4 student loan forgiveness options

March 7, 2018

Loan forgiveness happens when all or some portion of your federal student loan balance is canceled, which means you’re no longer expected to repay your loan.

While not common, there are three federal student loan forgiveness and cancellation programs for people with specific jobs or life circumstances.*

1. Public service loan forgiveness

If you’re a government or nonprofit employee, you may qualify for this specialized loan forgiveness program.

  • What it is: A cancellation of your remaining federal student loan balance, after you’ve made at least 120 qualifying monthly payments (on time and in full).
  • Who’s eligible: Full-time government or nonprofit employees who have been employed for at least 10 years and have made 120 qualifying monthly payments on direct subsidized, unsubsidized, and PLUS federal loans. You may also need to be in an income-driven repayment program.
  • How to apply: You will need to complete the Employment Certification for Public Service Loan Forgiveness form–perhaps multiple times until you qualify. Learn more about the application process at

2. Teacher loan forgiveness

This program was developed as an incentive for college students to enter the teaching profession.

3. Perkins loan cancellation and discharge

If you have a federal Perkins loan and work in a public service job, you may be able to take advantage of this program.

  • What it is: For each complete year of service, a percentage of your loan may be canceled.
  • Who’s eligible: You may be eligible if you’ve served as a:
    • Volunteer in the Peace Corps or ACTION program (including VISTA)
    • Teacher (see the Teacher Loan Forgiveness program above)
    • Member of the U.S. armed forces (serving in area of hostilities)
    • Nurse or medical technician
    • Law enforcement or corrections officer
    • Head Start worker
    • Child or family services worker
    • Professional provider of early intervention services
  • How to apply: There is no standard application for a Perkins Loan Cancellation; you’ll need to contact your school’s financial aid office to apply. In the meantime, find out if you qualify at

4. Income-driven repayment (IDR) plans

Whether or not loan forgiveness programs apply to your situation, you should consider an income-based repayment plan. These plans could help make your student loan debt more manageable.

Explore and understand all your options for loan forgiveness and repayment plans to find a smart solution.

Capella University’s Financial Aid counselors can help guide you through yourfederal financial aid options and application process.

*Loan forgiveness programs are run by the federal government and are subject to change or be discontinued at any time.

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