13 Student Loan Forgiveness and Discharge Programs [+Contact Info]

13 Student Loan Forgiveness and Discharge Programs [+Contact Info]

Student loans can be overwhelming. And if you have one, I’m sure you constantly dream about a debt-free life.

Luckily, there are many student loan forgiveness programs that can make your journey towards financial freedom shorter. 

I grew up listening to my father say, “freedom is all about having your mind free from worry.”

And that is so true when it comes to debt. It is hard to have peace of mind when you own thousands of dollars. But sometimes we face ourselves with little or no options, and that’s when we make compromising decisions.

But hey, there is always a way out. 

Financial freedom can become your reality if you make a smart plan to get to the exit route. 

And if a smart financial plan is equivalent to a long road towards the exit route, student loan forgiveness programs are the perfect shortcuts to get there. Student loan forgiveness programs are the best way to get to a debt-free life faster.

Student loan forgiveness programs are exactly what they sound like: your school debt is forgiven and you become no longer responsible for dealing with this burden. Pretty awesome, hum?

And did you know that around 50% of student loan borrowers qualify for some type of student loan forgiveness program? 

Yes — that’s right. It means that one in every two borrowers would qualify for a student loan forgiveness program.

The thing is that many people don’t explore these “too good to be true” programs because they don’t think they would qualify. Or simply because they don’t fully understand what they are about.

So, if you are here reading this article today to understand more about these programs — you’re already a step ahead of the crowd. Great job. 

Let’s start out by understanding the difference between student loan forgiveness programs and student loan discharge programs:

Student Loan Forgiveness Programs VS. Student Loan Discharge Programs

Many people tend to think that “student loan forgiveness” and “student loan discharge” are synonyms. 

And that’s understandable because even though they don’t mean the same thing, they have the same consequence: freedom from your student loan responsibility. 

This means that if you have your student loan either totally discharged or forgiven, you no longer have to pay your remaining debt.

But you might be wondering: if they lead to the same exit route, what makes these two types of programs different?

In short, student loan forgiveness happens as a government’s way to say “thank you” for using your skills to serve the community. So, if you work on a qualified job and fit the necessary requirements, you can apply for student loan forgiveness. 

Another way to qualify for student loan forgiveness is if your loan repayment plan has a program for that.

On the other hand, student loan discharge programs are for specific catastrophic situations such as death, disability, fraud, or severe disasters. For example, some spouses of the victims of the 9/11 catastrophe had their student loan discharged. 

So, student loan discharge is not something you’ll want to receive. It is more about a necessity to alleviate a tragic situation.

Some student loan forgiveness programs have the amount forgiven as taxable income. Student loan discharge programs were all taxable until the beginning of 2019, but a new tax law came out eliminating the tax burden from student loan discharge programs.

You might be wondering if you are a step closer to your financial freedom or not. So let’s dive into student loan forgiveness and discharge programs to find out if you’re eligible to any of them:

Career-Based Student Loan Forgiveness Programs

The most common way to get student loans forgiven is by deciding to shift your career to public service. Or if your career is already on the public service path, all you need to do is find the best program based on your current job.

Let’s explore:

1. Public Service Loan Forgiveness (PSLF)

If you work for a government agency or for a non-profit organization, you might qualify for the Public Service Loan Forgiveness. 

This federal program was created to incentivize people to pursue careers in areas with low supply of qualified people.

How to become eligible for this program?

There are 4 requirements that you must meet before you apply for the Public Service Loan Forgiveness:

  1. You must work for:
  • A government organization at any level;
  • Or a tax-exempt 501(c)(3) not-for-profit organization;
  • Or a not-for-profit organization that provides qualifying public services.

Note: Labor unions, partisan political organization, and religious organizations do not apply.

  1. You must be working full-time for that institution.
  2. You must be making the loan repayments on an income-driven based plan.
  3. You must have made 120 monthly payments — which is equivalent to 10 years in most cases.

Note: If you have the Federal Perkins Loan, you do not qualify for this program. But don’t worry about it because we will go over a plan that was created specifically for the Federal Perkins Loan. 

