If you’re one of the 45 million borrowers dealing with an average student loan total of $29,900, you may be wondering what student loan forgiveness options are available. And that makes sense. After all, that’s a big financial ball-and-chain to begin your career with.
And if you work in a profession that requires a graduate degree, you probably graduated with even more student debt. Check out some of these startling numbers:
- Medical school debt – $196,520 on average
- Dental school debt – $285,154 on average
- Pharmacy school debt – $166,528 on average
- Veterinary school debt – $143,757 on average
- Physical therapy school debt – $70,000 on average
If you’re dealing with that kind of crushing student loan debt, student loan forgiveness options become even more important. The good news is that there are many student loan forgiveness programs available today.
Whether you’re dealing with $20,000 of student debt or $200,000, there are ways to relieve your student loan burden. In this ultimate guide, we’ll cover all the best student loan forgiveness and repayment options.
Federal Student Loan Forgiveness Programs
Here are the top federal student loan forgiveness programs that are available today.
Income-Driven Repayment (IDR) Plan Forgiveness
If you have federal student loans, you’re eligible to apply for an Income-Driven Repayment (IDR) plan. There are four IDR plans available today:
- Revised Pay As You Earn (REPAYE)
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR).
One of the nice things about IDR is that your monthly payment will scale up or down with your income. Depending on the plan that you choose, your payment will either be 10% or 20% of your discretionary income.
With IDR, you’ll be eligible for student loan forgiveness on your remaining balance after 20 to 25 years. If you owe a large amount of student loan in relation to your annual income, an IDR plan could be one of your best options. However, keep in mind that you will owe income tax on whatever amount is forgiven.
So if you receive a lot of student loan forgiveness, that could generate a large tax bill. If you plan to pursue Income-Driven Repayment forgiveness, you’ll want to put a little bit of money aside each year to pay for the tax that you’ll owe.
Public Service Loan Forgiveness (PSLF)
If you work for the government or for a 501(c)(3) non-profit organization, you could qualify for the Public Service Loan Forgiveness (PSLF) program.
PSLF is one of the most generous forgiveness programs available today. First, you’ll be eligible for forgiveness in half the time that it takes to earn IDR forgiveness. With PSLF, you can qualify for forgiveness in as little as 10 years. Second, with PSLF, the forgiven amount is tax-free. That’s a huge bonus!
To qualify for PSLF, you’ll need to be on an IDR repayment plan. You’ll also need to fill out the PSLF application and certify that you work for a qualified employer. Then you’ll need to make 120 payments while working for a qualified employer. Your payments do not need to be consecutive. If you leave a non-profit job but then start working in the public sector again later, you can pick up right where you left off.
One of the great things about the PSLF program is that non-profit hospitals and clinics are qualifying employers. This is great news for medical professionals who graduate with loads of debt. If you’re a doctor, nurse, physical therapist, or even pharmacist, PSLF could be one of your best student loan forgiveness options.
Teacher Loan Forgiveness
If you’re a teacher, the Teacher Loan Forgiveness program could help you get rid of some of your student loans. With the Teacher Loan Forgiveness program, you could receive up to $17,500 of student loan forgiveness. But in order to qualify for forgiveness, you’ll need to spend 5 consecutive years teaching full-time at a low-income school or educational service agency.
One downside to the Teacher Loan Forgiveness program is that it cannot be combined with PSLF. In other words, your first five years of teaching can’t count towards Teacher Loan Forgiveness and PSLF. If you decide to pursue PSLF after Teacher Loan Forgiveness, you’ll need to work another 10 years before you can receive forgiveness.
For this reason, I would only recommend pursuing Teacher Loan Forgiveness if you have $17,500 of student debt or less. If you have more than yet, you’d probably be better off going with PSLF.
Profession-Specific Student Loan Forgiveness Programs
There are many student forgiveness programs that are only offered to borrowers who work in specific professions. If you work in one of the following areas, you could be eligible for one of the following programs.
Medical Student Loan Forgiveness
If you’re a healthcare professional, there are many student loan forgiveness programs that you may qualify for. Here are a few worth looking in to.
The NHSC Loan Repayment Program
With the National Health Service Corps Loan Repayment Program, you could be eligible for $30,000 to $50,000 of student loan forgiveness. In order to qualify for the program, you’ll need to agree to work at least two years at an NHSC-approved site. A large variety of primary care, dental health, or behavioral and mental health disciplines qualify for the program.
Nurse Corps Loan Repayment Program
With the Nurse Corps Loan Repayment Program, nurses can receive repayment assistance for up to 60% of your student loans in exchange for serving at least two years in Critical Shortage Facility.
