Loan Forgiveness and Repayment Assistance Programs

Loan Forgiveness and Repayment Assistance Programs

Loan forgiveness and loan repayment assistance programs are two tools that can be used to help you manage your student loan repayment. Many programs exist—through a variety of sources—so it’s important for you to understand the eligibility requirements and application process for each one you are considering.  

Federal Public Service Loan Forgiveness

Public Service Loan Forgiveness is not a repayment plan, but an option you can work toward while utilizing an Income-Driven Repayment plan. The PSLF program was established by the College Cost Reduction and Access Act of 2007 to encourage individuals to enter and continue to work full time in public service jobs. Under this program, federal student loan borrowers may qualify for forgiveness of the remaining balance of their Federal Direct Loans after making 120 qualifying payments on those loans while employed full-time by certain public service employers.

Where do I apply?

There is no application for PSLF, currently. Track your progress toward qualifying for forgiveness by submitting an Employment Certification Form with the U.S. Department of Education. This form is not required; however, it is advised that you submit this form to the Department annually. The form and instructions for completing it are available at www.studentaid.ed.gov/publicservice.

Will the forgiven amount be taxable?

No, the forgiven amount is not subject to federal tax under current law.

Additionally, you can contact your school’s financial aid office to learn more. Be sure to ask your financial aid office about any public interest programs the school or state may offer, and be sure to know how payments from other programs may affect your eligibility for PSLF.

Loan Repayment Assistance Programs

Loan Repayment Assistance Programs (LRAPs) can help you manage your student debt. Offered through a variety of sources (school, states, employers), these programs provide financial assistance to graduate who have debt.  Sometimes LRAPs they require that you work in public interest or the government, while others may offer it solely as a benefit of your employment.  Be sure to do your research to see if these programs exist at your school or where you will be living or working.

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