While the Supreme Court debates President Joe Biden’s student loan relief plan, some borrowers have other avenues for loan forgiveness. Federal programs like Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness, for instance, can cancel part or all of your student loans if you qualify. Income-driven repayment (IDR) plans can also end in loan forgiveness at the end of your repayment term.
Who Is Eligible for Student Loan Forgiveness?
The eligibility requirements for student loan forgiveness vary by program. Here are the criteria for a few popular options:
- PSLF. The PSLF program requires that you work full-time for 10 years in a qualifying organization, which includes government agencies and 501(c)(3) not-for-profits. You also must make 120 qualifying payments on your student loans, specifically on an IDR plan.
- Teacher Loan Forgiveness. This program requires that you teach full-time for five consecutive years in a low-income school or educational service agency. Depending on the subject you teach, you could qualify for up to $17,500 in student loan forgiveness.
- NURSE Corps Loan Forgiveness. This federal program forgives up to 60% of your student loan balance after two years and an additional 25% after a third year. Requirements include working as a registered nurse, nurse practitioner or nurse faculty member who serves a high-need population in a critical shortage area.
- IDR loan forgiveness. You can qualify for student loan forgiveness of your remaining balance after 20 or 25 years on an IDR plan, as long as you’ve made your payments on time.
Only federal student loans are eligible for federal loan forgiveness programs, but the specific eligibility requirements vary by program. That said, you may be able to find student loan repayment assistance options for both federal and private student loans from your state, a private organization or your employer.
Eligibility Requirements for Biden’s Loan Forgiveness Plan
Biden proposed mass cancellation of federal student loans for borrowers who meet the following eligibility requirements:
- Hold federal student loans from the Direct loan program, such as Direct subsidized loans, Direct unsubsidized loans, graduate PLUS loans, parent PLUS loans or consolidation loans
- Borrowed loans before June 30, 2022
- Make less than $125,000 per year as a single filer or less than $250,000 per household
Borrowers who received a Pell Grant in college could receive $20,000 in forgiveness, while borrowers who didn’t could get up to $10,000. However, this plan has come under legal challenges and is currently on hold until the Supreme Court reaches a decision.
How To Apply for Student Loan Forgiveness
In terms of how to apply for student loan forgiveness, the application processes will vary by program. Here are a few examples:
- PSLF. Submit the PSLF & Temporary Expanded PSLF (TEPSLF) Certification & Application to your loan servicer by using the PSLF Help Tool as soon as possible to make sure you’re making qualifying payments. It’s a good idea to submit this form every year, as well as every time you change employers, and to keep a copy for your records. When you’ve reached 10 years of service, you’ll submit a final PSLF form, which will require certification from your current qualifying employer. You’ll send this form to MOHELA, the federal loan servicer that administers the PSLF program.
- Teacher Loan Forgiveness. Once you’ve finished your required five years, you can apply by submitting a Teacher Loan Forgiveness Application to your student loan servicer. You’ll need to have the certification section of the application completed by the chief administrative officer of your school or agency. If you’re applying for forgiveness with multiple loan servicers, you’ll need to submit a form to each one.
- NURSE Corps program. You can apply for this student loan forgiveness program online after creating an account on the Health Resources & Services Administration’s (HRSA) customer service portal. HRSA suggests reviewing this guide before you apply.
If you have questions about how to apply for student loan forgiveness, your loan servicer might be able to help you navigate the process. Make sure to fulfill all the requirements in a timely manner to help the process go smoothly.
How To Apply for Biden’s Loan Forgiveness Plan
Biden’s plan did not offer automatic student loan forgiveness for qualifying borrowers. Instead, borrowers had to apply on the Federal Student Aid website.
The application was short and straightforward. It was a simple form that asked for your:
- Name
- Social Security number
- Date of birth
- Phone number
More than 26 million borrowers applied for Biden’s loan forgiveness program after it was announced in fall 2022. However, the application is now offline while the plan is under litigation at the Supreme Court.
If you want to stay updated on news and announcements about the program, you can subscribe to the Education Department’s newsletter.
How Long Does It Take for Student Loan Debt To Be Forgiven?
The amount of time it takes for student loan debt to be forgiven depends on the rules of the program. PSLF, for instance, requires 10 years of working in public service, while Teacher Loan Forgiveness asks for five consecutive years of teaching in a school.
The NURSE Corps loan forgiveness program only requires a two-year commitment in an underserved area. Borrowers on income-driven plans will have to wait 20 to 25 years to see their balances discharged.
Biden’s loan forgiveness plan, on the other hand, would have offered much faster relief. According to the Education Department, it would have forgiven loans just four to six weeks after a borrower applied.
Can You Improve Student Loan Forgiveness Chances?
You can improve your chances of student loan forgiveness by carefully reviewing the eligibility requirements of the program you’re pursuing. Each program has very specific requirements, from the amount of time you work to the type of student loans you hold to the repayment plan your loans are on.
Unfortunately, many borrowers have found out the hard way that they didn’t qualify for PSLF after years of working in public service. Many applications have been rejected because the borrower wasn’t on the right repayment plan or didn’t fulfill the service requirements.
One way to stay on track for PSLF is to submit the PSLF form every year. By submitting this form, you can make sure your employment is eligible for PSLF, as well as create a paper trail over the years of your qualifying service.
It can also help to keep documentation of everything you’ll need to apply, such as student loan statements, W-2 forms and pay stubs. Reach out to your loan servicer periodically to make sure you’re on track to receiving loan forgiveness.
If you need extra assistance, a nonprofit student loan counselor might be able to guide you in the right direction.
More From Advisor
- Private Student Loan Rates: May 1, 2023—Loan Rates Decrease
- Student Loan Refinance Rates: May 1, 2023—Loan Rates Drop
- Private Student Loan Rates: April 24, 2023—Loan Rates Edge Down
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
