After 20 years of payments, if you’re in an income-driven repayment plan, your federal student loans might be forgiven.
Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances.
It can be disheartening to realize how much debt you still have after months or even years of making monthly payments toward your student loans. Depending on your repayment plan, you may even owe more now than you did when you first graduated.
The good news is that student loan payments don’t have to go on forever. After 20 years, if you have federal student loans and are paying them back through an income-driven repayment (IDR) plan, your loans might be forgiven. That can provide you with hope and a concrete objective to strive for while you keep up with your payments.
The burden of student loan debt can feel overwhelming, but there are options for relief including forgiveness programs. This guide will help you understand your options, including Public Service Loan Forgiveness (PSLF) Income-Driven Repayment (IDR) forgiveness, and the recent one-time adjustment, so you can determine if you qualify and how to apply.
Public Service Loan Forgiveness (PSLF): A Helping Hand for Public Servants
You might be eligible for PSLF if you work for a qualifying public service employer, such as a government agency, nonprofit, or educational establishment. With 120 qualifying payments (10 years) of on-time payments made while working for a qualifying employer, this program forgives the remaining amount owed on your Direct Loans.
Eligibility Requirements for PSLF:
- Employment: You must be employed full-time by a qualifying public service employer.
- Loan type: Only Direct Loans qualify for PSLF. If you have other federal loans, you can consolidate them into a Direct Consolidation Loan.
- Repayment plan: You must be enrolled in an income-driven repayment plan.
- Payments: You must make 120 qualifying payments on time.
Tips for Achieving PSLF:
- Use the PSLF Help Tool: This free tool provided by the Department of Education (ED) helps you determine your eligibility and track your progress towards forgiveness.
- Submit the PSLF Employment Certification Form: This form verifies your qualifying employment and helps you receive credit for your payments.
- Keep Proof of Payments: Save your receipts or monthly statements as documentation.
- Monitor Your Payment Tally: Check the PSLF Help Tool regularly to ensure it matches your records.
- Understand the CARES Act Payment Pause: Paused payments during the pandemic count towards PSLF if you meet other qualifications.
- Request Credit for Deferments and Forbearances: Certain deferments and forbearances may count towards forgiveness.
- Stay Informed About IDR Plan Changes: New changes to IDR plans can affect your PSLF loan payment count.
- Set Yearly Reminders: Remember to recertify your income-driven repayment plan and employer each year.
- Appeal if Denied: You have the right to appeal a PSLF denial.
Income-Driven Repayment (IDR) Forgiveness: Relief for Low-Income Borrowers
Most federal student loans are eligible for at least one IDR plan. These plans cap your monthly payments based on your income and family size, potentially reducing your payments to as low as $0 per month. Depending on the IDR plan, the remaining balance on your loans may be forgiven after 20 or 25 years of repayment.
One-Time Adjustment to Fix IDR Loan Forgiveness:
The ED made announcements in April 2022 that would move borrowers closer to forgiveness under IDR plans. This includes a one-time modification to shorten the repayment term for some borrowers by counting specific time periods toward loan forgiveness.
What Counts Towards the 20 or 25 Years Required for IDR Forgiveness?
- Any months with time in repayment status, regardless of payments made, loan type, or repayment plan.
- 12+ months of consecutive forbearance or 36+ months of cumulative forbearance.
- Months spent in economic hardship or military deferments after 2013.
- Months in deferment prior to 2013 (except in-school deferment).
- Any time in repayment prior to consolidation on consolidated loans.
What Loans Qualify for the IDR One-Time Adjustment?
- Only federal student loans managed by ED qualify.
- Borrowers with Direct Loans or federally-managed FFELP loans will automatically benefit.
- Borrowers with FFELP loans held by commercial lenders or Perkins loans not held by ED can benefit by consolidating into Direct Loans by April 30, 2024.
How to Enroll in an Income-Driven Repayment Plan:
You can enroll in an IDR plan online through the ED’s website. The website for enrolling in the online IDR plan will inform you of the loans you have and walk you through the procedure.
Remember:
- You never have to pay for help with your federal student aid.
- Be wary of scams promising loan forgiveness for a fee.
- Always work with ED and your loan servicers.
- Never reveal your personal information or account password to anyone.
