Federal student loans are sometimes eligible for forgiveness, which frees the borrower from having to repay the loan in full. Because there are several different loan forgiveness programs, the policies for qualifying depend on which program you use. After you have fulfilled the qualifying conditions, download and fill out the appropriate loan forgiveness application to have the qualifying portion of your loan forgiven.
Public Service Job
Anybody working a job that the federal government considers a public service position is eligible for loan forgiveness after 10 years of working and making loan payments. If you are on a 10-year repayment schedule, you will repay your loans before you are eligible for forgiveness. Choose a longer repayment schedule instead if you plan on working in the public sector. Employees in public health, government agencies, charitable non-profit organizations and public schools are generally eligible for forgiveness after 10 years, but confirm with your human resources staff that your job qualifies. In addition, you must be simultaneously working the job and making loan payments for 120 months before you qualify.
Teacher in Low-Income Community
The federal government forgives up to $17,500 of Stafford loans for teachers who work for at least five consecutive years in a primary or secondary school in a low income-community. Look up the school in the Teacher Cancellation Low Income Directory or ask the school administrator whether the school qualifies before taking the job. Only math, science and special education teachers are eligible for up to $17,500 of loan forgiveness, at the time of publication. All other teachers are only eligible for up to $5,000 of loan forgiveness.
Anybody who repays federal student loans under the income-based repayment program is eligible to have any remaining loan balance canceled after 25 years of payments. Find out if you qualify to repay your loans on the income-based repayment program by using the calculator on the Department of Education website to determine if your payment amount is less than it would be on a standard 10-year repayment schedule. If you stay on income-based repayment and keep your loan in good standing for 25 years, you qualify for debt forgiveness.
Your particular employer might have its own in-house programs to forgive your loan debt after you work for a specific amount of time. The employer might also know about state or local programs not listed on the federal student aid website. Therefore, if you are not sure whether your job qualifies you for any type of federal student loan forgiveness, ask your human resources director. That simple question could save you from having to repay thousands of dollars in student loan debt.