What Is Student Loan Forgiveness?

• 3 minutes of estimated read.
• in: Student Loans
• Written by: Charlotte Harper

Student loan forgiveness is a term that refers to various programs or initiatives that can reduce or eliminate some or all of a borrower’s federal student loan debt. There are different types of student loan forgiveness, such as:

• Public Service Loan Forgiveness (PSLF): This program forgives the remaining balance of federal Direct Loans after 120 qualifying monthly payments while working full-time for a qualifying employer, such as a government agency or a non-profit organization.
• Income-Driven Repayment (IDR) Forgiveness: This program forgives the remaining balance of federal Direct Loans after 20 or 25 years of repayment under an income-driven plan, such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), or Income-Contingent Repayment (ICR).
• Teacher Loan Forgiveness: This program forgives up to $17,500 of federal Direct or FFEL Loans after five consecutive years of teaching full-time in a low-income school or educational service agency.
• Borrower Defense to Repayment: This program forgives federal Direct Loans for borrowers who were misled, defrauded, or otherwise harmed by their school or servicer.
• Closed School Discharge: This program discharges federal Direct or FFEL Loans for borrowers who were enrolled or withdrew within 120 days of their school’s closure.
• Total and Permanent Disability Discharge: This program discharges federal Direct, FFEL, or Perkins Loans for borrowers who are unable to work due to a physical or mental impairment that is expected to last at least 60 months or result in death.
• Death Discharge: This program discharges federal Direct, FFEL, or Perkins Loans for borrowers who die.

For 2023, there are some important dates and developments that borrowers should be aware of regarding student loan forgiveness. According to some web sources123, some of them are:

• June 30: The expected date for the U.S. Supreme Court to issue a decision on the legality of President Biden’s mass student loan forgiveness initiative, which would provide up to $20,000 in one-time student debt relief for up to 40 million borrowers. The program was blocked by federal courts last fall and is currently pending appeal.
• July 1: The effective date for new regulations that will impact many existing federal student loan forgiveness and discharge programs, such as PSLF, IDR Forgiveness, Borrower Defense to Repayment, and Total and Permanent Disability Discharge. The new regulations will expand the eligibility criteria, simplify the application process, and provide more relief for borrowers.
• September 30: The current expiration date for the Covid-19 student loan payment suspension and interest waiver, which applies to most federal student loans. During this period, borrowers do not have to make payments on their loans and no interest accrues. The payment suspension also counts toward student loan forgiveness programs like PSLF and IDR Forgiveness.
• December 31: The deadline for borrowers to apply for the IDR Account Adjustment, a one-time fix that will apply retroactive credit toward a borrower’s 20- or 25-year student loan forgiveness term under an IDR plan. The adjustment will count prior periods of repayment, deferment, forbearance, and consolidation toward IDR Forgiveness.