You know your federal student loans are forgiven when your loan servicer or the Department of Education (ED) notifies you, your balance drops to $0 on StudentAid.gov, or your account shows a zero balance, often after reaching payment thresholds (like 20-25 years for IDR or 120 payments for PSLF) or through special programs like SAVE Plan forgiveness. Always check your StudentAid.gov account and keep your contact info updated with your servicer and the ED for official confirmation.
Your servicer will track your qualifying monthly payments and years of repayment and will notify you when you're getting close to the point you would qualify for forgiveness of any remaining loan balance. To check if your remaining loan balance will be forgiven, contact your servicer.
The loans for your course will be written off when you're 65, or 30 years after the April you were first due to repay – whichever comes first.
You qualify for student loan forgiveness through specific federal programs like Public Service Loan Forgiveness (PSLF) for government/non-profit workers, Income-Driven Repayment (IDR) Forgiveness after 20-25 years, and targeted relief for defrauded students (Borrower Defense) or the totally and permanently disabled, with new Biden-era rules also helping long-term borrowers, those with significant balance growth, or those who didn't finish school. Eligibility hinges on having federal loans and meeting specific work, payment, or circumstance requirements.
Any borrowers with loans that had accumulated eligible time in repayment of at least 20 or 25 years (240 or 300 months) saw automatic forgiveness, even if they were not at that time on an IDR plan. Borrowers will continue to see the COVID-19 related forbearances counted toward IDR and PSLF forgiveness.
You repay 9% of everything earned above that amount, so earn more and you repay more each month. The loan is wiped after 40 years whether you've paid a penny or not. This means many people will be repaying their student loans for most of their working lives.
Who qualifies for 2022 student loan forgiveness? To be eligible for student loan debt cancellation, borrowers must have a 2020 or 2021 tax year income of less than $125,000 for individuals and less than $250,000 for married couples or heads of household.
The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.
If you stopped paying your student loans and your loans went into default more than 7 years ago, they can disappear from your credit report.
If you repay your loans under an IDR plan, the end of term balance on your student loans may be forgiven after you make a certain number of payments over 20 or 25 years (240 or 300 monthly payments).
President Biden's SAVE Plan is ending
The U.S. Department of Education announced in early December that it had reached a proposed settlement agreement to end the popular, yet controversial Biden-era student loan repayment plan known as SAVE.
What will happen if my PSLF form is approved? If your PSLF form is approved for forgiveness, you will be notified that the entire remaining balance of your eligible Direct Loans will be forgiven, including all outstanding interest and principal.
There is no income limit for any student loan forgiveness program offered by the Education Department.
How to Apply
Only federal student loans with an outstanding balance as of June 30, 2022, are eligible. Students who are enrolling after June 30, 2022 and who have loans with first disbursements after June 30, 2022 are not eligible for this forgiveness.
Plan 1: For students who started university before 2012. Loans are written off after 25 years or when you turn 65, depending on when you borrowed. Plan 2: For those who started from 2012 onwards. Written off 30 years after you first became due to repay.
There are some situations where paying off your student loan can save you money, but this is only usually the case for very high earners. Even then, these people could still benefit from saving this money for a rainy day.
To check your student loan balance, log in to StudentAid.gov for federal loans to see your dashboard with loan details and servicers, while for private loans, contact your lender directly or check your credit report via AnnualCreditReport.com. Your school's financial aid office or past loan documents are also good resources.