2017’s Best Forgiveness Programs for Federal Loans
There’s literally never been a better time to seek out Student Loan Forgiveness benefits, especially for those borrowers with Federal student loans.
Why? Because Federal student loan forgiveness programs are offered in a wide variety of flavors, with financial assistance programs available to virtually anyone who’s taken out a Government-backed student loan, ever.
Whether you hundreds of thousands of dollars, tens of thousands of dollars, or a few thousand dollars, there’s bound to be a program that you can qualify for (given some planning and flexibility), so be sure to read through this page’s entire content, and you’re sure to find something valuable.
If you have questions about Federal student loan forgiveness benefits, please feel free to ask them in the Comments section below.
Available Loan Forgiveness Benefits Programs
Currently, the Federal Government offers significant loan forgiveness benefits to anyone who:
- First borrowed on or after October 1st, 2007 (via the Obama Loan Forgiveness Program)
- Works in Public Service (via the Public Service Loan Forgiveness Program)
- Works as a Nurse (via PSLF, the Nurse Corps Loan Forgiveness Program, or the Perkins Loan Forgiveness for Licensed Medical Technicians Program)
- Works as a Teacher (via PSLF, Federal TEACH Grants, Perkins Loan Forgiveness & Stafford Loan Forgiveness Programs)
- Works for the Government (via the Government Employee Loan Forgiveness Program)
- Works at a Non-Profit (via Non-Profit Student Loan Forgiveness Program)
- Serves in the Military (via a suite of Military Student Loan Forgiveness Programs)
- Serves in the Peace Corps or AmeriCorps (via the Public Service Loan Forgiveness Program)
- Is permanently disabled (via the Total and Permanent Disability Discharge Program)
- Holds debt from a school that closed before they could finish (via the Closed School Discharge Program)
- Can prove that they were lied to, promised something they did not receive, deceived or legally taken advantage of in some way (via the Defense Against Repayment Provision)
What Will You Find Here?
This page goes through each of the above-named programs in detail, introducing how they work, who they’re for, how to qualify for them, what you need to do to apply for the benefit, and more.
For additional details on each specific program, be sure to click the links above, or below, and read more on their individual Program pages. I go through everything in complete detail so that you don’t have to go anywhere else for any information needed to take advantage of these excellent benefits.
If you’re one of the many unlucky souls across the country to be holding Private Student Loan Debt, then you’ll want to head on over to my page about Private Student Loan Forgiveness so you can find out what’s available to you.
But Before We Get Into It…
Before we go through each program mentioned above, I do want to point out a faster, easier way to get to Loan Forgiveness.
While it takes hours, and sometimes days, weeks or even months of research, paperwork, negotiations, etc. to even figure out which Federal Forgiveness Programs apply to your specific financial situation, it’s possible to outsource this work to an expert who will take care of all that for you.
And while the student loan industry is full of scam artists, cheats and liars, there is one company that I truly do trust to look out for your best interests: the Student Loan Relief Helpline. This Helpline takes calls for free, will take down your information, and allow you to ask questions before they try to charge you for any of their services.
My recommendation for finding the fastest resolution option is to call the Student Loan Relief Helpline, tell them your situation, and ask which Federal Forgiveness Programs you may qualify for. You should be able to get this information entirely for free, and in just a few minutes.
After you get an idea of what’s available, the Helpline expert will likely pitch you some of their services (document preparation, contracts negotiation, etc.), but if you’re not interested in outsourcing this work to an expert, you can simply say no thank you!
To reach the Student Loan Relief Helpline, call 1-888-906-3065.
Why Does the Gov’t Offer Federal Student Debt Loan Forgiveness?
Due to the rising costs of higher education, each year, the average college graduate leaves school with more debt than ever before, making Student Loan Debt Relief more important than it’s ever been before, especially considering the fact that many graduates will be unable to find jobs with salaries high enough to cover their monthly loan payments.
In fact, a recent article from CNN Money reported that the average student loan debt for recent graduates now sits at $29,400, which is a significant increase from years past, and something that would have been completely unthinkable just a couple of decades ago.
With an economy that continues to struggle, and excessive student loan debt weighing down the purchasing power of virtually every college graduate, the Federal Government realizes that many Americans are facing a relatively dire situation, and they’ve responded appropriately.
Accordingly, the Federal Government has created a wide variety of available debt forgiveness programs made for those people having trouble paying their student loans, with so many opportunities for financial assistance that virtually everyone will qualify (or could easily qualify with simple life changes) for some form of debt relief.
These debt forgiveness programs are taxpayer funded (you’re welcome!), and are certain to help you pay back your student loans more quickly, and at a lower cost, than you’d be able to do on your own, so be sure to take advantage of them!
If you have questions about anything covered on this page, please ask them in the comments section below. I’ll do my best to answer all questions within 24 hours.
