How to Apply for Student Loan Forgiveness

A helpful government initiative, student loan forgiveness enables specific debtors to pay off their outstanding debt after fulfilling certain conditions. Student loan forgiveness might be worth tens or even hundreds of thousands of dollars depending on how much you borrowed.

It can be challenging to meet the stringent conditions for student loan forgiveness, and it's simple to make a mistake on the paperwork, which could result in an unexpected rejection of your application. If it isn't practical, refinancing your student loans could also lower your monthly payments. 

 

How to apply for student loan forgiveness in four steps

If you're looking to qualify for student loan forgiveness, taking these four steps will get you well on your way.

Assess your student loans.

Only some categories of federal student debts are eligible for student loan forgiveness. Public Service Loan Forgiveness (PSLF) is the most likely way to have your loans forgiven for most borrowers. You can be eligible for PSLF if you work for a public employer, like a county hospital, public school, or other government position, and you have Federal Direct loans. Certain nonprofit functions are also eligible. To ensure your work qualifies for this program, complete an employment certification form and discuss it with your service provider.

Teacher Loan Forgiveness (TLF), which has lower forgiveness limits than PSLF ($17,500 as of 2023), may be available if you work as a teacher. Many public school instructors would benefit more from PSLF because of that cap. (As of July 2022, $97,218 was the average amount of loans forgiven through PSLF.) Borrowers holding Federal Direct or Federal Family Education loans are eligible for TLF.

You should verify your eligibility by contacting your loan servicer, the organization to which you pay your student loan installments, if you need clarification on your loan type or whether you might be eligible.

Student loans may be eligible for forgiveness in other limited circumstances, such as if your school shuts down or you become permanently disabled. However, those are much less common.

 

Begin the student loan forgiveness application process

Please select the appropriate application with your servicer, complete it, and review the information. Make sure you are eligible for student loan forgiveness based on your employment.

You must work for an eligible company and make 120 on-time payments to qualify for PSLF. That would take ten years of timely payments, so it might take some time before you're eligible. 

You must work for a qualifying low-income school for five consecutive academic years to be suitable for TLF. If you are eligible for both schemes, you should forego TLF as the five academic years do not count toward the 120 payments if you are a teacher.

Again, check with your student loan servicer to see if you're on the right track and must submit the proper paperwork or work for a qualified employer. Any time you make a simple error, you risk losing.

 

Continue making payments as scheduled.

Don't assume that because you've made 120 monthly payments, you've been accepted, and your loan balance is forgiven. Continue making payments according to schedule until you receive a new statement from your loan servicer indicating the balance has been dismissed.

Missed or late payments can ruin your plans for forgiveness and lower your credit score. 

Stopping your loan payments could be costly if you've only made 119 monthly payments or your servicer finds your employer ineligible.

For the most recent balance and payment details for your loans, you can always log into your loan servicer's website.

 

Confirm that your loans are forgiven.

Follow the instructions provided by the loan servicer to complete any necessary steps, submit any necessary paperwork, and have your balance forgiven. Once your application has been reviewed and accepted, you should receive a letter stating that your loans have been discharged. 

For your records, keep any affirmations or other supporting materials. Remember that loan forgiveness only becomes effective once it appears on your student loan statement. It's critical to continue making payments until you receive information indicating no outstanding balances.

 

Who is eligible for student loan forgiveness?

Borrowers who have worked for a qualifying public employer for a sufficient number of years typically qualify for student loan forgiveness. For you to be eligible, you must have Federal Direct loans.

Federal Direct or Family Education loans are required to be eligible for TLF. To qualify for this program, you must also have worked for an elementary school, a secondary school, or an organization that provides educational services to low-income students for at least five consecutive academic years.

 

How long does it take for student loan debt to ​​be forgiven?

To be eligible for the PSLF program, you must have made eligible loan payments for at least ten years (120 months) while employed by an eligible employer. You're in an excellent position to qualify if you have sizable student loans or made payments under an income-based repayment plan. However, depending on your loan balance and repayment schedule, your loans were paid off well before that date.

You will only have a portion of your loan balance forgiven for TLF, up to $17,500. This might be the best option if you have that remaining balance or less after five years of payments. If your ratio after five years is significantly higher, PSLF is more valuable. You must work for five complete academic years in a row.

Depending on the loan servicer, processing a request for student loan forgiveness can take a while. Always inquire about the timeline when requesting loan forgiveness. Until your loan servicer instructs you explicitly, continue making those regular payments while your application is being reviewed. Even though making additional payments each month is unpleasant, it's preferable to do so rather than have to deal with the consequences of missing or making a late payment.

 

Can you improve student loan forgiveness chances?

Adhering strictly to the regulations is the best way to increase your chances of receiving student loan forgiveness—plenty of horrifying tales of student loan borrowers whose applications were turned down for unforeseen causes.

Find out immediately if your employer is a low-income or public school. Most government positions qualify as employment with a public employer. However, your work might not count toward the 120-month requirement if you're a contractor or work for a government contractor.

 

Follow the rules meticulously to qualify for student loan forgiveness 

The chance to have your entire loan balance forgiven when you have federal student loans could change your life. To make it work, make sure your employer qualifies, that you strictly adhere to the program's rules, and that you pay your bills on time.

If you have private student loans, refinancing may be the best course of action. Even if you cannot have your balance forgiven, you may still be able to save money by refinancing to a lower interest rate.