How to apply for this program?

To prove that you meet all the requirements you must fill out this form both once a year and every time you change jobs during the 10-year payment period. This is an extremely important step that is commonly missed. If you fail to submit this form every year you will not qualify after making 10 years of payment. 

After you complete the 120th payment, it is time to submit your official PSLF application. Keep in mind that you still need to be working for a qualified employer when you receive your student loan forgiveness.

You may mail the forms and the application to this address:

U.S. Department of Education

FedLoan Servicing

P.O. Box 69184

Harrisburg, PA 17106-9184

The PSLF is a decade long process but is certainly worth it considering that you can end up saving thousands of dollars at the end.

2. Teacher Loan Forgiveness (TLF)

If you have been teaching full-time for the past five years in a low-income institution, you may be eligible for this student loan forgiveness program. 

Elementary school teachers may receive up to $5,000 and secondary school teachers who teach specific subjects could receive up to $17,500 in loan forgiveness.

This program was created to encourage teachers to instruct students of needy areas. 

How to become eligible for this program?

There are a few specifications that you must meet to qualify for this student loan forgiveness program:

  1. You must be a qualified teacher (have at least a bachelor’s degree and have received full state certification as a teacher);
  2. You must have been employed full-time for five complete and consecutive academic years;
  3. You must have been employed at a low-income school or educational service agency;
  4. The loan for which you are seeking forgiveness must have been made before the end of your five academic years of qualifying teaching service;
  5. You must be paying direct loans or Federal Stafford loans.

How to apply for this program?

If you meet all the specifications above, the next step is to fill out this form. You will need the Chief Administrative Officer of the institution you teach — or taught — to fill out a section of the form.

Once the form is ready, you should mail it to this address:

American Education Services

Attn: Teacher Loan Forgiveness

P.O. Box 2461

Harrisburg, PA 17105-2461 

After you mail the documentation, you just wait for confirmation (and celebrate).

3. Nurse Corps Loan Repayment Program (LRP)

Just like teachers, nurses are eligible for student loan forgiveness programs. The Nurse Corps Loan Repayment program pays off a portion of nursing school debt in exchange for work commitment in a high-need area.

So, if you’re a nurse and are willing to commit at least two years of work to an area in high need, Nurse Corps Loan Repayment Program may pay off the majority of your nursing school debt.

If you commit two years, the program pays 60% of your remaining debt. And if you end up finding it is worthwhile to stay and commit an extra year, they will pay off 85% of your debt. 

This means you can get 85% of your student loans forgiven in 3 years — pretty sweet, hum?

How to become eligible for this program?

To qualify for this student loan program you must:

  1. Be a licensed registered nurse;
  2. Receive nursing education from an accredited school of nursing in the U.S. territory;
  3. Work full-time in an eligible Critical Shortage Facility in a high need area.

If you are a nursing faculty, you are also eligible for the program if you teach at an accredited school of nursing.

How to apply for this program?

If you identify with the purpose of the program, there are two simple steps to follow:

First: go over the Application and Program Guidance to review all the details on your duties.

Second: sign up for the HRSA email list to get notified about the next time applications open. That’s right — Nurse Corps Loan Repayment Program is not always open to apply.

But it is worth it to keep an eye (or two) open because the LRP is one of the student loan forgiveness programs with the highest returns.

4. Federal Perkins Loan Cancellation 

If you have the Federal Perkins Loan, this is where you shine — you might qualify for partial or total cancellation of your debt. 

But that depends on some aspects of your career, such as the area of actuation and the length of time that you were in such position.

How to become eligible for this program?

Since this student loan program covers many professions, the qualification requirements are diverse. But one general requirement is to be employed in a public service job. 

This student loan forgiveness program cancels your debt in increasing percentage each year for the time you work in the public service.

The main professions that this program covers are:

  • Educators
  • Firefighters
  • Law Enforcement Officers
  • Speech Pathologists
  • Volunteers at AmeriCorps VISTA
  • Volunteers at Peace Corps

Each profession has particular specifications you must meet in order to qualify for loan forgiveness.

