Overview: Student Loan Forgiveness Program


The biggest obstacle that’s preventing millennials today from seizing new financial opportunities is the burden of college loans.

The average student debt for graduates continues to rise, with the class of 2016 facing an average of $37, 173 of debt, according to Mark Kantrowitz, publisher and vice president for Cappex.com, a college scholarship website. The good news is that there are student loan forgiveness programs that can be part of your plan to get out of debt.

Without the help of programs for student loan forgiveness, it can seem impossible to get out of a tough situation that so many Americans face today. But thankfully, these loan forgiveness programs can help you get rid of your student loan in concrete ways, preventing your loan from dragging down your future.

So, what do you need to know about school loan forgiveness programs?

school loan forgiveness programs

Image Source: Student Loan Forgiveness Program

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1. Contact Your Student Loan Servicer

Getting in touch with your student loan servicer help give you a clearer picture about which student loan forgiveness program is a good fit for you. One of the most well-known and easy to use servicers is Sallie Mae, as their online account access makes it easier to borrow responsibly. But no matter which servicer you’re tied to, try to find out the total sum of your student loans and their respective interest rates.

Once you understand your personal financial situation, it will be easier to find a student debt forgiveness program that works for you.

2. Not All Loan Forgiveness Programs are Created Equal

It’s important to recognize the differences between various student loan forgiveness programs. Some school loan forgiveness programs have career field requirements that, if met, will eradicate your debt. Other student loans forgiveness programs allow you to repay your loans based on a percentage of your income.

If you want to look through the various forgiveness programs for student loans, head over to StudentLoanHero.com—this website is dedicated to providing you with the information you need to know about student debt forgiveness programs. Furthermore, they have a comprehensive list of student loan forgiveness programs and other options that will help you pay off your loans.

One of the more helpful options for programs for student loan forgiveness allows you to put your loans into one lump sum that can be paid off under a regular plan with a singular interest rate. Student loans forgiveness programs with this characteristic are especially helpful in simplifying the loan repayment process.

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3. Check Out the Obama Student Loan Forgiveness Program

Thanks to changes made to the student loan system under the Obama administration, it is easier than before to repay your student loans with a fed loan forgiveness program that works for you. With this specific new student loan forgiveness program, you can select one of five unique repayment plans:

  • Standard Repayment: The borrower will pay a fixed amount each month for the life of the loan. The payment would be determined by your borrowed amount, interest rate, and term of the loan. This is the most common repayment plan for a student loan forgiveness program.
  • Graduated Repayment: The borrower would make payments lower than the standard repayment plan, but would gradually increase every two years. This works out well because as your income increases, you have more money to put into your education loan forgiveness program in a logical way.


  • Income-Contingent (ICR): In this loan forgiveness program, the borrower would make payments based on their income, family size, loan balance, and interest rate.
  • Income-Based (IBR): This student loan forgiveness program bases the borrower’s payment strictly on their income and family size, a feature that can be great for new and young families. The balance of the loan and interest rate are not used in calculating the monthly payment.  The borrower would be responsible to pay 15 percent of their discretionary income to their federal student loans. Borrowers in the IBR can have a payment as low as $0.00/month.
  • Pay As You Earn(PAYE): This forgiveness program for student loans usually has the lowest monthly payment and is also based on your income—but it uses 10 percent of your discretionary income as a payment instead of the 15 percent used in IBR. Qualifying for the PAYE repayment plan is more difficult than the others. 

Each of these options makes this school loan forgiveness program more appealing as you can choose the repayment plan that works for you.

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4. Qualify for the Public Service Loan Forgiveness Program

This student loans forgiveness program operates under the reality that public service workers pull in lower salaries than those in other careers. If you decide to work in a government position, this loan forgiveness program is available to employees of more than ten years.

Public service positions are imperative to keep our country running smoothly and to take good care of American citizens. The Public Service Loan Forgiveness Program is in place to make sure student loans don’t hinder pursuit of a job in government.

