Your Path to Student Debt Forgiveness

Teacher Loan Forgiveness

This program is designed to encourage individuals to enter and remain in the teaching profession. If you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency, you may be eligible for forgiveness of up to $17,500 on your Direct and Stafford loans.

Forgiveness Amounts & Requirements:

• Up to $17,500: You may be eligible for this amount if you were a highly qualified full-time mathematics or science teacher in a secondary school, or a highly qualified special education teacher at the elementary or secondary level.
• Up to $5,000: If you were a highly qualified full-time elementary or secondary school teacher in another subject, you may be eligible for this amount.

Eligibility Checklist:

• You must not have had an outstanding balance on Direct Loans or FFEL Program loans as of Oct. 1, 1998, or on the date you obtained a Direct Loan or FFEL Program loan after Oct. 1, 1998.
• Your five years of teaching service must be consecutive and at a school or educational service agency that serves low-income students and is listed in the Teacher Cancellation Low-Income (TCLI) Directory.
• Loans made before the end of your five years of qualifying teaching service are eligible for forgiveness.

Closed School Discharge

If your school closes while you’re enrolled or soon after you withdraw, you may be eligible for a 100% discharge of your federal student loans taken out for that program. This prevents borrowers from being burdened with debt for an education they were unable to complete.

Who is Eligible?

You may be eligible if you were unable to complete your program because your school closed and you meet the following criteria:

• You were enrolled when your school closed, were on an approved leave of absence, or withdrew within 180 days of the school's closure (or longer in exceptional circumstances).
• You did not complete your program of study through a "teach-out" agreement at another school.
• You are not in the process of transferring your credits to a comparable program at another institution.

Automatic Discharge:

The Department of Education will automatically identify and provide discharges to eligible borrowers who were enrolled within 180 days of a school's closure and did not enroll in another school within three years. However, you can still submit an application if you believe you are eligible and have not received an automatic discharge.

Income-Driven Repayment (IDR) Forgiveness

IDR plans are designed to make your student loan debt more manageable by setting your monthly payment at an amount that is intended to be affordable based on your income and family size. As a key feature of these plans, any remaining loan balance is forgiven if your federal student loans aren't fully repaid at the end of the repayment period.

Forgiveness Timelines:

• Saving on a Valuable Education (SAVE) Plan: Forgiveness can occur in as little as 10 years for borrowers with original principal balances of $12,000 or less. For all other borrowers, the remaining balance is forgiven after 20 years (for undergraduate loans) or 25 years (for graduate loans) of payments.
• Pay As You Earn (PAYE) & Income-Based Repayment (IBR) Plans: The remaining balance is forgiven after 20 or 25 years, depending on when you became a new borrower.
• Income-Contingent Repayment (ICR) Plan: The remaining balance is forgiven after 25 years of payments.

Important Note on Taxes:

While debt forgiven under IDR plans is currently not subject to federal income tax through 2025, this is subject to change. It's important to be aware that the forgiven amount could be considered taxable income in the future unless Congress extends this provision.

Total and Permanent Disability (TPD) Discharge

If you are unable to work and earn a living because of a physical or mental impairment, you may qualify for a TPD discharge, which relieves you from having to repay your federal student loans or complete your TEACH Grant service obligation.

How to Demonstrate Eligibility:

You can prove your eligibility for TPD discharge in one of three ways:

• Veterans Affairs (VA): Submit documentation from the VA showing that you have a service-connected disability that is 100% disabling, or that you are totally disabled based on an individual unemployability rating.
• Social Security Administration (SSA): Provide a copy of your SSA notice of award for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, stating that your next scheduled disability review will be within five to seven years from the date of your most recent SSA disability determination.
• Physician's Certification: Have a doctor of medicine (M.D.) or osteopathy (D.O.) certify on the TPD application form that you are unable to engage in any substantial gainful activity due to a physical or mental impairment that can be expected to result in death, has lasted for a continuous period of at least 60 months, or can be expected to last for a continuous period of at least 60 months.

After discharge, you may be subject to a three-year post-discharge monitoring period.

Borrower Defense to Repayment

The Borrower Defense to Repayment program provides loan forgiveness to students who were deceived by their schools. You may be eligible for discharge of your federal student loans if the school you attended misled you or engaged in other misconduct in violation of certain laws. This is not for complaints about academic quality or isolated incidents, but rather for institutional misconduct.

