Getting your student loan removed from your life sounds too good to be true. Well, it’s possible. Student loan borrowers are allowed a forgiveness. However, qualifying for a student loan forgiveness is not that simple. There are lots of factors to consider before you can get a student loan forgiveness such as the type of loan you have, what your profession is, where you live, and your federal loan repayment plan.

The topic of getting your student loan wiped out is interesting, isn’t it? There might be a lot of questions running on your mind; What is this student loan forgiveness, what is the forgiveness act, who are eligible for this forgiveness, etc. We are going to answer all of those. We will tell you everything you need to know about student loan forgiveness.

What loan do you have?

Talking about Student Loan Forgiveness, the first thing you need to figure out is the source of your loan. People are often unsure about the source of their loans. I can be a federal loan, private loan or a combination of both.

An easy way to figure out what loan you have is by going to the National Student Loan Data System and obtaining a list of all the federal student loans you can have. If you cannot find your loan listed there, then most likely, yours is a private loan and not federal.

Does your credit report matter?

Yes, after searching for your loan in the National Student Loan Data System, you will need to get a credit report. A credit report will allow you to find out any private loans you may hold.

Does your current employment make a difference?

By now, you have probably already understood that there are two main approaches to student loan forgiveness depending on whether you are working in a public sector or a private sector.

Sadly, as a private sector worker, the path to achieving student loan forgiveness is extremely difficult and longer. It will require you to make at least 20 years of on-time payments through an income-driven repayment plan.

Thus, if you are working in a private sector and is looking forward to getting a student loan forgiveness, then you will need to start with an income-driven repayment plan.

How to know whether you’re eligible or not?

You must fit into certain categories to be eligible for student loan forgiveness. As per the United States Department of Education, there are 10 such categories that can get you a student loan forgiveness:

1. Teacher Loan Forgiveness: – You can be eligible for Student loan forgiveness of about 17,500 USD if you are teaching in a low-income school for 5 years or more.

2. Closed School Discharge: – In case the school you attend closes due to some reasons, then you are entitled to a full forgiveness. To reiterate, it only works if you haven’t earned your degree yet.

3. Perkins Loan Forgiveness: – You can get additional benefits if you have taken a Perkins loan. For each year you spend in one of the eligible careers, you can get a specific amount of the loan forgiven. Eligible careers are; teaching, United States armed forces, nurses, child workers, law enforcement, and other related professions.

4. Public Service Loan Forgiveness: – If you work as a full-time employee on any government or non-profit organization along with volunteer work, you can get a forgiveness. Although, forgiveness only counts after you have made at least 120 payments on the federal loan.

5. Forgiveness due to Death: – All your federal loans will be forgiven if you pass away.

6. Discharge due to bankruptcy: – If you somehow prove that you cannot pay loans due to bankruptcy, you can be eligible for a student loan forgiveness.

7. Disability Discharge: – If you can prove that you are permanently disabled, then you are eligible for a student loan forgiveness.

8. Borrower defense discharge: – In case the school you attended, violated any state laws or misled you, you are entitled to a forgiveness.

9. Unauthorized Payment Discharge: – In case your school has falsely described the benefits of its degree, your loans are forgiven.

10. Unpaid Refund Discharge: – If for some reason you leave the school before completing the studies and you did not get a refund of the outstanding tuition fees, then it will be credited to your account. Not your entire loan but the outstanding tuition fees can be forgiven.


Should you get a Lawyer?

Sadly, according to most experts, an attorney cannot help you out too much with the process of federal student loan forgiveness.

The best they can do is help you by explaining to you the process, they cannot do any kind of negotiation with the federal government for you.

Will you be charged taxes for the loan forgiveness?

If you are able to get your student loan successfully forgiven, then you will be charged for taxes. Your debts elimination is simply considered as your tax income, which means you will owe more taxes to the government.

For example, if you have a monthly income of 30,000 USD, and you got a student loan forgiveness of 35,000 USD, then you will be paying an income tax on 65,000 USD (30k+35k) rather than on the usual 30,000 USD. If you do not realize this, you will be in debt with the IRS.

However, for those of you who are public employees, the student loan forgiveness will not be considered as an income by IRS. Hence, it will not be taxed.


We hope that after reading this article, you have understood what student loan forgiveness is, how student loan forgiveness works, and how to be eligible for it.

If you are working in a private sector and still wants to continue the road to get a student loan forgiveness, then it is recommended to hire a tax professional who can conduct a financial analysis and figure out the amount of tax you will need to pay.