Forgiveness for Recent Borrowers
Anyone who first took out Federal student loans since October 1st, 2007 is eligible for the benefits enacted in what’s being labelled the President Obama Student Loan Forgiveness Program.
Originally announced in October of 2001, President Obama promised to initiative major reforms to Federal student loan debt law, including a massive overhaul of the existing Federal forgiveness programs, and the introduction of a brand new, much more lucrative Federal student loan repayment plan
President Obama’s Higher Education “Shake Up” is rumored to have been spurred on by the Occupy Wall Street protests, which have since faded away, but which were making a great deal of noise at the time, and which were especially focused on the issue of student loan debt.
There is no official “President Obama Loan Forgiveness Program”, per se, but when people refer to Obama Loan Forgiveness, they’re actually talking about the suite of reforms that were put into law over the past couple years, including:
- The Know Before You Owe Initiative – To ensure that graduates aren’t saddled with excessive monthly payments that would surely put them in the bread line, President Obama committed to offering them the ability to cap monthly student loan payments at just 10% of discretionary income, a move that would save some borrowers hundreds to thousands of dollars per month
- Introduction of the Pay As You Earn Student Loan Repayment Plan – This new Income-Based Federal Student Loan Repayment Plan limits monthly payments to just 10% of discretionary income, and offers complete loan forgiveness once borrowers have made 20 years worth of monthly payments, regardless of how much they still owe
- Updates to the Public Service Loan Forgiveness Program – While previous law stipulated that PSLF loan forgiveness could be earned by making 20 years worth of payments, President Obama’s update now offers eligible participants to discharge their entire remaining student loan debt after making payments on it for just 10 years
There is a major caveat to President Obama’s updates, however, in that the extremely popular Pay As You Earn Repayment Plan is still currently only available to those borrowers who first received Federally-funded student loans on or after October 1st, 2007.
Fortunately, the President has promised to expand access to this repayment plan to everyone who holds Federal student loans, and experts following the issue anticipate seeing that promise codified into law some time during 2016.
(UPDATE) President Obama’s Department of Education carried out their promise to extend the Obama Student Loan Debt Reforms to all borrowers, and now anyone with Federal Student Loan Debt can enroll in the REPAYE Student Loan Repayment Plan, which offers similar benefits to Obama’s Pay As You Earn Plan.
The Public Service Loan Forgiveness Program
Abbreviated PSLF, the Public Service Loan Forgiveness Program is perhaps the most accessible of all the Federal loan forgiveness programs, because it allows people from so many different professions to qualify for debt forgiveness.
The PSLF program was created in 2007, so it’s relatively new, but it offers some of the best loan forgiveness benefits available from the Federal Government, including complete Federal student loan forgiveness once you’ve made 10 years (120) monthly payments on your debt.
That forgiveness is offered, no matter how much you still owe, and no matter how much you’ve actually paid, meaning that this program could stand to save you literally hundreds of thousands of dollars.
Public Service Loan Forgiveness benefits are available to anyone who works full time in one of the following positions:
- Government Employees (State, Federal, Local, etc.)
- Non-Profit Organizations, including all 501(c)(3) Organizations
- Teachers (at public schools)
- Military personnel (all branches, including Reservists)
- Emergency management personnel (FEMA, etc.)
- Public safety and law enforcement personnel (Police, Firefighters, Park Rangers, etc.)
- Public health services workers (Doctors, Nurses, Medical Records people, etc.)
- Public interest law services (Lawyers, Attorneys, Paralegals, etc.)
- Early childhood education workers (Daycare and Preschool teachers, etc.)
- Public service workers for individuals with disabilities (Social Workers, Speech Therapists, Psychologists, Counselors, etc.)
- Public service workers for the elderly (Home Health Aids, Nursing Home Personnel, etc.)
- Public service volunteers (Peace Corps, AmeriCorps, etc.)
As you can see, that’s a pretty long list of eligible candidates. There are literally millions of people who qualify for PSLF benefits, many of whom aren’t even aware of it!
Who is PSLF Best For?
PSLF is especially valuable to people who took out massive student loans to go to school (like Doctors, Dentists, and Lawyers), but who graduate into jobs that aren’t paying them much each month, like for those healthcare personnel that choose to work in the public sector.
It’s recognized as a loophole, but by enrolling in one of the Income-Based Repayment Plans (like the Pay As You Earn Plan), and PSLF at the same time, it’s possible to have hundreds of thousands of dollars of student loans written off after making very small payments for 10 years.
One of the downsides to PSLF is that it’s an all-or-nothing benefit, meaning that you don’t get incremental forgiveness, and that it will take 10 years of consistently working in an eligible position and making monthly payments to receive any forgiveness at all.
There are also potential major changes in the works for the Public Service Loan Forgiveness program, because of the loophole mentioned above, and some other issues that are leading to it being difficult to keep fully-funded.