If you’re still in college or recently graduated and unsure about which career path to pursue, you should consider entering the public service. Working for the government is not a limited field, and options across the board are numerous, including:

  • Government administration
  • Military service
  • Public safety and law enforcement
  • Public education
  • Library services
  • Public health services
  • Assisting elderly and those with disabilities

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This forgiveness program for student loans is a worthwhile option if you have considered entering the public service field, as it is a student debt forgiveness program that repays your loans in full.

Most prominent of these student loan forgiveness programs go to teachers. Educators are a necessary and essential part of the American infrastructure, so the government is willing to eliminate any student loan debts of teachers that have taught for five years or more.

student loans forgiveness program

Image Source: Forgiveness Program for Student Loans



5. Find a Private Student Loan Forgiveness Program through a Financial Advisor

The benefits behind having a financial advisor in your search for education loan forgiveness programs are manifold. First, you will be able to rely on a professional to find programs for student loan forgiveness that fit your individual circumstances. Second, they can help you establish a fund exclusively for repaying college loans.

When you create this college repayment account, your advisor can help you make the most of your money without dipping into savings. If you get good returns on a higher investment, you can transfer lump sums at a time to repay your student loan debt. This practice, coupled with a student loan forgiveness program, will help you relieve the weight of student loans.

You may think that spending money on a financial advisor is superfluous when you’re already in need of a student debt forgiveness program. However, the advice and financial management they offer is worth the cost, and it makes a valuable relationship long after your student loan forgiveness program is over.



6. Stick with a Budget

As with any personal loan forgiveness program, it’s important to learn how to manage your money as you’re repaying your loans. You should create a budget where every dollar is accounted for. Some helpful resources and tips for creating a budget like this can be found on DaveRamsey.com.

For example, if you are in a two-income household, devote one income to your student loan forgiveness program. With the other income, practice responsible spending practices like couponing or cutting back on electricity usage. It’s also important to avoid the traps of instant gratification because frivolous purchases will make it harder to complete your student loan forgiveness program.



7. Treat the Loan Like a Mortgage

If you start a career that’s high-paying from the start, you should consider treating your student loan forgiveness program like a mortgage. In other words, if you can afford to make large payments to cut the principal more quickly, it will be very financially beneficial to you to do so.

According to financial planner Allan Katz, CFP professional and president of Comprehensive Wealth Management Group in New York’s Staten Island, this helps borrowers by “paying the principal down more quickly, which results in lower interest charges.”

While you’re following your loan forgiveness program, adding payments and sending in checks at a more regular basis (like every two weeks instead of monthly) can lead to a proliferation of benefits. Once that loan is repaid through your student loan forgiveness program, the money you bring in is now available for investments, home ownership, retirement savings, or your own child’s education.

8. Create a 3- to 5-year plan

No matter which of the multiple school loan forgiveness programs you decide to follow, you can have a greater peace of mind by putting into place a personal 3- to 5-year plan.

Sometimes having a student loan forgiveness program can cripple recent graduates in their investing decisions, as the looming need to repay loans can evoke reactions of caution during a time of life that riskier financial decisions should be allowed. But with concrete steps in place for fulfilling your forgiveness program for student loans, you will have greater confidence to use other funds for investment purposes.


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9. Save Well, Live Well

Finally, the most important lesson you can learn to get rid of student loan debt is to save, save, save.

If you’re currently or soon-to-be in college, it’s important to start planning now. Even if you have a federal or private loan forgiveness program, you can also do your part to get a head start saving with a part-time job in college.

And if you’ve already been through the wringer and are looking for a student loan forgiveness program, don’t lose heart. Careful saving and responsible financial decisions can help you get rid of your student loan so that you can fully move on to the next chapter of your life. Once you utilize a loan forgiveness program to get rid of your student loans, you can begin to put your income toward the future of your home, family, retirement, and even your own children’s education.

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