Student loan forgiveness

Are you a student? Looking for a way to get relief from your student loan obligation? Then congratulations! You are at the right article. Today, I am going to explain you a program that can relieve you from the stress of federal loan debt. Sounds interesting. Isn’t it? So keep reading to learn in detail.

What is student loan forgiveness?

Student loan forgiveness is kind of a program that has a power to get you free from the responsibility to pay back a portion or all of your federal student loan debt. You may have borrowed this amount to finance your higher education.

Certain types of loans are eligible for forgiveness, but you can only qualify in a situation if you are in specific public service, educational, or military occupations.

General Background for how student loan forgiveness Works

As I have explained you earlier, Loan forgiveness is a program that evolves the process of eliminating or forgiving a debt. It can relieve you from the obligation of repaying it.

Note: this forgiveness program is only for US residents.

In addition to this, It is important to keep in mind that privately issued loans are strictly not eligible for forgiveness. Such loans include loans from commercial banks or lenders like Sallie Mae even if you took them for educational purpose.

For borrowers with eligible loans, there is a possibility of loan forgiveness. However, as is the case with any other program, it is must for individuals seeking loan forgiveness to submit an application and there are chances that they will be required to continue making loan payments until their application is approved.


In addition to the requirements that I have already explained, I will like to clear that not every loan is eligible for this program. If you want to qualify, then check whether you fulfil the following criteria or not:

⦁ The student loan that you want to be forgiven must be from the federal government plus you must have an annual income below $125,000.

Well! I have one good news for you. If you meet the above mentioned criteria you may also become eligible for debt cancellation. But this cancellation will only be up to $10,000 of your debt. But I have one more good news, having a Pell Grant may qualify you for up to $20,000 in forgiveness.

Types of students loans eligible for forgiveness

If I explain in simple ways then all types of federal student loans are eligible for forgiveness. These may include direct subsidized or unsubsidized loans and graduate or parent PLUS loans. If your loans were eligible for the federal student loan payment pause, they qualify for this forgiveness opportunity as well.

However, most Federal Family Education loans (FFEL) and Perkins loans that are not held by the federal government do not qualify for forgiveness. Borrowers in this category may be eligible if they applied for a direct consolidation loan prior to September 29, 2022, but all other borrowers with FFEL and Perkins loans are currently not eligible for forgiveness.

It’s important to note that private student loans are also not eligible for forgiveness.

Are there any Disadvantages?

The terms of student loan forgiveness can be altered when the political climate changes. Therefore, Mark Kantrowitz, the publisher and vice president of research at SavingForCollege, warns borrowers not to rely solely on the expectation of debt forgiveness for their financial future, particularly when it is connected to public service.
  • Minimum Work Requirement of 10 years
A 10-year minimum work requirement is in place for public service loan forgiveness. It means that you will receive the benefit only after completing 10 years or full time service. According to Kantrowitz, if in any circumstances you stop working before reaching this 10-year threshold then you must forget about this loan forgiveness.

On the other hand, it is worthwhile that I mention here that the income-based repayment plans may have a drawback. Since the repayment period is extended, more interest will accumulate on the loan over time.
  • Payments become larger with income growth
In addition to accumulation of interest, one more thing bad thing is that As your income grows, loan payments may also increase which are under income-based repayment (IBR) and Pay As You Earn (PAYE). This can lead to negative amortization, causing you to accumulate more debt, warns Kantrowitz. To avoid this, if you are anticipating a significant income increase in the future you may consider alternative repayment plans such as extended repayment or graduated repayment. These plans ensure that the monthly payment covers the accruing interest and prevents the loan balance from increasing.

It is important to remember that payments under IBR and PAYE are adjusted annually based on income. So, when income rises, the payment amount can also increase, advises Gobel. Even if monthly payments are reduced, it is advisable not to spend the extra money irresponsibly.

If you are accumulating more debt based on the assumption of future forgiveness plans, it is wise to reconsider. As it may happen that in future the regulations may change and then these plans may no longer be available. It is also important to assess whether you would be able to afford repayment under a regular Extended Repayment Plan. If you will not be able to afford then I will recommend you to avoid accumulating excessive debt that could lead to a challenging financial situation.


Forgiveness plans may have drawbacks to consider. The occupations that make you eligible for student loan forgiveness typically have lower salaries compared to private-sector jobs. It is worth considering that you might be able to repay your loans faster by pursuing a higher-paying job, even if it doesn’t qualify for loan forgiveness. So, decide wisely.

Visit StudentAid.gov/debtrelief to learn more about the actions President Biden announced following the decision and find out how this decision impacts you

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