The current state of federal student loan forgiveness

Federal student loan forgiveness is not happening automatically for most borrowers right now. The broad forgiveness program announced in 2022 was blocked by courts and did not take effect. However, the Department of Education continues to run smaller forgiveness programs that target specific groups of borrowers — people in certain professions, those who attended schools that closed, and borrowers who are permanently disabled.

The most visible change for many borrowers is that federal student loan payments restarted in October 2023 after a pause that lasted since March 2020. If you have federal loans, your monthly payment obligation is active unless you are enrolled in an income-driven repayment plan or are covered by one of the targeted forgiveness programs.

Forgiveness programs that do exist require you to meet specific conditions. You cannot receive forgiveness straightforward by holding a federal student loan. The programs are designed for borrowers in particular situations, and each has its own rules about who qualifies and what paperwork you need to submit.

Key Takeaways

  • Broad forgiveness that would have canceled debt for millions of borrowers was blocked and did not take effect, so most federal loan holders still owe their full balance.
  • Targeted forgiveness programs exist for public service workers, borrowers whose schools closed, permanently disabled borrowers, and a few other groups, but each requires you to meet specific conditions.
  • Federal loan payments resumed in October 2023 after a three-year pause, so if you have not made a payment since early 2020, you now owe monthly payments unless you are in a specific program.
  • Income-driven repayment plans can lower your monthly payment to as little as $0 per month based on your income, and after 20 to 25 years of payments, any remaining balance is forgiven.

Public Service Loan Forgiveness and who it covers

Public Service Loan Forgiveness (PSLF) forgives the remaining balance on federal Direct Loans after you make 120 may have access to payments while working full-time for a government agency or a nonprofit organization. The Department of Education runs this program, and it has been in place since 2007, though it was rarely used until 2021.

To may have access to, you must work for a federal, state, or local government employer, or for a nonprofit organization that holds 501(c)(3) status. Your employer must be your primary job — you cannot count part-time work or side jobs. You must also be enrolled in an income-driven repayment plan, which means your monthly payment is based on your income rather than a standard 10-year schedule.

The 120 payments do not have to be consecutive, and they do not have to be large. If your income is very low, your payment under an income-driven plan might be $0 per month, and that still counts as a may have access to payment. After you reach 120 may have access to payments, you submit a request to the Department of Education, and any remaining balance is forgiven without tax consequences.

You can check your payment count by logging into your loan servicer's website or by contacting the Federal Student Aid office. Many borrowers have received forgiveness through this program in recent years after the Department of Education clarified which payments count and made it easier to request forgiveness.

Forgiveness for borrowers whose schools closed

If your school closed while you were enrolled or shortly after you left, you may be covered by Closed School Discharge. This program forgives federal loans taken to attend a school that shut down. The Department of Education maintains a list of closed schools, and if your school is on it, you can request that your loans be discharged.

You do not need to prove that the closure harmed you or that you did not finish your degree. The program is based on the fact that the school closed, not on your individual circumstances. However, you do need to show that you attended the school during the period it was operating or shortly before it closed.

If your school closed and you have already repaid some or all of your loans, you may be may have access to to a refund of the payments you made. The Department of Education has been processing these refunds for borrowers whose schools closed in recent years, and the process can take several months.

Forgiveness for permanently disabled borrowers

Total and Permanent Disability Discharge forgives federal student loans for borrowers who are unable to work because of a medical condition. You must have a disability that is expected to last for your lifetime or result in death. The Social Security Administration or the Department of Veterans Affairs can certify your disability, or you can provide medical documentation from a physician.

If you are approved for disability discharge, your loans are forgiven without tax consequences. However, the Department of Education will monitor your income for three years after discharge. If your income rises above a certain threshold during that period, you may be required to resume payments.

You can request disability discharge through your loan servicer or directly through the Department of Education's website. The process typically takes several months, and you will receive written notice of approval or denial.

Income-driven repayment and forgiveness after 20 to 25 years

Even if you do not may have access to for any targeted forgiveness program, you can enroll in an income-driven repayment plan, which can significantly lower your monthly payment and eventually lead to forgiveness. There are four income-driven plans: Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR).

