Do You Qualify for Student Loan Forgiveness Programs?

/ BY / Managing Debt

Good news for many students struggling to make student loan payments-you may be eligible for government student loan forgiveness programs. According to the Consumer Financial Protection Bureau (CFPB), more than 25 percent of Americans qualify for various student loan forgiveness programs.

For the millions of Americans who carry large amounts of student loan debt, these programs can provide much-needed relief. A few to consider include:

Public Service Loan Forgiveness

In 1997, Congress created the College Cost Reduction and Access Act designed to forgive the student loans of full-time employees working in public service and government positions, provided they meet certain criteria. The Act defines a public service employee as “one who is employed with a federal, state, or local government agency, entity or organization, or a non-profit that has been designated as a 501(c)(3) tax-exempt organization.”

Agencies, organizations, and jobs that fall under this category include:

  • Public safety and law enforcement, including fire and police
  • Military
  • Public health, including nurses, nurse practitioners, and full-time employees in clinical or health care support occupations
  • Education, including public school teachers and early childhood education professionals in state-funded Head Start or Pre-K programs as well as school librarians
  • Social work in public agencies
  • Legal services, including prosecutors, public defenders, and legal advocates
  • Public librarians
  • Employees of tax-exempt, non-profit organization

In order to qualify for forgiveness, you must have made at least 120 payments towards your loan on or after October 1, 2007. You also must have been employed in a public service job for each of the 120 payments. For most people who haven’t deferred payments, this equates to 10 years of working full-time.

But it’s not just what you do and how long you’ve done it that determines whether you qualify. Only Federal Direct Loans are eligible for forgiveness, including:

  • Subsidized and unsubsidized Federal Direct Stafford Loans
  • Federal Direct PLUS loans
  • Federal Direct Consolidation loans (If you have a FFEL loan or Perkins loan, you may consolidate into Federal Direct Consolidation loans to take part in the forgiveness program)

Stafford Loan Forgiveness Program for Teachers

This program, offered by the US Department of Education, is designed for full-time elementary and secondary school teachers who have spent five years teaching in designated low-income school districts. (To find out if your school qualifies, consult the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. All elementary and secondary schools operated by the Bureau of Indian Education also qualify.)

Although this program forgives loans in half the time required by the Public Service Loan Forgiveness, it will only forgive Federal Direct loans up to $17,500. Of the five full-time required years, at least one year must have been completed after 1998. Teachers who have completed all five years before October 1, 2004 may still be eligible for forgiveness of up to $5,000.

NURSE Corps Loan Repayment Program

Registered nurses who enter this program spend two years working in designated nonprofit hospitals, clinics, and other medical or mental healthcare facilities in Health Professional Shortage Areas throughout the US. In return, 60 percent of unpaid nursing school loans are forgiven. Nurses also have the option of working an additional year in designated facilities to have another 25 percent of the unpaid balance forgiven.

For more information, visit their website:

Students who are nearing graduation and are worried about repaying their loans could also benefit from these programs by directing their careers towards the public sector. And if you’re already in a public service position, loan forgiveness programs may be a light at the end of the student-loan debt tunnel.

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