If you’re planning to take advantage of any type of student loan forgiveness, this post is for you.

Estimated read time 4 min.

What types of student loans can be forgiven?

 

Federal student loans are the only loan types eligible for forgiveness. Private student loans don’t have any federal loan forgiveness options, any company that suggests they can forgive your private student loans is almost certainly a scam.

 

What are the options for student loan forgiveness?

 

Public Service Loan Forgiveness or PSLF: PSLF forgives the amount of student loan debt remaining after 120 payments have been made while employed full-time for a qualifying employer.

 

Teacher Loan Forgiveness: Teacher Loan Forgiveness forgives up to a combined total of $17,500 of student loan debt if you teach full-time for five consecutive years in specific schools that serve low-income families.

 

Income-driven Loan Forgiveness: Income-driven loan forgiveness forgives the amount of student loan debt remaining after 20-25 years of income-driven monthly payments.

 

Is student loan forgiveness taxed?

 

Loan amounts forgiven under income-driven loan forgiveness are taxed as income. Loan amounts forgiven under Teacher Loan Forgiveness and PSLF are not taxable.

 

How do I get student loan forgiveness?

 

Each loan forgiveness program is different and has it’s own eligibility nuances. The best place to start is by reading about the program you’re interested in on the Federal Student Aid (FSA) website. Here are the links to the respective programs.

Public Service Loan Forgiveness (PSLF)

Teacher Loan Forgivness

Income-Driven Loan Forgiveness

 

Here are a few general principles to make sure you remain eligible for student loan forgiveness:

• Make your monthly payments on time and keep your loans in good standing. Defaulted student loans aren’t eligible for loan forgiveness.
• Do not refinance any loans you want forgiven. Refinanced loans = private loans. Private loans don’t qualify for student loan forgiveness!
• Submit your income documentation annually to keep your income-driven repayment plan active. If you don’t submit this information annually you will get switched to a standard repayment plan which will cost you more money.

 

Are you considering loan forgiveness? Are you almost there, or have you already had student loan debt forgiven? Share your thoughts on loan forgiveness below or on the Repayable Facebook Page.

 

See you next week for a post about common student loan forgiveness mistakes that can cost you time and money.