Student Loan Forgiveness Programs

There are a couple of student loan forgiveness programs that allow students the ability to have their student loans forgiven. The Public Service Loan Forgiveness (PSLF) Program and the Teacher Loan Forgiveness Program.

Loan Forgiveness for Public Service Employees

Congress created the Public Service Loan Forgiveness Program in 2007 through the College Cost Reduction and Access Act. This program was designed to encourage students to enter and continue to work full-time in public service jobs.

Borrowers may qualify for student loan forgiveness on the remaining balance of their eligible federal student loans. You must have made 120 payments on the student loans under specific repayment plans while being employed full-time by a selection of public service employers.

Because borrowers have to make 120 monthly payments on eligible federal student loans beginning after October 1, 2007, the first cancellation of student loan balances will not occur until October of 2017.

Which federal student loans are eligible for the Public Service Loan Forgiveness Program?

Any non-defaulted loan that was made under the William D. Ford Direct Loan Program is eligible for this loan forgiveness program.

This includes the following types of Direct Loans:

-Federal Direct Stafford/Ford Loans (Direct Subsidized Loans).

-Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans)

-Federal Direct PLUS Loans (Direct PLUS Loans).

-Federal Direct Consolidation Loans (Direct Consolidation Loans).

Do any other federal student loans qualify for forgiveness?

Loan forgiveness under the Public Service program is only available for loans made under the Federal Direct Loan Program. However, student loans made under other federal student loans can be forgiven if they are consolidated into a Direct Consolidation Loan. If you use this option, remember that only payments made on the Direct Consolidation Loan will count toward the required 120 monthly payments.

The following student loans can be consolidated into the Direct Loan Program:

-Federal Family Education Loan (FFEL) Loans which include:

     *Subsidized Stafford Loans

     *Unsubsidized Stafford Loans

     *Federal PLUS Loans

     *Federal Consolidation Loans (except joint spousal consolidation loans).

-Federal Perkins Loans

-Some Nursing and Health Professional Loans

What are the eligibility requirements for loan forgiveness under the Public Service Forgiveness Program?

-You must not be in default on the loans for which forgiveness is requested.

-You must be employed full-time by a public service employer.

What is considered a public service employer or organization?

You must be employed full-time by a public service organization or be serving full-time in a Peace Corp or AmeriCorps position.

Public service organizations are:

-A local, state, federal, or Tribal governmental organization or agency. This also includes most public schools or colleges.

- A public child or family service agency

-A non-profit 501(c) (3) organization.

-A Tribal college

-Private organizations or businesses that provide public services that include military service, public safety, law enforcement, public health, public education, public interest law, public library, and school based services.

Stafford Loan Forgiveness Program for Teachers

To encourage you to enter and continue in the teaching profession, the Teacher Loan Forgiveness Program was created.

To qualify for this program, teachers must teach full-time for five consecutive, complete academic years in certain elementary and secondary schools that serve low-income families.

You may be eligible for up to a combined total of $17,500 in principal and interest on your FFEL and Direct Loan program loans.

You can apply for the Teacher Loan Forgiveness after you have completed the five-year teaching requirement.

You can get forbearance for up to 60 days while you are completing the loan forgiveness application process.