Student loans that are not eligible for federal forgiveness programs (like PSLF or Income-Driven Repayment plans) generally include private student loans, commercially held FFEL Program loans, and Perkins Loans not consolidated into the Direct Loan Program. While federal Direct Loans are generally eligible, Parent PLUS loans are ineligible for some specific, limited relief plans.
Federal loan forgiveness programs refer to federal student loans only—those made by the government, like direct loans. They do not apply to private student loans made from banks, credit unions, and other financial companies.
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 2 refers to a student loan taken out from September 2012 onwards, in England or Wales. Older loans (from England or Wales) and loans taken out in Northern Ireland, are called plan 1 loans.
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.
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.
Types of student loan borrowing options
Your loan can be discharged only under specific circumstances, such as school closure, a school's false certification of your eligibility to receive a loan, a school's failure to pay a required loan refund, or because of total and permanent disability, bankruptcy, identity theft, or death.
Key takeaways
You can be disqualified for federal loans based on your grades, enrollment status or loan status. Private student loans usually require good credit and a reliable source of income. Other financing options include grants, scholarships and state- or college-based aid.
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.
After the borrower makes the required monthly payments on time for 20 to 30 years, depending on the plan, the federal government will forgive any remaining balance. It's important to know that the amount you are being forgiven may be subject to income tax, as of 2026.
No. Defaulted Direct Loans are not eligible for PSLF, and payments made while the loan was in default cannot count toward the 120 required payments. However, a defaulted loan may become eligible for PSLF if you resolve the default. Learn how to get your loan out of default.
The main difference is who pays the interest while you're in school—you or the government. You're responsible for paying the interest from the moment your unsubsidized loan is disbursed. On the other hand, the government pays the interest on your subsidized loan while you're in school and during your grace period.
Loan forgiveness eligibility varies but generally covers public servants (PSLF), those with disabilities, borrowers on Income-Driven Repayment (IDR) plans reaching time milestones (20/25 years), or those qualifying for newer broad forgiveness initiatives based on income and Pell Grant status, often through programs like the SAVE Plan or specific Education Department actions. Key paths include working for government/non-profits (PSLF), proving total disability, or making consistent payments for years under IDR plans.
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.
Credit score: In general, you will need to have good to excellent credit, a FICO score of 680 or higher, to qualify. An excellent credit score paired with a high income will likely give you the fastest path to approval. Income: Lenders may set specific income requirements for you to qualify.