Your eligibility for student loan forgiveness depends on the type of student loan in question. If you have a federal loan, you may be able to get all or part of your loan forgiven through certain types of volunteer work, public service, military service or medical practice. Covered loans differ depending on the organization; use the text below as a basic guideline and consult the group for details.
By volunteering through AmeriCorps VISTA, AmeriCorps NCCC or AmeriCorps State and National programs, you can receive up to $5,775 toward repaying qualified student loans (loans backed by the federal government) through the Segal AmeriCorps Education Award.
Another option for student forgiveness is the Army National Guard's Student Loan Repayment Program, which can help you earn up to $50,000 toward loans. Covered loans include Federal Direct Loans, Perkins Loans and Stafford Loans.
Working in a public interest or nonprofit position may earn you Federal Direct Loan forgiveness. Loans from other federal programs don't qualify unless they are reorganized into a Direct Consolidation loan. Click here for more about the Public Service Loan Forgiveness Program.
By volunteering with the Peace Corps, 15% of your Perkins Loan balance will be forgiven for each year of service.
As a full-time elementary or secondary school teacher in a low-income community, you can have 15% of your Perkins Loan forgiven for years one and two of employment, 20% in years three and four, and the remaining 30% in year five. Federal Direct Subsidized and Unsubsidized Loans – and Subsidized and Unsubsidized Federal Stafford Loans – may also be forgiven if you teach an understaffed subject such as math, science, or special education or work in a school in a low-income neighborhood. Click here for the latest details on these programs.
For medical school graduates and nurses, working in underserved areas can qualify you for student loan forgiveness under state programs.
Student loans are also forgiven upon death.
If you work for a federal agency, your employer may repay up to $10,000 of your loans per year, with a maximum of $60,000, through the Federal Student Loan Repayment Program. Also, by working full-time for 10 years in certain public service jobs and making at least 120 loan payments on your own, your remaining student loan debt may be forgiven. Potentially-eligible positions include those in nursing, government, police, fire, social work and nonprofit organizations.
Many programs that offer student loan forgiveness offer lower pay than what you could earn in a regular job. You might be able to repay your loans more quickly through a job with greater earning potential, even if it doesn't offer loan forgiveness. Regardless of your employer or profession, however, there are also income-based programs that will forgive your remaining loan balance once you've made payments for 25 years. For more on this, see Debt Forgiveness: How to Get Out of Paying Your Student Loans.
If you do have all or part of your student loans forgiven, be aware that the IRS may consider the forgiven debt as income and you may have to pay tax on that amount. Also, if you choose to participate in any loan forgiveness program, make sure to obtain written verification before you begin of what amount will be forgiven and under what circumstances.