Examples of School Misconduct:

• Making substantial misrepresentations about the nature of its educational programs, its financial charges, or the employability of its graduates (e.g., falsifying job placement rates or graduate salaries).
• Failing to provide the educational services for which the loans were intended.
• Making a false certification of your eligibility for the loans.

Application Process:

You must submit a detailed application and provide evidence to support your claim. This can include enrollment agreements, promotional materials from the school, emails with school officials, and a detailed timeline of events. Both individual and group applications are possible.

Perkins Loan Cancellation

The Federal Perkins Loan Program, which ended in 2017, has its own unique set of cancellation provisions for borrowers who work in certain public service fields. Unlike PSLF which forgives a remaining balance after 10 years, Perkins cancellation happens incrementally.

Eligible Professions & Cancellation Rates:

A percentage of the loan is canceled for each year of full-time service. Common eligible roles include:

• Teachers: In a low-income area, or in fields like math, science, foreign languages, or special education.
• Early Childhood Education: Provider at a qualifying program.
• Law Enforcement/Corrections Officers: For a public agency.
• Nurses or Medical Technicians: Full-time.
• Firefighters: Full-time.
• Military Service: In an area of hostility.

The standard cancellation rate is 15% for the first and second years of service, 20% for the third and fourth years, and 30% for the fifth year, totaling 100% cancellation after five years. You must apply for Perkins cancellation through the school that made the loan or its Perkins Loan servicer.

Options for Military Service

While there is no single, overarching "military loan forgiveness" program, your service in the U.S. armed forces makes you eligible for several valuable student loan benefits and protections that can lead to forgiveness or make repayment more manageable.

Key Military Benefits:

• Servicemembers Civil Relief Act (SCRA): This law caps the interest rate on your student loans (both federal and private) at 6% during your period of military service.
• Military Service Deferment: You can postpone your federal student loan payments while you are on active duty service and for 13 months following your service.
• Public Service Loan Forgiveness (PSLF): Time spent on active duty counts as qualifying employment for PSLF. This means you can make progress toward the 120 required payments for PSLF while serving.
• Department of Defense (DOD) Repayment Programs: In some cases, the DOD may agree to repay a portion of your student loans as part of your enlistment or reenlistment incentive. This is specific to your service branch and specialty.

Forgiveness vs. Cancellation vs. Discharge

These terms are often used interchangeably, but they have distinct meanings. Understanding them can help you identify which programs you might be eligible for.

Forgiveness / Cancellation

This is an outcome you earn, typically based on your profession. It acknowledges your service in a role that benefits the community. You are required to complete a specific period of qualifying work to have your debt forgiven.

• Primary Examples: Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness.
• Core Idea: Your debt is erased in exchange for your work.

Discharge

This refers to the elimination of your loan debt due to circumstances that are typically beyond your control, making it difficult or impossible for you to repay the loan. It is not something you "earn" through service, but rather a form of relief from an unfortunate situation.

• Primary Examples: Total and Permanent Disability (TPD) Discharge, Closed School Discharge, Borrower Defense to Repayment.
• Core Idea: Your debt is erased because of hardship or because the loan should not have been made in the first place.

How to Apply for Forgiveness

The application process is unique to each forgiveness program. There is no single application for all options. The key is to identify the correct program for your situation and follow its specific steps.

A General Guide to Getting Started:

1. Identify Your Loan Types: Log in to your account on StudentAid.gov to see what types of federal student loans you have (e.g., Direct, FFEL, Perkins). This is the most critical first step, as many programs are only for Direct Loans.
2. Review Program Requirements: Carefully read the eligibility criteria for the program you are interested in. Do you work for a qualifying employer? Did you attend a school that closed? Match your circumstances to the program rules.
3. Use Official Tools: For PSLF, the official PSLF Help Tool is essential. For other programs, look for official applications and forms on the StudentAid.gov website. Avoid third-party services that charge fees for help with federal programs.
4. Contact Your Loan Servicer: Your loan servicer is your primary point of contact for submitting forms like the Teacher Loan Forgiveness application or for questions about your specific account.
5. Keep Meticulous Records: Save copies of all forms you submit, emails you send, and documents you receive. Document your employment history and payments carefully.