Who qualifies depends on which forgiveness program you're looking at

There is no single student loan forgiveness program with one set of rules. The federal government runs several different programs, each with its own income limits, loan types, employment requirements, and timelines. Public Service Loan Forgiveness (PSLF) requires you to work in government or nonprofit jobs. Income-Driven Repayment (IDR) forgiveness lets you pay based on what you earn, then forgives the rest after 20 or 25 years. Temporary programs like the SAVE plan have their own thresholds. You may may have access to for one program but not another, or for multiple programs at once.

The most important step is identifying which program matches your situation — your job, your income, your loan type, and how long you've been repaying. This guide explains the main programs and who they cover. You'll need to check the details against your own circumstances, because the rules are specific and they matter.

Key Takeaways

  • Public Service Loan Forgiveness requires you to work full-time for a government agency or a nonprofit organization recognized by the IRS, and to make 120 may have access to payments while enrolled in an income-driven repayment plan.
  • Income-Driven Repayment forgiveness is available to borrowers with federal loans who enroll in one of four repayment plans and make payments for 20 to 25 years, regardless of employer.
  • Teacher Loan Forgiveness covers up to $17,500 for teachers who work in low-income schools for five consecutive years, but only applies to Direct Loans and Stafford Loans.
  • Temporary programs like the SAVE plan offer faster forgiveness timelines and lower payment amounts, but these rules can change and are not permanent.
  • You must have federal loans to use any of these programs; private student loans are not covered by federal forgiveness.

Public Service Loan Forgiveness: employer and payment requirements

Public Service Loan Forgiveness (PSLF) forgives the remaining balance on your federal loans after you make 120 may have access to monthly payments while working full-time for a government employer or a nonprofit organization. The employer must be a federal, state, local, or tribal government agency, or a nonprofit organization that has received tax-exempt status from the IRS under section 501(c)(3) or certain other sections. Working for a for-profit company does not count, even if the company does charitable work.

You must be enrolled in an income-driven repayment plan — Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), or Income-Contingent Repayment (ICR). Standard 10-year repayment does not count toward the 120 payments. Your employer must certify your employment using the Employment Certification Form (ECF), which you submit to your loan servicer. You can submit this form once per year, or whenever you change employers.

The 120 payments do not have to be consecutive, and they do not have to be the same amount. Payments made under any income-driven plan count, even if your payment was $0 because your income was below the threshold. Once you reach 120 may have access to payments, you submit a final ECF and your remaining loan balance is forgiven.

Income-Driven Repayment forgiveness: the 20 to 25 year path

If you enroll in an income-driven repayment plan, any remaining balance on your federal loans is forgiven after you make payments for 20 or 25 years, depending on which plan you choose. Income-Based Repayment (IBR) and Pay As You Earn (PAYE) forgive after 20 years. Income-Contingent Repayment (ICR) and the newer SAVE plan forgive after 25 years. You do not need to work in public service; this forgiveness is available to all federal loan borrowers.

Your monthly payment is calculated based on your discretionary income — your adjusted gross income minus 150% of the federal poverty line for your family size. If your income is very low or you have dependents, your payment could be $0. Even $0 payments count toward the forgiveness timeline. You must recertify your income and family size every year by submitting a new income verification form to your servicer.

The forgiven amount is treated as taxable income in the year forgiveness occurs, which means you may owe federal income tax on it. For example, if $50,000 is forgiven, you may owe income tax on that $50,000 in that tax year. Some states do not tax forgiven student loan debt, but others do. Check your state's rules before relying on this path.

Teacher Loan Forgiveness: limited to specific loan types and schools

Teacher Loan Forgiveness covers up to $17,500 of your federal loans if you teach full-time for five consecutive years in a low-income school or school district. The school must be a public or nonprofit elementary, middle, or secondary school that serves students from low-income families. You can check whether a specific school qualifies using the Department of Education's school finder tool.

This program only covers Direct Loans and Stafford Loans (both subsidized and unsubsidized). It does not cover Parent PLUS loans, Grad PLUS loans, or Consolidation Loans that include PLUS loans. If you have consolidated your loans, you may have lost your may be able to access for this program. The five years do not have to be consecutive, but they must be in the same school or district, or in different low-income schools or districts.

You apply by submitting the Teacher Loan Forgiveness Application to your loan servicer. You must include documentation of your employment — usually a letter from your school principal or district confirming your full-time status and the dates you worked. Processing typically takes two to four months after you submit a complete application.

Temporary programs: SAVE and other recent changes

The SAVE (Saving on a Valuable Education) plan is a newer income-driven repayment option that offers faster forgiveness for borrowers with lower balances. Under SAVE, if you borrowed $12,000 or less and have been repaying for 10 years, your remaining balance is forgiven. For every additional $1,000 borrowed above $12,000, you get one additional year to repay before forgiveness kicks in — so if you borrowed $22,000, you have 20 years to repay before forgiveness. This is significantly faster than the standard 20 or 25 year timeline.