Additional Resources:
- Department of Education: https://studentaid.gov/
- PSLF Help Tool: https://studentaid.gov/manage-loans/forgiveness-cancellation/pslf
- Income-Driven Repayment Plans: https://studentaid.gov/manage-loans/repayment/plans
- One-Time IDR Adjustment: https://studentaid.gov/announcements-events/idr-account-adjustment
By understanding your options and taking action, you can navigate the maze of student loan forgiveness and potentially achieve debt relief.
How to apply for student loan forgiveness programs
Applying for student loan forgiveness programs happens through your loan servicer, the company that handles your payments. Contact your loan servicer if you’re interested in learning how to qualify.
Making sure you’re enrolled in an income-driven repayment plan that you qualify for should be your first step. This doesn’t happen automatically, and unless you choose otherwise, you’ll be automatically enrolled in the Standard Repayment plan. You can switch your repayment plan at any point, for free.
To ensure that your income-based repayments are set at the appropriate amount over the course of your 20 years or more of payments, you must recertify your income level and family size each year. When it’s time to recertify, your loan servicer will contact you, so be sure to keep your contact details current.
Tip: To find your loan servicer, log in to your account at StudentAid. gov. You can also call the Federal Student Aid Information Center at 1-800-433-3243.
If you’re applying for Public Service Loan Forgiveness, the process is a little different. You’ll need to fill out a special application for this program, which is available on the StudentAid.gov website. It’s also a good idea to certify that your past or present employer meets the requirements for PSLF, which can be done on the same site.
Student loan forgiveness by loan type
In general, you must have a Direct Loan to qualify for loan forgiveness after 20 years. These loans are issued directly by the U. S. Department of Education. The specific type of Direct Loan, though, can affect how the process works.
- Undergraduate students with financial need can apply for direct-subsidized loans, which have the important benefit of having the government pay interest while the borrower is enrolled in classes and during other periods when repayment is not made. These loans can be forgiven after 20 years of payments, and any of the four repayment plans mentioned above are applicable.
- Direct Unsubsidized Loans: These are available to graduate, professional, and undergraduate students without the need for proof of financial need. Interest charges are your responsibility as soon as the loan funds are transferred to your school. Additionally, you can choose from any of the four repayment plans for these loans, and after 20 years, your debt may be forgiven. But under the SAVE plan, that period is extended to 25 years if you have any student loans from graduate school.
- Direct PLUS Loans are available to parents of undergraduate students as well as graduate or professional students. You may be eligible for any of the four repayment plans if you are a student borrower with these loans. If you’re on the SAVE plan, you’ll have to pay for these for 25 years because they’re for graduate school. However, you cannot be eligible for loan forgiveness if you are a parent unless you consolidate your debt.
- With a single servicer, you can consolidate various federal debt categories into a single loan through the use of direct consolidation loans. You can use any of the four repayment plans and be eligible for forgiveness after 20 years, unless you have parent loans involved. You will only be able to choose the ICR plan, which allows you to have your parent loans forgiven after 25 years, if you do have any.
- Federal Family Education Loans (FFEL Loans): Since 2010, no FFEL loans have been granted. You can use the IBR plan to have your loans forgiven after 25 years if you still owe money on them. In certain circumstances, you might be able to apply for other IDR plans if you consolidate these loans.
- Perkins Loans: Originally designed for low-income students who had “exceptional financial need,” Perkins Loans are no longer offered. These loans must be consolidated before they can be enrolled in any of the four IDR plans.
Read More: How To Get Parent Student Loan Forgiveness
Do Student Loans Disappear After 20 Years?
FAQ
Do student loans get Cancelled after 20 years?
How long before student loans are written off?
Are private student loans forgiven after 20 years?
Are student loans forgiven after a certain age?
Can a student loan be forgiven after a year?
Borrowers must have taken out no more than $12,000 in student loans to qualify. For every $1,000 borrowed above the $12,000 limit, borrowers can receive forgiveness after an extra year of repayment. So, if you took out $14,000 in loans, for example, you’d see forgiveness in two years.
Can a borrower get a college loan forgiveness?
For a borrower to be eligible for this forgiveness they must be enrolled in the SAVE Plan, have been making at least 10 years of payments, and have originally taken out $12,000 or less for college. For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments.
How long can a borrower get a loan forgiveness?
For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments. All borrowers on SAVE receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school.
Who is eligible for student loan forgiveness?
Borrowers who started repaying their undergraduate loans at least 20 years ago and graduate borrowers with more than 25 years of repayment history may be eligible for forgiveness, even if they aren’t on an income-driven repayment, or IDR, plan. You attended a “low-financial-value program.”