Behind mortgage debt, student loan debt is the second-highest consumer debt category. In 2019, approximately 45 million borrowers collectively owed $1.5 trillion in student loan debt. It’s no surprise that so many college graduates and young adults wonder if student loan forgiveness is possible.

The short answer: yes, it’s possible. People can receive student loan forgiveness, but only for if they meet very specific criteria. Find out more information about student loan forgiveness and whether or not you might qualify for it.

What Is Student Loan Forgiveness?

Put simply, student loan forgiveness means that the borrower ends up paying less than what they owe on their student loans. For the most part, student loan forgiveness is limited to federal student loans.

How Do You Qualify for Student Loan Forgiveness?

There are generally three tracks through which you might be able to qualify for student loan forgiveness:

• Your chosen career
• Existing financial situation
• Student loan discharge, a rare option for most people

If you don’t have the right career, the right type of loans or the right financial situation, you may not qualify for student loan forgiveness.

Student Loan Forgiveness

Income-Driven Repayment Plans

Four income-driven repayment plans are available for federal student loans and can help you get some of your unpaid student loans forgiven. These include:

• Income-based repayment
• Income-contingent repayment
• Pay as You Earn
• Revised Pay as You Earn

For most people, enrolling in one of these programs is likely their best bet at securing some form of student loan forgiveness. But you do have to meet specific financial circumstances.

Income-Based Repayment

To qualify for this option, you must have a high debt-to-income ratio. People who have fallen behind on their payments and have had it affect their credit might qualify for this option. Federal Direct loans and Federal Family Education Loans (FFEL) can be repaid using this method. Any remaining balance on your student loans is forgiven after 25 years, unless you’re a new borrower as of July 1, 2014, in which case your unpaid balance is forgiven after 20 years.

Income-Contingent Repayment

This is the only income-based repayment option for Parent PLUS loan borrowers. Any remaining balance is forgiven after 25 years.

Pay as You Earn (PAYE)

The payment amount for the PAYE option is generally 10% of your discretionary income, but payments will not exceed what would be due under the 10-year standard repayment plan amount.

Revised Pay as You Earn (REPAYE)

Available to anyone with a Federal Direct loan, except for those who have parent PLUS loans or direct consolidation loans that included a parent PLUS loan.

If you borrowed the loans under REPAYE for undergraduate study, any remaining balance is forgiven after 20 years. If you borrowed student loans under REPAYE for graduate study, the payment plan will last for 20 to 25 years, depending on the repayment plan.

It’s important to know that forgiveness is not automatic. Once you hit the 20 or 25-year mark, you have to apply for student loan forgiveness.

Is an Income-Driven Repayment Plan Right for Me?

This is based on your financial situation. If you’re struggling to pay for your loans and the interest is accumulating, it might be a viable option.

On the other hand, if you’ve made regular, on-time payments and you haven’t really struggled to make monthly payments, there may not be a balance left to forgive after 20 or 25 years.

Also, you have to reapply each year for income-driven repayment plans, so it’s possible your monthly payment could change each year. And, if you end up with a better paying job, it’s possible you may not qualify anymore for these types of plans.

Income-driven repayment plans offer forgiveness to the widest variety of borrowers because it has the least specific criteria. The other two options only apply to specific careers or rare circumstances.

Public Service Student Loan Forgiveness

Through the Public Service Loan Forgiveness (PSLF) Program, students who pursued careers in the public service sector are able to lessen the burden of their student loans. These student loans must be from the government, either a Direct Federal, Direct Plus or Direct Consolidation. Private student loans don’t qualify, unless you combined multiple loans into a Direct consolidation loan.

To qualify for the PSLF program, you have to work at one of the following.

• Any government organization, as long as it’s not a partisan political one, at the local, state, or federal level
• 501(c)(3) not-for-profit organizations
• Other tax-exempt not-for-profit organizations
• Peace Corps or AmeriCorps

Other employers that may qualify include “other types of not-for-profit organizations that provide certain types of qualifying public services” in a dozen categories, including law enforcement, education and public health.

The U.S. Department of Education provides a PSLF Employment Certification Form for you to submit if you’re not sure if your employer qualifies.

Other PSLF Qualifications

In addition to working in the public sector, you also must meet this criteria to qualify for this type of student loan forgiveness program.

• Full-Time Employment.You must be employed full-time in this public sector job, which is considered 30 hours a week
• On-Time Monthly Payments.You have to have made at least 10 years of on-time monthly payments toward your student loans. That’s 120 payments. And if you made payments when you didn’t need to, such as when you were in school, during a grace period or if your loans are in deferment, forbearance or default, those payments don’t count.

In addition, if you’re already enrolled in an income-based repayment plan as mentioned above, you may qualify for this PSLF Program.

Some student loan forgiveness programs are even more tailored to certain professions, including:

• The U.S. Department of Education offers quite a few student loan forgiveness programs. Plus, there a few state-sponsored student loan forgiveness programs worth looking at.
• Some programs, such as the NURSE Corps Loan Repayment Program, provide loan forgiveness for RNs and nurse practitioners who work in high-need population areas or in areas where there is a critical nursing shortage.
• The Department of Justice offers a student loan forgiveness program for practicing attorneys.

Is the Public Service Loan Forgiveness Program Right for Me?

If you’re thinking of going into public service specifically to obtain student loan forgiveness in the future, it’s probably not a good idea.

Mark Kantrowitz, an expert on student loans and publisher of college and scholarship search site Cappex, says “I wouldn’t recommend that you decide to go into an occupation specifically to get forgiveness because it really is a long-term commitment. You’re [also] putting a lot of faith in the federal government to live up to their promises.”

If you are in the public sector and you plan to stay there, it may be a good option to investigate. Just make sure you keep careful records—keep the pay stubs associated with each of the 120 payments you make and maintain a spreadsheet that reflects each payment you made.

If you make payments online, make sure to print out your payment history every so often in case you need to provide proof of timely monthly payments.

Student Loan Discharge

Most people won’t qualify for this option, as it’s only awarded in rare circumstances, but it does exist for those who meet the criteria. It’s generally awarded by a judge and may apply to both federal and private student loans. Discharge is generally granted under one of these circumstances:

• Permanent disability
• Death
• Identity theft
• School’s unauthorized signature of the loan without your knowledge
• Bankruptcy—this is rare because demonstrating undue hardship is difficult
• False certification of student eligibility

For more information about student loan forgiveness and other important things you need to know about student loans, visit our Student Loan Learning Center.