However, if you have the Perkins Loan work in the public service and have one of the professions listed above you’ll most likely have your student loan forgiven.

How to apply for this program?

Because the Federal Perkins Loan is disbursed to you directly by your college, you need to go through your school to receive the student loan forgiveness.

So, you must call your school’s Financial Aid Office and ask for a Federal Perkins Loan Cancellation application. They will provide you with the form, and give you directions to the next steps.

If you qualify for this student loan forgiveness program, your debts will end in about five years — depending on your job. 

Even if you are not currently employed in the public service, it is worth it to consider making a strategic career shift in exchange for financial freedom.

5. Military College Loan Repayment Program (CLRP)

The College Loan Repayment Program (CLRP) is the military’s student loan forgiveness program. 

So, if you are willing to commit to the U.S. military for a certain amount of time, college reimbursement will be one of the benefits — among many others.

This program was created as an enlistment incentive for new recruits. This means that the only non-prior service military members qualify for this program.

The maximum amount of payment permitted by Congress is $65,000 per person. However, based on this cap, each military brand has imposed its own limits. 

How to become eligible for this program?

If you feel ready to join the military in exchange for your student loan forgiveness, there are two main things to consider:

  1. You must have been taken your loan before joining the military to qualify;
  2. You must have no prior military experience to qualify.

If you just graduated, and are now wondering how you are going to pay your student loan, this is the perfect scenario for you.  

Keep in mind that each military branch has its own rules and requirements to qualify for the CLRP.

How to apply for this program?

First of all, you must enlist to the military branch of your choice. Make sure to review the details of each branch before enlisting to certify you are getting the highest cost-benefit. 

Depending on the military branch you choose to serve, you will go through a different process to apply for, and receive your student loan repayment. 

Student Loan Discharge Programs

Considering that any student loan discharge program is directed for people going through severe situations, this is not the type of program that you will plan for. 

However, life happens and if you see yourself in one of these situations, these student loan discharge programs will alleviate the circumstances. 

Let’s dive into the most common ones:

6. Student Loan Discharge for Closed School 

Colleges and universities don’t close often — but it does happen. In this case, student-borrowers are protected by the Closed School Discharge.

This program relieves students of their student loans if they are unable to earn their degree because their college or university closed down. This means that if your school closes, you won’t be responsible for any payment, even if you attended the school for a few years. And if you already made some of the student loan payments you’ll be refunded.  

What are the eligibility specifications for this program?

In order to have your student loan discharged, you must meet these specifications:

  1. You must be enrolled at the physical campus that closed.
  2. You must have an incomplete degree.
  3. If you are not enrolled anymore, you must have withdrew at most 120 days before the school closed.
  4. If you are an online student, your school’s physical headquarters must have closed.

What are the steps to receive this loan discharge?

If your university — which was your point of contact — is closed, you can find yourself with no resources to claim for your rights. Lucky the application process is simple.

You must complete the closed school loan discharge application and return it to your loan services. 

Keep in mind that if you wish to continue your education, there are options. In most cases, you can obtain your academic transcripts and transfer to another institution. Then, it will be up to the institution you transferred to decide whether any or all of your completed credits will be accepted.

7. Student Loan Discharge for False Certification 

You can obtain a false certification discharge when a school falsely certifies a borrower’s eligibility for federal aid. 

We never expect this situation to happen, right?

But contrary to what it seems, this type of student loan discharge is not uncommon. You may have an invalid certification and have no clue about it. That’s because there are multiple ways that a certification can become invalid. 

What are the reasons why a certification would be void? 

There are three situations that can cause this condition:

The first situation is if the institution wrongly proofs your “ability to benefit” from the degree. 

For example, if you did not finish high school before starting college, an educational institution cannot allow you to start the college program — unless you take an official exam and pass it. That’s because the educational legislations assume that students are not capable of benefiting from a university degree if they did not complete high school. So universities cannot accept students that did not prove the ability to benefit from a university degree.