After you’ve finished your two-year commitment, you may be eligible for a third year of service and an additional 25% of student loan forgiveness.
National Institutes of Health (NIH) Loan Repayment Programs
There are eight different NIH Loan Repayment Programs for medical professionals. With these programs, you could qualify for up to 35,000 per year of student loan repayment. There are extramural programs designed for clinical researchers as well as intramural programs for NIH employees.
No matter which NIH loan repayment program you pursue, your student loans will need to be at least 20% of your base salary. And you must do at least 20 hours of research a week for NIH during any quarter that you receive assistance.
Lawyer Student Loan Forgiveness
Like medical professionals, lawyers are known for graduating with lots of student debt. But there are a few programs that could provide lawyer student loan forgiveness.
Department of Justice Attorney Student Loan Repayment Program (ALSRP)
With the Department of Justice Attorney Student Loan Repayment Program, you could receive up to $6,000 per year of student loan repayment assistance, up to a $60,000 max. This could be a great option if you want to work for the Department of Justice. But be aware that the program has been known to be highly competitive.
To qualify, you’ll need to have at least $10,000 in student loans. You’ll also need to agree to a three-year service commitment.
John R. Justice Student Loan Repayment Program
If you’re interested in working as a public defender, the John R. Justice Student Loan Repayment Program could help with your student loans. With this program, you’ll be eligible for up to $10,000 of student loan assistance each, with a maximum repayment of $60,000. And, once again, you’ll need to make at least a three-year service commitment.
State LRAP Programs
According to the American Bar Association, there are 24 statewide lawyer student loan repayment programs. Here are the following states that offer student loan forgiveness programs for lawyers.
- District of Columbia
- Florida
- Illinois
- Indiana
- Louisiana
- Maine
- Maryland
- Massachusetts
- Minnesota
- Mississippi
- Montana
- New Hampshire
- Nebraska
- New Mexico
- New York
- North Carolina
- Ohio
- Oregon
- Pennsylvania
- Texas
- Vermont
- Virginia.
If you live in one of these states, you’ll want to check out the details of your state’s program to see exactly what it has to offer.
Veterinarian Student Loan Forgiveness
As mentioned earlier, veterinarians are known for graduating with massive amounts of student debt. But the Veterinary Medicine Loan Repayment Program (VMLRP) could help you repay those loans. With this program, you can receive up to $25,000 in student loan repayment for up to three years. In exchange, you’ll need to agree to work in a shortage area during that time.
Veterinarians should also check to see if there are any state-level student loan forgiveness programs available to them. The American Veterinary Medical Foundation has a list of nearly 20 states that have programs.
Keep in mind that if you work for the USDA as a food inspector, you could qualify for PSLF as well. And if you work for the Army as a veterinarian, you could receive up to $120,000 of student loan assistance. Speaking of the Army, there are several military student loan forgiveness programs. Let’s take a look at those programs now.
Military Student Loan Forgiveness Programs
Here are the three main military student loan forgiveness programs available today. These programs are in addition to PSLF which you can qualify for while you’re serving in the military.
College Loan Repayment Program (CLRP)
Congress allows each branch of the military to offer student loan repayment assistance as a recruiting incentive through the College Loan Repayment Program (CLRP). The program caps repayment at $65,000, but each branch is free to choose exactly how much repayment assistance to offer (or to take advantage of the program at all).
Currently, the Army, Navy, and National Guard all offer student loan repayment via the CLRP program.
Health Professions Loan Repayment Program (HPLRP)
With the Health Professions Loan Repayment Program, military members can receive up to $120,000 of student loan forgiveness. The following medical disciplines qualify for the program:
- Physicians
- Dentists
- Nurse-midwives
- Nurse practitioners
- Physician assistants
- Mental health providers
- Veterinarians
Additionally, you’ll need to serve in a critical need area. Currently, the Army and the Navy both offer student loan repayment through the HPLRP program.
National Defense Student Loan Discharge
National Defense Student Loan Discharge is intended for members of our armed forces who served at least one full year in an area of hostile fire or imminent danger.
The National Defense Student Loan Discharge is only available to borrowers who have National Defense Student Loans or Perkins loans. This can make it more difficult to qualify for. And, unfortunately, the program does not specify how much student loan forgiveness you can receive. But, if you think you qualify, you can send a copy of your DD 214 discharge form to apply.
Conclusion:
Don’t let student debt overwhelm you. No matter how much student debt you have or what you do for a living, there’s probably a student loan forgiveness program that could help you pay off your student loans. For more ideas on how to ditch your student debt, check out my guide to paying off student loans.