SAVE also sets your monthly payment at 5% of your discretionary income (compared to 10% under other income-driven plans), and if your income is low enough, your payment is $0. However, SAVE is a relatively new program and its rules have already changed once. The forgiveness timeline and payment percentage could change again if Congress acts or if a future administration modifies the program.

Other temporary programs have included one-time forgiveness for borrowers who were defrauded by their school, borrowers with permanent disabilities, and borrowers whose schools closed while they were enrolled. These programs are not ongoing; they were created to address specific situations and have closed or are closing. If you think you may fall into one of these categories, contact your loan servicer to ask whether you still have time to apply.

Loan types that do and do not may have access to

Federal loans that may have access to for forgiveness include Direct Loans (Direct Subsidized, Direct Unsubsidized, and Direct PLUS loans made to students), Stafford Loans (both subsidized and unsubsidized), and Perkins Loans. Parent PLUS loans and Grad PLUS loans may have access to for PSLF and income-driven forgiveness, but not for Teacher Loan Forgiveness. If you consolidated your loans into a Direct Consolidation Loan, the consolidated loan itself qualifies, but the forgiveness timeline may restart depending on when you consolidated.

Private student loans do not may have access to for any federal forgiveness program. If you have private loans, your only options are to contact your lender directly about their own hardship programs, or to refinance into a federal loan (though refinancing private loans into federal loans is not possible — you can only refinance federal loans into private loans, which is the opposite direction). Federal loans taken out through the Federal Family Education Loan (FFEL) program can may have access to for forgiveness, but only if they have been consolidated into a Direct Consolidation Loan.

Income limits and payment calculations

Income-driven repayment plans do not have a maximum income limit — even high earners can enroll. However, if your income is above 150% of the federal poverty line for your family size, your monthly payment will be calculated based on that income. For 2024, 150% of the poverty line for a single person is approximately $20,000 per year; for a family of four, it is approximately $41,000 per year. These figures change annually.

Your discretionary income is your adjusted gross income (from your tax return) minus 150% of the poverty line. If this number is negative or zero, your payment is $0. If it is positive, your payment is a percentage of that amount — 5% under SAVE, 10% under PAYE and IBR, or 20% under ICR. You recertify your income every year, so your payment can go up or down based on changes in your earnings.

There is no income limit for PSLF or Teacher Loan Forgiveness. These programs are based on employment and years of service, not on how much you earn. A high-income teacher or government employee can still use these programs.

What happens after forgiveness and tax implications

When your loan balance is forgiven under income-driven repayment (the 20 or 25 year path), the forgiven amount is added to your taxable income for that tax year. If $60,000 is forgiven, you report $60,000 as income on your federal tax return. Your tax liability depends on your tax bracket and other income you have that year. Some borrowers set aside money during their repayment years to cover the tax bill when forgiveness occurs.

Forgiveness under PSLF and Teacher Loan Forgiveness is not treated as taxable income — you do not owe federal income tax on the forgiven amount. This is a significant advantage of these programs. However, some states tax forgiven student loan debt even when the federal government does not, so check your state's rules.

After forgiveness, you are no longer obligated to make payments on that loan. If you have other federal loans not covered by the forgiveness program, you continue to repay those separately. Your credit report will show the account as paid in full or closed, which does not harm your credit score.

Frequently Asked Questions

Can I use more than one forgiveness program at the same time?

No. You can only be enrolled in one repayment plan at a time, and you can only pursue one forgiveness path. However, you can switch between programs. For example, you could work toward PSLF for five years, then switch to income-driven repayment if you leave public service. Payments made under any may have access to plan count toward whichever program you are pursuing at that moment.

What if I have Parent PLUS loans?

Parent PLUS loans may have access to for PSLF and income-driven repayment forgiveness, but not for Teacher Loan Forgiveness. If you are a parent who borrowed PLUS loans for your child's education, you can pursue PSLF if you work in public service, or income-driven forgiveness if you want to extend your repayment timeline. Parent PLUS loans cannot be transferred to the student.

Do I have to work the entire time I'm making payments toward forgiveness?

For PSLF, yes — you must be employed full-time in a may have access to job during the months when you make may have access to payments. If you leave public service, payments made after you leave do not count. For income-driven repayment and Teacher Loan Forgiveness, there is no employment requirement. You can change jobs, become self-employed, or stop working, and your payments still count toward forgiveness.

What if I consolidated my loans after working toward PSLF?

Consolidating into a Direct Consolidation Loan does not erase your previous PSLF payments — they carry over to the new consolidated loan. However, if you consolidated FFEL loans or Perkins Loans into a Direct Consolidation Loan before October 2021, those previous payments did not count. The Department of Education created a one-time waiver in 2021 that allowed some borrowers to count those old payments retroactively, but that waiver has closed.

How do I know if my nonprofit employer qualifies for PSLF?

Your employer must have received tax-exempt status from the IRS. You can search for your employer on the IRS Tax Exempt Organization Search tool on the IRS website. If your employer is listed, it qualifies. If you are unsure, you can submit an Employment Certification Form (ECF) to your loan servicer — they will tell you whether your employer qualifies, and you do not have to wait until you have 120 payments to find out.