7 tips for getting federal student loan forgiveness

Imagine a financial future where you have more money to save, buy a home, start a family, pursue your passions, or invest. That future might feel out of reach right now, but getting rid of your debt could bring it closer. 

Student loans are not in the same category as credit card debts and other unsecured debts. Those debts may be eligible for debt resolution (negotiating with your creditors to accept less than you owe). But even for student loans, some debt forgiveness is possible.

Getting student loan forgiveness isn’t easy or quick. Here are our tips to help you figure out if forgiveness is a practical option for you. 

Getting federal student loan forgiveness

Here's a quick explainer of how federal student loan forgiveness works. Usually, if you make a certain number of payments or meet certain criteria (we’ll explain that), the remainder of what you owe is canceled. When student loans are forgiven, you don't have to pay anything more.

Pro tip: While some forgiven debt may be taxable, student loans are usually an exception.

1. Know your options

There's more than one route to get student loan forgiveness. Programs include:

• Public Service Loan Forgiveness (PSLF)

• Teacher loan forgiveness

• Nursing student loan forgiveness

• Military loan forgiveness

• State-sponsored options

These programs help borrowers with federal student loans. Federal loans can also be discharged if you become permanently disabled, your school closes while you’re enrolled or soon after, or you believe your school used misleading practices to get you to take out loans. Each of these has extensive rules and requirements. 

In our examples, we’ll focus on PSLF. Many of the same ideas apply to the other varieties of loan forgiveness.

What if you have private student loans?

Federal loan forgiveness doesn't apply to private loans. Some private student loans may be eligible for debt resolution, but it depends on the lender and your circumstances. You might also qualify for other types of student loan relief, including temporary forbearance programs (a payment pause), or loan repayment assistance through your employer. 

2. Make sure your loans qualify

Federal student loan forgiveness applies to specific loans. For example, if you're interested in PSLF, you'd be eligible if you owe:

• Direct Subsidized or Unsubsidized Loans

• Direct PLUS Loans

• Direct Consolidation Loans

Federal Family Education Loans and Perkins Loans don't qualify unless you consolidate them into a Direct Loan.

If you’re not sure what kinds of loans you have, you can visit studentaid.gov and log into your account. If you think you have more loans than what’s on your dashboard there, you might have private student loans. You can get information from your loan servicer or your lender. Check your monthly statements for contact information.

3. Review the requirements

Student loan forgiveness isn't automatic; you need to meet certain requirements first. 

For example, here's what you need to do to qualify for PSLF:

• Enroll in an income-driven repayment (IDR) plan

• Work 30 hours or more per week on average for an eligible employer

• Make 120 qualifying payments on your loans

“Qualifying payments” must be for the full amount on your bill. Payments don't have to be consecutive to count. 

The long list of eligible employers includes government entities and qualifying nonprofit organizations. Volunteer service with AmeriCorps or the Peace Corps also counts as qualifying employment for PSLF. 

4. Automate your payments

Putting student loan payments on autopilot helps reduce the chance of paying late. Paying on time every time could help you:

• Dodge late fees

• Avoid credit score damage from late payments

• Qualify for an interest rate discount (if your loan servicer offers one)

• Make qualifying payments toward PSLF (if you're pursuing that option)

If you can't or don't want to set up automatic payments for student loans, set up payment reminders. That way, you get a heads-up when a due date approaches. 

5. Keep accurate records

Student loan forgiveness usually requires documentation to prove you've met the requirements. Creating a paper trail helps you make sure that you have everything you need to apply for forgiveness. 

If you're working toward PSLF, for instance, it's a good idea to keep:

• Documentation showing your work history and employment

• Records of qualifying payments

• Copies of any PSLF paperwork you've submitted or response forms you've received

6. Recertify each year

If you plan to apply for PSLF and are currently enrolled in an income-driven repayment plan, you'll need to recertify your income each year with the Department of Education. The Department of Ed will confirm that you're still eligible for the plan, based on your income and household size. 

You can recertify online through the StudentAid.gov website, where you tell the Department of Education if there have been any changes to your household size or income in the last year. 

While you're logged in, you can also review IDR options if you're interested in switching to a new payment plan. 

7. Talk to your lender or loan servicer

If you have federal student loans, your loan servicer can help you navigate your forgiveness options. They should be able to tell you what forgiveness programs you might qualify for, and what you need to do for each. 

If you have private loans, talk to your lender. You won't be able to get your loans forgiven through a federal program. But your lender may have other options to manage student loan debt. 

Student loan forgiveness could offer financial relief

In the good debt vs. bad debt debate, student loan debt is usually in the "good" category because an education is presumed to improve your earning potential. Good or not, student loan debt can become bigger and last longer than you ever thought it would. And in the meantime, your circumstances could change. Seeking forgiveness for student loans that qualify for it could be a big step in the direction of taking control of your finances. 

It’s a great idea to talk to a debt expert about whether filing bankruptcy with student loans is an option. While the eligibility requirements are strict, some borrowers may be able to clear their debt for less than the full amount.