Federal Student Aid began accepting and reviewing applications from borrowers seeking loan forgiveness under the Public Service Loan Forgiveness (PSLF) Program in the fall of 2017.
The forgiveness program is only available to a borrower who has no outstanding loan balance under the FFEL Program or the Direct Loan Program on October 1, 1998 or who has no outstanding loan balance on the date he or she obtains a loan after October 1, 1998.
A brief history of IDR
The first income-driven plan was Income-Contingent Repayment, which became available to borrowers in 1995. Over time, new plans have been added through legislation in order to address potential limitations, with the intention of: Expanding eligibility to more borrowers.
If you have not consolidated your Direct Loans, you can buy back months starting with Oct. 2007, when the PSLF program was established by law. If you have Direct consolidation loans, you can buy back starting with whichever is most recent: Oct. 2007 or the earliest disbursement date of your Direct Consolidation Loan.
Congress created the Public Service Loan Forgiveness program in 2007 to encourage people to work in public service. If federal student loan borrowers make payments on their loans for 10 years while working in public service and meeting other requirements, Education forgives the remaining balance on their loans.
The IDR waiver one-time account adjustments have begun, and we expect adjustments to be completed by January 2025. To qualify, some borrowers needed to consolidate their loans by June 30, 2024.
Under all IDR plans, any remaining loan balance is forgiven if your federal student loans aren't fully repaid at the end of the repayment period (either 20 or 25 years). But the length of your repayment period depends on which plan you're on.
Under all of the income-driven repayment (IDR) plans, your required monthly payment amount may increase or decrease if your income or family size changes from one year to the next or if you switch repayment plan.
Yes. Any month when your scheduled payment under an income-driven repayment plan is $0 will count toward PSLF if you also are employed full-time by a qualifying employer during that month.
Public Service Loan Forgiveness (PSLF) Program
PSLF forgives the remaining balance on your Direct Loans after 120 qualifying payments (a minimum of 10 years). Unlike other programs, PSLF doesn't require you teach at a low-income public school.
If you repay your loans under an IDR plan, any remaining balance on your student loans will be forgiven after you make a certain number of payments over 20 or 25 years. Past periods of repayment, deferment, and forbearance might now count toward IDR forgiveness because of the payment count adjustment.
Biden-Harris Administration Approves Additional $4.28 Billion in Student Debt Relief for Nearly 55,000 Public Service Workers | U.S. Department of Education.
Congress created the Teacher Loan Forgiveness Program in 1998 to encourage individuals to enter into and continue the teaching profession within designated elementary and secondary schools that serve low-income families.
Your student loan servicer(s) will notify you directly after your forgiveness is processed. Make sure to keep your contact information up to date on StudentAid.gov and with your servicer(s). If you haven't yet qualified for forgiveness, you'll be able to see your exact payment counts in the future.
Income-driven repayment (IDR) plans are designed to make your student loan debt more manageable by giving you a monthly payment based on your income and family size.
If You Can't Afford Your Payments
Don't wait to contact your loan servicer to discuss options. An IDR plan could lower your payment. If your income drops (for example, if you become unemployed), your payment could be as low as $0 per month. You can request a temporary pause of payments (deferment or forbearance).
Parent PLUS loans can potentially be forgiven after 10 years under specific conditions, such as through the Public Service Loan Forgiveness (PSLF) program after consolidation into a direct consolidation loan. Parent borrowers must enroll in the Income-Contingent Repayment (ICR) plan to qualify for PSLF.
Under the PAYE Plan, IBR Plan, or ICR Plan
If you don't recertify your income by the annual deadline, you'll remain on the same IDR plan, but your monthly payment will no longer be based on your income.
After at least 20 years of student loan payments under an income-driven repayment plan — IDR forgiveness and 20-year student loan forgiveness. After 25 years if you borrowed loans for graduate school — 25-year federal loan forgiveness.
The maximum repayment period is 25 years. After 25 years, any remaining debt will be discharged (forgiven). Under current law, the amount of debt discharged is treated as taxable income, so you will have to pay income taxes 25 years from now on the amount discharged that year.
If you're already on an income-driven repayment (IDR) plan, you may be able to lower your payment by updating your income information. You can pause payments through deferment or forbearance, but that approach has pros and cons.
Income-Driven Repayment (IDR) Forgiveness for SAVE borrowers will change to as low as 10 years for borrowers with initial student loan balances of $12,000 or less. Currently, borrowers must be in repayment for 20 or 25 years before they qualify for IDR forgiveness.
Switching to an income-driven repayment plan won't directly affect your credit score. But, a lowered monthly payment will lower your debt-to-income ratio. That can be good for your credit.