It’s little surprise that many of America’s 45 million student loan borrowers are looking to loan forgiveness programs to ease their burden.
But while loan forgiveness sounds like a dream come true, you might be waiting a while: Some programs don’t discharge your loan for a decade or more.
If you’re looking to get rid of your student loans ASAP, here are your options — from the quick to the slow and everything in between.
1. Student loan discharge for special circumstances
Amount of time for loan forgiveness: Immediately
If you have a special circumstance that makes you unable to pay your loans, student loan discharge programs could get rid of your balance right away. While most borrowers probably won’t have these exceptional circumstances, they’re worth noting in case you qualify.
Among the criteria that could discharge your loan balance immediately:
- Total and permanent disability discharge: For borrowers who have suffered a permanent disability.
- Closed school discharge: If your school closed while you were enrolled or shortly after you withdrew
- Discharge for false certification, unauthorized payment or unpaid refund: For victims of identity theft or if your school didn’t pay a refund owed to the government or a lender
- Borrower defense discharge: Available to those who can prove they were defrauded by their school — though note that the courts just recently ordered the Department of Education to reinstate this rule, so there’s a large backlog of applications
- Discharge in bankruptcy: If you can qualify under Chapter 7 or Chapter 13 bankruptcy (rare but not impossible)
Apart from the time it takes to collect and process documents, these loan discharge programs should cancel your student loan debt right away if you qualify (assuming there are no more roadblocks from the federal government).
2. Student loan repayment assistance programs (LRAPs)
Amount of time for loan forgiveness: Varies, but typically two to three years
Chances are, you don’t have a special circumstance that qualifies you for the loan discharge programs above. But you might be eligible for a loan repayment assistance program (LRAP) from the federal government, state government, private organization or university.
Unlike forgiveness programs, which cancel your debt balance, most LRAPs give you money to pay off a big chunk of your debt at once. Some will also pay off a percentage of your debt each year until your debt is gone.
Most LRAPs have professional requirements, asking that you work in a certain field for a few years, often in a nonprofit organization or with an underserved population. But unlike the Public Service Loan Forgiveness (PSLF) discussed below, these programs don’t ask for 10 years of service.
Some jobs that qualify for various loan repayment assistance programs include doctors, nurses, teachers, veterinarians, pharmacists, dentists and military service members and veterans. But there are still others — the state of Maine, for example, also has an LRAP for STEM professionals.
Here are just a few examples of LRAPs so you can get a sense of how they typically work.
- NURSE Corps Loan Repayment: Forgives up to 60% of your student loan balance after two years of working as a nurse in an underserved area, plus an additional 25% for a third year of service.
- John R. Justice Student Loan Repayment Program: Awards up to $10,000 per year in student loan assistance to public sector lawyers for a maximum of $60,000.
- National Health Service Corps (NHSC) loan repayment assistance: Provides up to $50,000 to health care providers who commit to working at an eligible site for two years.
- California State Loan Repayment Program: Offers up to $110,000 to health care providers who commit to two to six years in a professional shortage area in California.
- University of Virginia School of Law Loan Forgiveness: Provides benefits that will cover 100% of your law school loans if you graduated from the University of Virginia and go on to make less than $55,000 per year.
These LRAPs could help you pay off a hefty portion of your student loans, and many only ask for two to three years of service. Even if you don’t want to stay in your role long term, this award of loan assistance could be worth spending a little while in a qualifying job.
3. Teacher Loan Forgiveness
Amount of time for loan forgiveness: Five years
Next up is the Teacher Loan Forgiveness program, which forgives up to a certain amount of your loans if you work for five consecutive years in a qualifying school.
Most elementary school teachers receive up to $5,000 in loan forgiveness at the end of their five years. But high school teachers who work in math, science or special education could get up to $17,500 in loan forgiveness.
Although you don’t have to spend your entire career in a low-income school or educational agency for this program, five years is still a significant amount of time. Think about your career and financial goals so you can decide whether this program is the right choice for you.
4. Public Service Loan Forgiveness (PSLF)
Amount of time for loan forgiveness: 10 years
Perhaps the best-known student loan forgiveness program, PSLF forgives your federal student loans after 120 qualifying payments, which typically span 10 years. You can get PSLF if you work in an eligible organization, such as a nonprofit or government agency.
It usually doesn’t matter what your specific job is, as long as your workplace qualifies. So while PSLF offers more flexibility in terms of what job you do, it does entail a fairly large time commitment.
If you’re already drawn to public service, spending a decade at a nonprofit probably won’t feel like a sacrifice. But if you’d prefer to move into the private sector (perhaps with a company that offers a student loan-matching benefit), you’ll have to weigh your options.
After all, you could potentially make a higher income in another job, which could be more valuable than the loan forgiveness you’d get from PSLF. Plus, finding a job that’s fulfilling and makes you happy over the long run is an important consideration, too.
Outside of making the best personal decision, it’s also worth noting that PSLF isn’t guaranteed to be around forever. It’s also notoriously difficult to qualify, so make sure your job is 100% eligible before putting all your eggs in the PSLF basket.
5. Forgiveness from income-driven repayment plans
Amount of time for loan forgiveness: 20 or 25 years
A final option is getting forgiveness from income-driven repayment plans, but you’ll have to be seriously patient. Income-driven plans, such as Income-Based Repayment and Pay As You Earn, require 20 or 25 years of student loan repayment before canceling your remaining balance.
On the plus side, your monthly payments shouldn’t be burdensome, as they’ll be adjusted in accordance with your discretionary income. But you will pay more in interest over the long run since you’ll be stretching repayment out over two decades or more.
This approach could be the right choice if you need a lower monthly payment and don’t see your income rising significantly in the future. But while income-driven repayment plans offer some light at the end of the tunnel, you won’t be seeing loan forgiveness from them very quickly.
How long would you wait for loan forgiveness?
Although loan forgiveness programs can be a huge help, most won’t cancel your student loan debt overnight, and some take a lot longer than others. So before dedicating years to a loan forgiveness program, make sure you’re not sacrificing too much in other areas.
For instance, you might not want to dedicate 10 years of your career to working in public service if PSLF is your only reason for doing so. And income-driven repayment plans might not be worth the loan forgiveness in the end if you want to get out of debt sooner and spend less on interest — in that case, you might be better off refinancing your loans instead.
Make sure to weigh the pros and cons of any loan forgiveness program before committing to it. That way, you can make smart decisions with your student loans while still staying on track toward your other professional and personal goals.
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