I’m following those discussions and will update the main PSLF page whenever new information is available, so be sure to visit it every few months in order to stay up to date.
Nursing Student Loan Forgiveness Programs
The bad news is that there aren’t any new Federal Nursing Student Loan Forgiveness Programs this year, but the good news is that all of the existing benefits remain fully-funded.
In fact, the Federal Government continues to offer three different avenues for Nursing loan forgiveness, including:
- The NURSE Corps Loan Repayment Program (NHSC) – This program was previously called the Nursing Education Loan Repayment Program (NELRP), and was created to help encourage RN’s to work in underserved hospitals and clinics, by offering them the chance to write off some of their student loans for qualifying service. The way it works is that RN’s will are able to have 60% of their Nursing loans written off for serving 2 years at a qualifying facility, along with 25% more for 1 additional year. That’s a pretty dang good deal, but it means you’d have to be willing to work at an underserved hospital or clinic, which could be a stressful, frustrating experience.
- Perkins Loan Discharges & Loan Cancellation for Nurses – Many people don’t realize it, but the “Teacher Loan Cancellation Program” also applies to Nurses, and allows full-time nurses (and medical technicians!) to write off 100% of their Perkins loans for five years of qualifying employment as a full-time nurse. The limitation on this program is that only Perkins loans are available for it, so you’d have to plan to use this one in advance of taking on debt.
- The Public Service Loan Forgiveness Program – Nurses have always been able to take advantage of the PSLF program, and for good reason! It was created specifically to help encourage people to take up work in public service positions, and no job defines public service better than that of a Nurse. Any Nurse who holds a full-time, qualifying position will be able to have the entirety of their student loan balance forgiven after they’ve made 10 years worth (120) of monthly payments on their debt, no matter how much is left when that 120th payment is made!
If you’re a Nurse, or planning on becoming one, the great news is that you have access to some of the best student loan forgiveness benefits available to anyone.
But these programs outlined here aren’t all that there is to offer Nurses, because several states also provide specific Loan Forgiveness Programs for Nurses as well, with California, Florida, Illinois, New York and Texas all offering significant assistance programs of their own.
Teacher Loan Forgiveness Programs
Stafford Loan Forgiveness for Teachers
Teaching who complete full-time positions for five consecutive years in low-income schools may be eligible to have a portion of their student loans cancelled.
Eligibility is limited to FFEL Stafford Loans, Direct Subsidized and Unsubsidized Loans, and some Consolidation Loans.
The Stafford Student Loan Forgiveness Program exists to encourage highly qualified individuals to become teachers in impoverished areas serving low-income families, so that those families have access to higher quality education resources than they would otherwise be able to find.
Please visit our page on the Stafford Loan Forgiveness Program for additional details.
The Perkins Loan Forgiveness Program
The Federal Perkins Loan Forgiveness Program offers low interest rate loans to students in need of financial assistance.
This program was created to help economically underprivileged students obtain financing assistance to cover the costs of postsecondary education. 1,700 schools across the country participate in the Perkins Loan program, but applicants must first file a FAFSA as part of the application process.
Perkins loan recipients must also file a Perkins promissory note in order to be eligible to receive their loan. Perkins loan recipients are eligible to receive 15% loan forgiveness for their first and second years of full time teaching, 20% for their third and fourth years, and 30% for their fifth year of service.
Please visit our page on the Perkins Loan Forgiveness Program for additional details.
TEACH Grant Loans
The Federal TEACH Grant Program isn’t technically a loan “forgiveness” program, since these grants are applied for and used before loan debt has been accumulated, they’re still worth mentioning here.
TEACH Grants provide up to $4,000 a year in tuition assistance for students who promise to become teachers in high-need subjects working in low-income areas.
Receiving a TEACH Grant requires completing an applications process that involves signing the TEACH Grant Agreement to Serve and formally accepting the requirements called for by the TEACH Grant Service Obligation, which states that you must teach low-income children in a high-need area for at least 4 total years within 8 years of receiving your TEACH Grant money.
This program is relatively easy to qualify for, and it can provide a great deal of value (at $4,000 per year, if it takes you 4 years to complete your undergraduate degree, then you could stand to receive $16,000 in TEACH Grant loans just for your undergraduate education), so it’s more than worth looking into if you’re interested in becoming a teacher.
Please visit our page about the Federal TEACH Grant Program for additional information.
Student Loan Forgiveness Programs for Volunteers
Student loan debt forgiveness is also available from federally funded programs that reward individuals for serving as volunteers through community service organizations like AmeriCorps, the Peace Corps, and VISTA via the Public Service Student Loan Forgiveness Plan (PSLF).
Not everyone who serves in these organizations can take advantage of the available college loan forgiveness programs, but those individuals who have large debts, low incomes, and who have served or plan on serving for an extended period of time in these organizations are excellent candidates.
