How to Qualify for Loan Forgiveness Student Debt

Loan forgiveness is a practice whereby the federal government cancels all or part of a student’s educational loans. As student loan debt is often a great worry to young people who have recently left education, it is a popular option, but there’s no such thing as a free lunch and there are conditions attached. How can you qualify for loan forgiveness?

The first step before applying for loan forgiveness is to check that you are up to date with your loan payments. The various programs for loan forgiveness do not tend to accept applicants who are in default on their student loan payment schedules, so make sure your house is in order before applying if you want to qualify.

Loan forgiveness is contingent on voluntary service with certain bodies or military service. Volunteers for the Peace Corps, for example, can apply to defer Stafford, Perkins and Consolidation loans according to, and have 15% of any Perkins loans cancelled for every year of service, up to a maximum of 70%. This can be a rewarding option for volunteers, with the opportunity to do great work in over 70 developing countries around the world.

Similarly, 12 months service in AmeriCorps could earn you $4,725 towards your loan debts, as well as a living stipend of more than $7,000.

On the military side, students who sign up to the Army National Guard may qualify for $10,000 towards their education debts under the military’s Student Loan Repayment Progam.

Loan forgiveness is also used to incentivize students into careers which are rewarding and vital for society but which they might otherwise consider too low-paid. Teaching in public schools in certain communities with a high proportion of low income families may qualify you for loan forgiveness, as will practicing law or medicine in deprived areas.

In a broader move, public service workers also qualify for a measure of loan forgiveness following 2007’s College Cost Reduction and Access Act. If you complete 10 years full-time employment in a public service role, your remaining student loan debt will be cancelled, providing you have made 120 loan payments after October 2007 (ie, one payment a month for ten years). Public service roles include work in public health, law enforcement, education, social work, fire fighting and others. If you are unsure whether you qualify as a public service worker, talk to your employer and request more information.

Loan forgiveness is a great way for young people to escape the burden of their education debt, but it requires a serious time and career commitment and is not suited for everybody. If you do qualify, make sure you read the terms and conditions of the agreement very carefully and ensure you know exactly how much of your career you are sacrificing in order to reduce your loans. On the other hand, most of the qualifying programs offer potentially rewarding experiences which could end up developing your career in ways you never thought possible!