“Student loan forgiveness” sounds pretty exciting right? But what does it mean to have your student loans forgiven? And how on earth do you know if you’re eligible?

Student loan forgiveness means that under particular circumstances in your life, you may qualify to have some or all of your loans forgiven. In other words, you won’t have to pay them back

For example, because of your profession, you may not be responsible for making your student loan payments any longer.

The current student loan statistics are truly shocking and student debt is now a national crisis. At Scholly we believe in improving your financial literacy and in reducing your student loan debt as much as possible. 

One of the best ways to do this is to understand student loan forgiveness and to find out if you’re eligible. Student loan forgiveness can be a little tricky to understand sometimes, so let’s break it down for you!

Quick Facts About Student Loan Forgiveness

This is a great overview of how to get your student loans forgiven, but here are some quick facts you’ll want to keep in mind.

Student loan forgiveness:

  • typically refers to the forgiving of federal student loans. If you’ve taken our private personal loans, it’s harder to qualify for student loan forgiveness, though some companies and organizations do offer it (more on this later);
  • is subject to tight parameters and restrictions. For instance, you usually have to work in a specific profession for a certain number of years before becoming eligible;
  • is different than student loan discharge, which is the elimination of student loan debt on account of very extenuating circumstances such as death, bankruptcy, or school closure. You may also be eligible for a total and permanent disability discharge (TPD) if you have a permanent disability; 
  • differs from deferment and forbearance, which are other ways of pausing and postponing your payments on account of certain life circumstances;  
  • is pretty difficult to obtain at this time, and you shouldn’t count on receiving it (although it’s certainly not impossible, and we’ll help you explore your options throughout).

Who Qualifies for Student Loan Forgiveness?

There’s a good chance you qualify for student loan forgiveness if… 

You work in public service

Under the Public Service Loan Forgiveness Program (PSLF), there are a number of professions that are eligible for full or partial loan forgiveness, including:

  • Government (Federal, State, Local, and Tribal)
  • Military
  • Public education 
  • Healthcare
  • The law/legal systems 
  • Volunteer work (such as the Peace Corps) 
  • Veterinary medicine 
  • Law enforcement 

Keep in mind that you must work within one of these fields full-time, for 10+ years before being eligible, and that each profession has its own unique set of eligibility requirements. 

It’s also important to understand that the PSLF application process is tricky, and that even if you qualify in theory, student loan forgiveness is not guaranteed. In fact, a recent piece in Forbes just reported that roughly 99% of borrowers were rejected this year. 

Get more information and find out if you qualify for the PSLF program here. You can also use this PSLF Help Tool.

You’re a public school teacher

The Teacher Loan Forgiveness Program forgives up to $17,500 of your (federal unsubsidized and subsidized) loans. To be eligible, you must teach for 5 consecutive years at a low-income public school or work 5 consecutive years at an educational service agency. You must also be considered a highly qualified teacher.  

What’s great is that public school teachers are eligible for the Teacher Loan Forgiveness Program and the Public Service Loan Forgiveness Program, so feel free to apply for both if you meet the criteria! 

Here are some other key eligibility requirements for teachers looking for student loan forgiveness under this program:

  • Of your 5 consecutive, full-time years of teaching, only one year may be prior to the 1997-1998 academic school year.
  • You must have been employed at an elementary school, secondary school, or educational service agency that serves low-income students.
  • The loans in consideration for forgiveness must have been taken out before the end of your 5 consecutive years of teaching. 

Also, please note that under certain circumstances, you may be eligible for this program even if you have only completed 4 consecutive, full-time years of teaching. In this case, the 5th, partial year of teaching may be considered eligible if:

  • Your completed at least half of the academic year of teaching, AND
  • Your employer confirms that you have fulfilled your contractual obligations for the year, AND
  • You were unable to complete the year for one of several approved reasons including: returning to post-secondary education, possessing a condition included in the Family and Medical Leave Act of 1993, or serving active service duty.

You’re a Nurse, Doctor, or Lawyer 

Like teachers, these professions are included in the PSLF program, but also have their own forgiveness programs as well. Here’s a complete list of student loan forgiveness programs and options.

