Loan Forgiveness
Public Service Loan Forgiveness (PSLF) Program
The Public Service Loan Forgiveness (PSLF) program is intended to encourage individuals to enter and or continue to work full time in certain public service jobs. Borrowers may qualify for forgiveness on the remaining balance on Direct Loans after one has made 120 qualifying payments on those loans while employed full time by certain public employers. Payments made while enrolled in school do not count as part of the 120 qualifying payments. Loans that are eligible for forgiveness under the PSLF program include loans from the Direct Loan Program, the Federal Family Education Loan (FFEL) Program, and Federal Perkins Loans are also eligible.
Loans that are a part of the Federal Family Education Loan (FFEL) Program as well as Federal Perkins Loans are only eligible for Public Service Loan Forgiveness if they are consolidated into a Direct Consolidation Loan. However, only the payments made to the new Direct Consolidation Loan will count towards the 120 qualifying repayments for the program. Payments made prior to consolidation will not count towards qualifying PSLF payments. Also if one made qualifying payments on a Direct Loan and then consolidated it, one must make 120 qualifying payments on the new Direct Consolidation Loan.
Teacher Loan Forgiveness and Cancellation Program
The Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue in the teaching profession. Borrowers dependent upon their eligibility may receive loan forgiveness based off of their teaching occupation. Loans that are eligible for forgiveness under the Teacher Loan Forgiveness program include Direct Subsidized and Unsubsidized loans and Subsidized and Unsubsidized Federal Stafford Loans. Direct Parent PLUS Loans are not eligible for this type of forgiveness. If the qualifications for eligibility are met one may be eligible for up to a combined total of $17,500 in forgiveness.
The Teacher Loan Cancellation Program is only applicable to Federal Perkins Loans. Up to 100 percent of the loan may be cancelled dependent upon if one meets the eligibility requirements. One can apply for cancellation by requesting the appropriate forms and information from the office that administered the Federal Perkins Loan and from there it is the school’s responsibility to determine whether or not one qualifies for cancellation.
Eligibility
- Must not have had an outstanding balance on Direct Loans or Federal Family Education Loan (FFEL) Program loans as of October 1, 1998, or on the date that one obtained a Direct Loan or FFEL Program loan after October 1, 1998
- If one is in default on a subsidized loan, borrowers are not eligible for forgiveness of that loan unless one has made satisfactory repayment arrangements with the holder of the defaulted loan
- The loan(s) for which one is seeking forgiveness must have been made before the end of one’s five academic years of qualifying teaching service
- Any time a borrower spends teaching to receive benefits through AmeriCorps cannot be counted toward one’s required five years of teaching for the Teacher Loan Forgiveness Program
- A borrower must have been employed as a full time teacher for five complete and consecutive academic years, and at least one of those years must have been after the 1997-1998 academic year
- One must be employed in an elementary school or secondary school that:
- is in a school district that qualifies for funds under Title I of the Elementary and Secondary Education Act of 1965, as amended
- has been selected by the U.S. Department of Education based on a determination that more than 30 percent of the school’s total enrollment is made up of children who qualify for services provided under Title I
- is listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits
- if this directory is not available before May 1st of any year, the previous year’s directory may be used
- If one’s school meets the above requirements for at least one year of a borrower’s teaching service, but does not meet these requirements during subsequent years, one’s subsequent years of teaching at the school may be counted toward the required five complete and consecutive academic years of teaching
How to have your Federal Student Loans Forgiven, Cancelled, or Discharged
Learn about more ways to get your Federal Student Loans Forgiven, Canceled or Discharged.