Understanding Student Loan Forgiveness Programs

Student loan forgiveness occurs when your student loan provider cancels all, or part, of your student loan. There are a number of programs that will all you to qualify for student loan forgiveness. Because cancelling your loan will cause your loan provider to lose money, such programs usually come with steep requirements. That is why you should consider student loan forgiveness a last resort, something you should fall back on when all your other options failed.

It should also be noted that most of those programs are geared exclusively towards certain types of federal loans - getting student loan forgiveness for private loans is much harder.

Public Service Forgiveness

If you made no less than 120 monthly payments after October 1, 2007, you are eligible for loan forgiveness if you work full-time in certain public service jobs. This program applies to direct federal loans. Loans that are made under Federal Family Education Loan Program (FFEL program) also qualify if they are consolidated with at least one direct loan. This includes Perkins loans and Health Professions and Nursing loans, among others.

For the purpose of the Public Service Loan Forgiveness program, public service jobs are jobs that fall under the following categories:

  • Government jobs - jobs with agencies and organizations that are part of Federal, state, local, or tribal government structures.
  • Public child or family service agency jobs - jobs with organizations that provide public services for families.
  • Private non-profit jobs - jobs with non-profit businesses that provide any kind of public services. This may include anything from public health clinics to public libraries. 

Volunteer Forgiveness

You may be eligible for loan consolidation if you volunteer for one of the three programs listed below:

  • AmeriCorps - under federal law, serving for up to twelve months in this organization is an equivalent of a public service jobs. The conditions for loan forgiveness and the types of loans that may be forgiven are the same.
  • Volunteers in Service to America (VISTA) - this anti-poverty organization is currently under the AmeriCorps umbrella, so anyone who volunteers for it qualifies for student loan forgiveness under the same conditions as a regular AmeriCorps volunteer.
  • Peace Corps - if you have a Perkins loan, 15% of the loan will be cancelled for each year of service.

Teacher Forgiveness

If you become full-time teachers in a public school that serves predominantly low-income areas, a portion of your Perkins Loan will be forgiven. This program forgives 15% of your loan for each of the first two years, 20% for each of the third and fourth year and 30% for the fifth year. In other words, if you teach for five years, your entire loan may be forgiven.


Need a Student Loan? Click here!
blog comments powered by Disqus