Student Loan Forgiveness for Nurses

This is a highly comprehensive overview of student loan forgiveness options for nurses by each state, but the Nurse Corps Student Loan Repayment Program (LRP) is the most popular, and has the following eligibility requirements:

  • You must be a registered nurse or an advanced practice registered nurse.
  • You must work in a critical shortage facility or an accredited school of nursing.
  • Your loans must have been directly applied to cover the cost of nursing school or living expenses during nursing school.
  • You may have any of the following loans to apply: Stafford, Grad PLUS, Consolidation loans, Perkins, or other private loans 

Here is a complete guide to the Nurse Corps LRP

There are also other types of student loan forgiveness for nurses as well, including the National Health Service Corps which provides financial assistance to those who want to work as health care providers in high-need communities. If you’ve taken out Perkins loans, you may also be eligible for a partial Perkins loan cancellation

Student Loan Forgiveness for Doctors and other Healthcare Professionals

We love this guide to student loan forgiveness for doctors and other healthcare professionals, but here are some essential things to know:

Student Loan Forgiveness for Lawyers

This is one of the best, to-the-point overviews of student loan forgiveness for lawyers, but the most common program is the Department of Justice Attorney Student Loan Repayment Program

Here are some key facts about the Department of Justice Attorney Student Loan Repayment Program:

  • This program for brand new lawyers, starts in spring, and requires 3+ years of working full-time for the Department of Justice
  • In exchange for this work, you’ll receive up to $6,000 toward your student loan debt.
  • You must have $10,000 or more in student loans (eligible student loans include Stafford Loans, PLUS loans, Perkins loans, and others).
  • Payments from this program to your loan servicer are considered taxable income.
  • This is a highly competitive program, but that shouldn’t discourage you from applying!  

You’re in the Military 

Again, people in the US military can qualify for the PSLF program and various other forgiveness programs, including the Army Student Loan: Active Duty repayment program. There are also programs specifically geared toward members of the US Navy. This is a fantastically comprehensive guide to military student loan forgiveness that we highly recommend.   

Keep in mind that this list is in no way exhaustive, and that there may be other options for you out there. Here’s a resource we love that provides a complete list of student loan forgiveness programs and options out there currently. 

How to Reduce or Eliminate Your Student Loan Debt

If you’re not a candidate for student loan forgiveness for any of the above reasons, there a few other routes you can take to reduce your student loans.

#1 Pursue Income-Driven Loan Repayment

Income-driven student loan repayment allows you to pay lower monthly payments if your student loan payments cut into a substantial amount of your monthly income. 

The idea behind income-driven repayment programs is that your student loan payments will be reduced, and that after the terms of repayment (typically 20-25 years), if you still have a remaining balance, it will be forgiven. 

Here are a few types of income-based student loan repayment options:

Revised Pay As You Earn Repayment Plan (REPAYE) 

With REPAYE, your monthly payments are generally about 10% of your discretionary income (income after taxes), divided by 12 months. These payments are also based on adjusted gross income (AGI), your family size, and your total federal student loan balance.

It’s also important to note that REPAYE is only applicable for Direct Loans. Other loan programs aren’t eligible.

Learn more about REPAYE.

Pay As You Earn Repayment Plan (PAYE)

The terms for PAYE are the same as those for REPAYE, but you must be a new borrower as of October 1, 2007, and must have received a Direct Loan disbursement by October 1, 2011. A “new borrower” refers to someone who does not have an outstanding balance on a Direct Loan or FFEL Loan. 

Learn more about PAYE.

Income-Based Repayment Plan (IBR) 

IBR is a repayment plan with monthly payments of about 15% of your discretionary income, divided by 12. Rates can go as low as 10% for new borrowers.

IBR is available to those with Direct Loans or FFEL loans. All other loan programs are ineligible.

Learn more about IBR.

Income-Contingent Repayment Plan (ICR Plan) 

The ICR plan provides monthly payments that are the lesser of either 1) your fixed monthly payment over 12 years, based on your income, OR 2) 20% of your discretionary income, divided by 12.

Please note that this plan is the only one available to borrowers with parent PLUS loans. It’s also important to understand that parents with PLUS loans can’t repay them under any of the income-driven repayment plans BUT they may consolidate their PLUS loans into a Direct Consolidation Loan and then make these payments under ICR.

Learn more about ICR.

Other things to know about Income-Driven repayment plans:

  • You can’t apply if you’re in default on any of your loans.
  • There is NO FEE to apply for IDRs. If you are contacted by third-party companies requesting money to help you apply, please know that these companies are not affiliated whatsoever with the United States Department of Education.
  • You will only need one application for all of the above listed plans, and you can apply here.
  • You will need to re-certify your income each year.
  • If your income changes, you can submit new information and re-calculate your payments.
  • You may switch from one payment plan to another (provided you meet all of the eligibility requirements).
  • You will need an FSA ID to complete this process, which you can get here.
  • You will need to supply personal information including: your permanent address, your email address, your phone number, and the best time to reach you.
  • You will need to supply your financial information including your AGI (which you can automatically upload using a linked tool from the IRS or enter manually)

#2 Work for a Company That Provides Student Loan Forgiveness as an Employee Benefit

These days, many companies are starting to include student loan repayment as an employee benefit (alongside health insurance, retirement plans, paid time off, etc.), and this is an amazing way to get a substantial amount of your student loan debt taken off your hands. The list of employers that offer student loan forgiveness is obviously always growing and changing, but here are some of the top companies that currently offer student loan repayment as a benefit:

Aetna

This insurance company matches full-time employees’ student loan payments for up to $2,000 a year (up to $10,000 total). Part-time employees can receive matching payments of $1,000 a year, or up to $5,000 total. 

