the exemption. Check with a tax professional about your specific situation.
Do I have to be on a specific repayment plan to get PSLF?
You must be on an income-driven repayment plan or the Standard 10-year plan. If you are on a different plan, such as Graduated or Extended repayment, your payments will not count toward the 120 required. You can change plans at any time through your loan servicer's website, and the change takes effect the following month.
Can I count payments I made before I knew about PSLF?
Only if you meet the current requirements at the time those payments were made. Payments made while you were not working full-time for a may have access to employer, or while you were on the wrong repayment plan, do not count. The Limited Waiver that ended in October 2023 allowed some retroactive counting, but that option is no longer available.
What if my employer is a nonprofit but not 501(c)(3)?
Only 501(c)(3) nonprofits count for PSLF. Other nonprofit structures, such as 501(c)(4) social welfare organizations or 501(c)(6) trade associations, do not may have access to. You can verify your employer's tax status through the IRS Tax Exempt Organization Search. If your employer does not may have access to, you cannot use PSLF, but you may still be able to use income-driven repayment forgiveness after 20 to 25 years.