Under these plans, your monthly payment is calculated as a percentage of your discretionary income — typically 10 to 20 percent, depending on which plan you choose. If your income is very low or you have no income, your payment can be $0 per month. After you make payments for 20 to 25 years (depending on the plan), any remaining balance is forgiven.

When your balance is forgiven under an income-driven plan, the forgiven amount may be treated as taxable income in that year, which means you could owe federal income tax on the forgiven amount. This is different from PSLF and disability discharge, which do not create a tax bill. You should consult a tax professional to understand the tax consequences before enrolling in an income-driven plan.

You can enroll in an income-driven plan through your loan servicer's website or by contacting Federal Student Aid. You will need to provide recent income information, and you should recertify your income each year to make sure your payment stays accurate.

Borrower Defense to Repayment and school-related forgiveness

Borrower Defense to Repayment forgives federal loans for students who attended schools that engaged in fraud or misconduct. This program is separate from Closed School Discharge and applies when a school is still operating but misled students about the school's programs, job placement rates, or other material facts.

To request Borrower Defense forgiveness, you must submit a written claim to the Department of Education explaining how the school defrauded or misled you. The Department of Education investigates the claim and decides whether to grant forgiveness. This process can take a long time — some claims have been pending for years.

If your claim is approved, your loans are forgiven without tax consequences. If you have already repaid loans related to your attendance at the school, you may receive a refund. The Department of Education has been processing a backlog of Borrower Defense claims in recent years, and the timeline for decisions varies.

What to do if you want to understand your forgiveness options

Start by logging into your account at studentaid.gov, which is the official Department of Education website for federal student loans. You can see your loan balance, your current repayment plan, and your payment history. The site also has a tool that shows which forgiveness programs you might be covered by based on your situation.

If you work for a government agency or nonprofit, check whether your employer is listed as a may have access to employer for PSLF. You can search the Department of Education's employer database on the Federal Student Aid website. If your employer qualifies, contact your loan servicer to enroll in an income-driven repayment plan, which is required for PSLF.

If you believe your school closed, engaged in fraud, or you have a disability, you can submit a request for forgiveness directly through your loan servicer or through the Department of Education's website. Each program has its own form and submission process, and the Department of Education website explains what documents you need to provide.

Frequently Asked Questions

Will there be another broad forgiveness program like the one announced in 2022?

That depends on future policy decisions and legal challenges. The 2022 program was blocked by courts and did not take effect. Any new broad forgiveness program would require action by Congress or a new executive decision, and both would likely face legal challenges. For now, forgiveness is available only through the targeted programs that currently exist.

If I have private student loans, can I get forgiveness?

No. All the forgiveness programs described here explore only to federal student loans. Private loans are issued by banks and other lenders, not by the Department of Education, and they are not covered by any government forgiveness program. Your options with private loans are limited to income-driven repayment plans offered by your lender, if available, or loan consolidation.

Do I have to do anything to stay in the forgiveness programs, or will it happen automatically?

You must take action. For PSLF, you must enroll in an income-driven repayment plan and submit a request for forgiveness after you reach 120 payments. For income-driven forgiveness, you must recertify your income each year to keep your plan active. For disability discharge and Closed School Discharge, you must submit a request. Nothing happens automatically — you need to contact your loan servicer or the Department of Education to start the process.

What happens to my credit if my loans are forgiven?

Forgiveness through PSLF, disability discharge, or Closed School Discharge does not harm your credit. However, if you have missed payments before receiving forgiveness, those missed payments may remain on your credit report. If you are on an income-driven plan and your payment is $0 per month, you are still making on-time payments, so your credit should not be affected.

Can I get a refund of payments I made before my loans were forgiven?

Yes, but only in certain situations. If your school closed and you repaid loans related to that school, you can request a refund. If your Borrower Defense claim is approved, you can request a refund of payments made while you were attending the school. For other forgiveness programs, refunds are not available — you receive forgiveness of the remaining balance only.