Live Nation 

Event promoting company Live Nation matches up to $100 a month in student loan payments and up to $6,000 in total repayment.

Fidelity Investments

Employees who have been with the company for 6+ months are eligible to receive up to $2,000 in student loan repayment a year, and up to $10,000 total.

Nvidia

This tech company offers both full-time and part-time employees up to $6,000 a year and up to $30,000 total in student loan repayments! To be eligible, you must be employed at Nvidia for a minimum of 3 months and must have graduated college within 3 years of joining.

Chegg

This education tech company provides up to $1,000 a year to both full and part time employees toward student loan payments. The best part of this arrangement is that there is no cap on how much Chegg will provide over the years.

CommonBond

This lending and refinancing company provides its employees up to $100 per month for student loan repayment. There is also no reimbursement limit!

SoFi

This personal finance company offers employees up to $200 per month with no annual cap on loan reimbursement. One of the pioneers of employer student loan forgiveness, they’ve provided over $1 billion in student loan refinancing. 

Estée Lauder

The famed beauty product company, and all brands under it, provides employees up to $100 a month to pay off student loans, and up to $10,000 total.

Abbott

Abbott Laboratories, a pharmaceutical company, is committed to helping employees pay off their student loans AND save for the future. If you contribute 2% of your check to pay for student loans, Abbot will pay in 5% match to your 401k savings!

First Republic Bank

First Republic Bank, based in San Francisco, owns a start-up called Gradifi that specifically helps employers provide their employees with student loan assistance—and therefore helps its employees do the same. First Republic pays up to $100 a month during the first year of employment, $150 during the second, and $200 a month from that point on until the debt is fully paid.

Hulu 

You likely know Hulu from streaming TV shows and movies on it, but they’re also gaining a reputation for matching up to $1,200 a year in student loan repayment per year to employees.

Penguin Random House

Penguin is the first publishing company to offer its employees student loan reimbursement, offering up to $1,200 a year (and $9,000 total) to any full-time employee who has been with Penguin a year or more.

Carvana

Onlilne used car retailer Carvana will pay up to $1,000 a year of employees student loans, and as of right now, there is no cap on repayment.

Peloton

The makers of one of the hottest selling stationary bikes on the market are now partnering with Gradifi to offer employees up to $100 monthly to pay off student loan expenses, with no current maximum repayment.

PricewaterhouseCoopers

This massive accounting firm offers employees up to $1,200 a year in repayment assistance with a maximum cap of $10,000.

As you can see, this is a great new trend that we hope to see a lot more of from employers!

Similar to student loan forgiveness, some companies offer tuition reimbursement. How is this different from student loan forgiveness? Well, sometimes it’s not, and the wording is just different. But sometimes “tuition reimbursement” refers to the repayment of all or some of the cost of college if you’re attending college and working. Employers are especially likely to offer this assistance if your schooling directly improves your ability to do the job you were hired to do, or helps you advance at the company.

Long story short: check with your current or prospective employer to see what kind of college tuition related assistance may be available!

#3 Apply for Student Loan Pay-Off programs 

They’re often competitive, but there are some awesome student loan payoff programs out there—and hey, you can’t win if you don’t apply! 

At Scholly, we regularly run student loan payoff contests. Check out all of our exciting opportunities here

How Scholly Can Help You Avoid Student Loan Debt

Student loan forgiveness, in all its forms, can be tremendously helpful if you qualify. 

But at Scholly, we also adamantly believe in preventing a mountain of debt in the first place. If there’s no debt, there’s nothing to forgive, right?

That’s why we recently gave Scholly Search a huge upgrade! Scholly Search now uses a hyper-personalized set of parameters to match you with the BEST scholarship opportunities tailored just for you!

The best part about scholarships? They’re FREE money for college that you never have to pay back! The more scholarships you win, the less student loan debt you’ll incur. 

Scholly has already helped students win over $100 million is scholarships for school, and we want you to be next! Try Scholly today!