The second way is if you are not able to meet the state requirements for employment in the occupation for which you have been trained.

Note that this doesn’t apply to you if you simply cannot find a job. The student loan will be discharged only for people who cannot, by law, perform their professions.

For example: Let’s say that Lucy completed a culinary arts degree, but had a visual impairment disability that prevented her from obtaining a chef license in the state where she lived. Because she cannot practice her occupation, she has the right to have her student loan discharged.

The last circumstance is if the school forged your name on the loan papers or check endorsements, or if you suffered from identity theft in any circumstances. 

This one is pretty self-explanatory — and thankfully, not common.

What are the steps to receive this loan discharge?

If you see yourself in any of the cases described above, you must fill out a form and send it to your loan servicer via mail. Because the shipping address varies depending on the circumstances, it is a good idea to contact your servicer to make sure you are sending the application to the correct address. 

The U.S. Department of Education has a unique form for each specific circumstance.

So, if your false certification comes from the school’s failure to prove your “ability to benefit”, you must fill out the False Certification/Ability to Benefit form

If you’re not able to meet state requirements to practice your occupation, you must fill out the False Certification/Disqualifying Status form.

And if you were a victim of forgery or identity theft, you must fill out the False Certification/Unauthorized Signature form.

9. Student Loan Discharge for Total and Permanent Disability (TPD)

If you are facing a total or permanent disability that makes you unable to work and support yourself and your dependents, you might be eligible for the Total and Permanent Disability Discharge (TPD). 

This is a type of student loan and service obligation forgiveness offered by the U.S. federal government. And it is only suitable for federal student loans and TEACH Grant service obligations.

What are the reasons why a certification would be void? 

To qualify for this program, it does not matter if the disability is physical or mental, but there are some specifications that the U.S. Education Department uses to filter who is eligible and who is not. They consider you to have a total or permanent disability if:

  1. If your physician determines that you have a disability that has lasted for a continuous period of at least 60 months and is expected to last for a continuous period of at least 60 months;
  2. The U.S. Department of Veterans Affairs declares that you have a service-related disability and can no longer work;
  3. If you prove that you receive Social Security Disability Insurance or Supplemental Security Income benefits. In this case, you must have a disability review scheduled within the next seven years. 

What are the steps to receive this loan discharge?

If you fit in any of the descriptions of disability from the U.S. Education Department, there are a few steps you must follow to receive the student loan discharge.

The first step is to start filling out the application. And you can do that online, by phone, or by email. 

If you wish to complete the application via phone or email, here is the contact information:

Phone: 888-303-7818

Email: DisabilityInformation@Nelnet.net

Office Hours: Monday – Friday 8:00 AM – 8:00 PM (ET)

Saturday 8:00 AM – 7:00 PM (ET)

Once you start the application, the next step is to show proof of permanent disability. And that can be through a physician certification, social security award, or veteran affairs determination.

After you have proof of disability you can complete your application, and submit it.

If you need guidance or have questions about applying for  TPD Discharge, you can call 1-844-669-4407.

Repayment Plan Forgiveness Programs

Even though repayment plans are not typical forgiveness programs, they can ease on you after some years of on-time repayments.  

Depending on the repayment plan that you are currently at, and the circumstances you are facing, you can even get your student loans 100% forgiven. 

Let’s see if you’re in luck:

10. Forgiveness with Income-Based Repayment (IBR)

The Income-Based Repayment plan allows your student loan payments to be capped at 10% to 15% of your discretionary income. This is the most common option for students having financial hardship.

If you make your student loan payments through the IBR plan, you might have all your remaining balance forgiven after 20 or 25 years of payment — depending on when you borrowed. 

Who is eligible for this program?

To qualify for this program you must:

  1. Be making consistent payments for at least 20 years;
  2. Certify that your student loan qualify as IBR;
  3. Update their loan servicers every time your income changes

Also, your IBR payments must be less than what your payment would be under the standard repayment plan

In a general manner, this payment plan is ideal for borrowers who expect to stay in low-paying areas but have a big debt.

