Who qualifies for loan forgiveness?

It depends on the program, loan type and your work or payment history. Examples include public service workers, teachers in certain schools and borrowers who make qualifying payments for many years.

Is forgiven loan debt taxable?

It depends on the country, program and the year. Some forgiveness is excluded from taxable income and some is not. Check current rules or ask a tax adviser.

Do I have to apply for forgiveness?

Usually yes. Most programs require documentation and an application, and you must keep making payments until forgiveness is approved.

What Is Loan Forgiveness? Student Debt Relief Explained

Loan forgiveness is a process in which some or all of a borrower's student loan debt is erased, so that they no longer need to repay it. It is not automatic for most borrowers. It is granted under specific programs, laws or settlements, and each has its own eligibility rules. Programs and rules have changed over time and may continue to change, so always check current official information.

Types of forgiveness and discharge

Public service programs: in the US, for example, borrowers who work full-time for qualifying government or nonprofit employers and make a set number of qualifying payments may have remaining federal loans forgiven.
Teacher programs: some borrowers who teach in low-income schools or in high-need subjects for a set period may qualify for partial forgiveness.
Income-driven repayment forgiveness: after paying a percentage of income for a long period, such as 20 to 25 years, any balance may be forgiven under some plans.
Discharge for specific circumstances: such as total and permanent disability, closed schools or fraud by the school.
Professional programs: such as those for health professionals who work in underserved areas.
State and employer programs: repayment assistance for graduates in certain fields or locations.
International schemes: some countries write off remaining student loan balances after a set number of years or when income stays below a threshold.

How it works

You usually must meet requirements, such as working for a qualifying employer, making a minimum number of payments on a qualifying repayment plan, and keeping documentation. You submit forms, and the servicer or agency reviews them. Payments must usually continue until approval.

Taxes

In some jurisdictions, forgiven amounts are treated as taxable income, and in others they are excluded for particular programs or periods. Rules change, so check official guidance.

Cautions

Beware of scams. Companies that charge fees for forgiveness help may be misleading. Official programs can be applied for free.
Understand conditions. Missing paperwork or being on the wrong plan can delay or prevent forgiveness.
Do not stop paying unless your servicer confirms that you are eligible.
Keep records of employment and payments.

Checking eligibility

Look at the official government student aid website and your loan servicer's information. Ask your employer's HR department about public service certification.

Related terms

See loan servicer, interest capitalization, repayment threshold, cosigner and APR.