Federal student loan forgiveness for public service primarily serves volunteers working with:
If you serve for at least 12 months, you’ll receive up to $7,400 in stipends, along with $4,725 that you can apply towards your student loan debts. For more information, call 1-800-942-2677, or visit the AmeriCorps website here.
Peace Corps volunteers are eligible to apply for Stafford, Perkins and Consolidation loans deferment, as well as partial cancellations of Perkins Loans (at 15% for each year of service, up to a maximum of 70% in total loan Perkins Loans forgiveness for service). For more information, contact the Peace Corps at 1-800-424-8580, or visit the Peace Corps website here.
VISTA (Volunteers in Service to America):
VISTA volunteers who provide 1,700 hours of service are eligible to receive $4,725 in loan forgiveness. For more information, call 1-800-942-2677, or visit the AmeriCorps VISTA website here.
Military Loan Forgiveness Programs
As part of the incredible package of education benefits for military personnel, like the Post 9/11 GI Bill and the Yellow Ribbon Program, service members from each branch are also eligible for Military Loan Forgiveness Programs in 2014.
The Army, National Guard, Navy Air Force and the Reserves all offer excellent military loan repayment benefits.
Take a look at some of the specific benefits available from each branch below.
Army Student Loan Repayment Programs (SLRP)
The Army Student Loan Repayment Program (SLRP) is available to new enlistees who are deemed to be “highly qualified” as a means for enticing them into joining the military.
Individuals who qualify for the Army’s LRP are eligible to have up to $65,000 worth of qualifying student loans fully paid off.
Qualifying for Army SLRP benefits requires requesting participation in the program during the enlistment process, having participation in the program annotated in writing on your enlistment contract, enlisting in an MOS eligible to participate in the program and a variety of other qualifications.
Find out about Army SLRP benefits by visiting our page here:
National Guard Student Loan Repayment Programs (SLRP)
Soldiers and officers that join the Guard with an existing student loan obligation at the time of their enlistment may be eligible for the National Guards Student Loan Repayment Program (SLRP), which offers up to $50,000 of student loan debt relief for Guard members who take on certain jobs with a six or eight-year enlistment agreement.
Existing Guard members who extend their enlistment contract for at least six years are also eligible for the National Guard SLRP, as long as they meet eligibility requirements, including scoring high enough on the Armed Forces Qualifying Test and being a member of a valid Military Occupational Specialty (MOS) in their National Guard unit.
Finally, the National Guard student loan repayment program is also available to applicants entering Officer Candidate School (OCS) who have at least 90 college credit hours and agree to an additional eight-year commitment at the time of enrollment in OCS.
For additional details on the National Guard SLRP, please visit our page here:
Navy Student Loan Repayment Programs (LRP)
The Navy Student Loan Repayment Program (LRP) covers the cost for up to $65,000 worth of loans acquired from pursuing a post-secondary education program (any level of education higher than high school). The Navy LRP program is available to all active duty enlisted personnel.
To qualify for this program, enlistees must sign up to serve for a minimum of at least four years.
The Navy reserves currently offers up to $10,000 for Navy Reserve enlistments, which is significantly lower, but still a great benefit for those reserve personnel who require financial assistance.
To qualify for eligibility for the Navy Reserve LRP program, enlistees must agree to serve for a minimum of six years.
For additional details on Navy LRP, please visit our page here:
Air Force College Loan Repayment Program (CLRP)
The Air Force student loan repayment program is an incentive to enlistees that begins after airmen have completed their first year of service.
After their first year of service, the Air Force begins making annual payments totaling up to $10,000 on outstanding college loans for eligible airmen.
Through the CLRP, the Air Force pays off 33.33% or $1,500 (whichever is greater) of any qualified outstanding student loan debts for each year of service.
Payments end once the Air Force has paid $10,000, the maximum amount available for CLRP repayments.
For additional details on the Air Force student loan repayment program, please visit our page here:
Army & Navy Reserves Forgiveness Programs
Army Reserves and Navy Reserves are eligible to have up to 15% of the outstanding principle balance of their loans paid off by their respective branch annually, or up to $1,500 in annual debt repayments, whichever is greater, for each year of service.
The Air National Guard offers 15% annually, or up to $5,000 (again whichever value is greater) of student loan debt repayment for each year of service.
Other Federal Assistance Programs
If you’ve got Federal student loan debt, you’ll have access to the variety of Forgiveness Programs explained here, but you should also be sure to visit my pages covering:
- Federal Student Loan Repayment Plans
- Federal Student Loan Consolidation
- Federal Student Loan Deferments
- Federal Student Loan Forbearance
- Federal Student Loan Refinancing
All of these programs offer some sort of debt relief or financial assistance to borrowers who are having trouble paying back their student loans, and each program could stand to save you hundreds to thousands of dollars a month!
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