Both FFELP and Direct Loans can qualify

Both FFELP and Direct Loans can qualify

Teacher Loan Forgiveness

College graduates who teach full-time in a low-income elementary or secondary school (or educational service agency) for five years may qualify for up to $17,500 in loan forgiveness on their subsidized and unsubsidized Federal Stafford Loans.

Eligibility is limited to highly qualified teachers. Highly qualified teachers have at least a Bachelor’s degree, full state certification as a teacher, and certification or licensing on a permanent basis. Elementary school teachers must also have passed a rigorous state test of knowledge and teaching skills in reading, writing and mathematics. Rigorous state tests can include state-required certification or licensing tests.

Math, science and special education teachers are eligible for up to $17,500 in student loan forgiveness. Other teachers may receive up to $5,000 in student loan forgiveness.

Teacher Loan Forgiveness is stackable with the Public Service Loan Forgiveness program. The same period of teaching service, however, cannot qualify for both loan forgiveness programs.

Borrowers who are in default are not eligible unless they have made satisfactory repayment arrangements with the holder of the loan.

To apply for Teacher Loan Forgiveness, submit a Teacher Loan Forgiveness Application to the loan servicer or servicers. The chief administrative officer at the school to educational service agency must complete the certification section of the application form.

Loan Forgiveness for Volunteering

Volunteers with AmeriCorps eriCorps Education Awards which can be used to repay their federal student loans and state student loans. The education awards are worth up to the maximum Federal Pell Grant amount. There is a seven-year limit on using the education awards. Volunteers age 55 and older may transfer their education awards to their children or grandchildren.

Volunteers with the Peace Corps may receive a transition payment (readjustment allowance) of more than $10,000 after completion of two years of service.

Both the education awards and transition payments may be used to repay federal student loans. These lump sum payments count toward up to 12 qualifying monthly payments for Public Service Loan Forgiveness.

However, some borrowers may be better off making payments under an income-driven repayment plan. These payments can be as low as $0 and still count toward Public Service Loan Forgiveness. Volunteering full-time with AmeriCorps or Peace Corps qualifies as full-time employment in an eligible public service job.

Recipients of the Segal AmeriCorps Education Award may apply the award to their student loans through the My AmeriCorps portal. Choose “Create Education Award Payment Request” and then specify “Loan Payment” as the Payment Type.

Borrowers should contact the PSLF loan servicer if they want to apply their education awards or transition payments as a lump sum payment that qualifies for Public Service Loan Forgiveness. Include the date and amount of the transition payment and the amount that was applied as a lump sum payment toward your student loans when filing an Employment Certification Form (ECF). Also include a statement that the lump sum payment was from a transition payment for service in the Peace Corps and that the lump sum payment should count toward PSLF.

Total and Permanent Disability Discharge

Note that Federal Parent PLUS loans can be discharged if the parent borrower becomes disabled, but not if the student becomes disabled.

  • The U.S. Department of Veterans Affairs (VA) determines that the borrower is unemployable because of service-connected disabilities that are 100% disabling.
  • The borrower qualifies for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) from the Social Security Administration (SSA) and the next disability review will be 5 or more years after the date of the most recent disability status determination.
  • A U.S. doctor certifies that the borrower is unable to engage in substantial gainful activity due to a physical or mental impairment that has lasted or is expected to last for at least 5 years or that can be expected to result in death.