Student loans are a necessity for just about every college student these days, and unfortunately, many students don’t take advantage of great programs and incentives to save money on their college loans. There’s not a way to make loans just disappear, but there are plenty of ways to pay less on student loans.
Some student loan forgiveness programs are based on the occupation the loan holder works in, some depend on the particular state, and some are open to everyone. And these student loan forgiveness options aren’t necessarily limited to people that are having a hard time paying, either. Some of them are just free money for college loans!
Public Service Loan Forgiveness
- People who work for a non profit organization – a 501(c)(3) company – can get their loans forgiven after making 120 eligible payments
- It’s smart to enroll in an income based repayment program that will also qualify for PSLF to maximize the amount of the loan that’s forgiven
- There is no limit to the amount that can be forgiven under a Public Service Loan Forgiveness Program
This is one of the most popular loan forgiveness programs. The Public Service Loan Forgiveness program is actually a federal program available to people who work in public service jobs. What’s a public service job? Just about anyone who works for a non-profit qualifies!
Employment must be full time, and religious non-profits don’t count. It doesn’t have to be at the same place, but there must be 10 years of employment and payments made. Also important to note is that payments have to be made through a qualified program like: Income-Based Repayment (aka IBR), Pay As You Earn Repayment (aka PAYE), Income Contingent Repayment (aka ICR), Revised Pay As You Earn (aka REPAYE), and the standard repayment program.
Income Based Repayment
- People who make income based payments for 25 years will be relieved of their student loan debt
- A very important note here is that any loan forgiven will be taxed as income, which could lead to a huge tax bill
It’s not technically forgiveness, but this is one of the top ways to save money on a student loan. The Income Based Repayment program caps payments at only 15% of a person’s income. After making payments for 25 years, any remaining balance is forgiven.
This student loan payment plan is open to all loans, with the only qualification being that the program is only open to people who would have a lower payment than normal by signing up. The Income Based Repayment Option is really the best option only for people who plan to stay in a low paying field.
Teacher Loan Forgiveness
- Any teacher who works at an eligible school can have part of their student loans forgiven under the government’s Teacher Loan Forgiveness Program
- Loans that were taken out before October of 1998 are not eligible for TLF
- For a loan to be forgiven through Teacher Loan Forgiveness, it cannot be in default, and the teacher must have worked at a school for at least five years
The government realizes that teachers are vital, and also realizes they don’t get paid what they’re worth. That’s where the Teacher Loan Forgiveness Program comes in to help. This program is only available to teachers who work in what’s classified as low income schools, though.
For people who are trying to get a loan forgiven through Teacher Loan Forgiveness, it’s important for them to earn as many state certifications and licenses as they can. That’s because they’ll be considered a “highly qualified” teacher and will have more of their loans forgiven. Highly qualified teachers who are over elementary or secondary programs can get up to $5,000 in loan forgiveness, while those who teach math or science, or work in special education can get up to $17,500 in loans forgiven.
Any federally held loan can be forgiven through the Teacher Loan Forgiveness program.
Doctor and Nurse Student Loan Forgiveness Programs
Not all states take part, but certain ones do have special programs that help doctors have their student loans forgiven. Most of these do require a doctor to hold a license in that state, and almost all of them have extra incentives for people who choose to work with more rural parts of the population or people who are in more need.
- New York: Up to $10,000 each year for two years
- Washington: Up to $35,000 a year for two years (only in undeserved or rural areas)
- Pennsylvania: One of the best with up to $100,000 for working two years in an “undeserved” program
For people who have a Federal Perkins Loans, working in nursing could mean that your loans are 100% forgiven. It does take five years of full time employment though. People working in undeserving communities can also have up to 60% of their loans forgiven through the NURSE Corps Loan Repayment Program (but only in a Critical Shortage Facility).
Special Forgiveness Programs for Lawyers
Some states are so in need of qualified lawyers that they’ll actually forgive student loans for lawyers.
- Washington D.C.: Through the District of Columbia Bar Foundation Loan Repayment Assistance Program, attorneys can get up to $12,000 in credit a year
- Florida: Up to $5,000 a year can be forgiven through the Loan Repayment Assistance Program (notable here is that the program is open to part time employees as well, a rarity in these programs)
- Michigan: In this state, the John R. Justice Student Loan Repayment Program will cover up to 10k each year for people who work in certain practices. Up to $60,000 can be forgiven.