How to Apply for this program?

To apply for IBR, you must submit an application through StudentLoans.gov

If you prefer, you can also request a paper application to your loan servicer. Keep in mind that you’ll need to provide all documentation, such as proof of income and tax return.

11. Forgiveness with Pay As You Earn (PAYE)

The Pay As You Earn repayment plan is similar to the IBR plan. If you are under the PAYE plan, you will direct no more than 10% of your monthly income to repay your student loans. 

The model of this repayment plan itself is already a great benefit. However, the awesome part of the PAYE is that after borrowers make payments for 20 years, any remaining balance becomes eligible for total forgiveness.

Who is eligible for this program?

To qualify for this program you must meet all the following requirements:

  1. Be making consistent payments for at least 20 years;
  2. Certify that your student loan qualify as PAYE;
  3. Be a new borrower as of Oct. 1, 2007

Also, just like under the IBR plan, the PAYE payments must be less than what your payment would be under the standard repayment plan

How to Apply for this program?

You can apply for the Pay As You Earn program through StudentLoans.gov.

12. Forgiveness with Revised Pay As You Earn (RPAYA)

As you might have figured by the name of the program, the Revised Pay As You Earn is a modified version of the PAYE. 

Just like the PAYE, your payments will be capped at 10% of your discretionary income, and your student loans will be completely forgiven after 20 years.

Who is eligible for this program?

Here is where the difference between the PAYE and the RPAYE lies. 

There’s no income eligibility requirement to get on RPAYE. This means that unlike PAYE, which was available only for loans taken out after Oct. 2007, anyone with eligible loans can apply to the RPAYE plan.

How to Apply for this program?

To apply for the RPAYE plan, you must submit an application through StudentLoans.gov.

13. Forgiveness with Income-Contingent Repayment (ICR)

The process to receive student loan forgiveness through the Income-Contingent Repayment is a little different from the other repayment plans we went over. There is no initial income requirement for the ICR plan.

There are two options to make the payments under this plan: pay 20% of your discretionary income, or pay what you’d pay on a fixed 12-year plan, whichever is less.

Who is eligible for this program?

This is the only repayment plan that is available to borrowers with Parent PLUS loans.

So if you have a Parent PLUS loan, you can consolidate your loans, and apply for ICR.

This means that anyone with eligible federal student loans is eligible for ICR.

How to Apply for this program?

You can apply for ICR through StudentLoans.gov

Keep in mind that with this plan, your payments could end up being higher than the standard 10-year repayment plan. That’s because you have to submit your income for the necessary adjustments every year.

Other Considerations 

Did you fit in the specifications of any of these programs?

If you did, you already know what to do. And you can start celebrating because your financial freedom will be on the way soon.

Just keep in mind that most student loans that are forgiven can be taxed as income. So, don’t be surprised with a potentially large tax bill.

However, if you don’t fit in one of these student loan forgiveness specifications, it is not the end of the world. There are other alternatives. 

If you are having difficulties to pay your loans, you can start by accessing the income-driven repayment programs mentioned above. This will considerably reduce your monthly payment.

Another option to overcome your debt is by student loan refinancing. Doing that will give you the chance to readjust your monthly payments. 

But, if you’re part of the skilled workforce, the best alternative is to look to be employed by a company that treats student loan repayment as a employee benefit. More and more companies have been adhering to this employee benefit, which makes a huge impact on employee’s lives and of course, in the country’s economy.

The Bottom Line

Just picture yourself as a financially free person. Sounds great, doesn’t it?

You must get away from the student loan burden if you want peace of mind. 

And the sooner you deal with this, the earlier you will achieve your much-dreamed debt-free life.

Keep in mind: If your student loan debt is a long and dark tunnel, financial freedom is the long-awaited light at the end of the tunnel.

And if you make the right choices and take the best shortcuts, the light at the end of the tunnel can be reached faster than you think. 

You got it.

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