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The "How to" Guide for Loan Forgiveness

 This is a way to discharge your student loans if you meet certain requirements. Loan forgiveness programs do not get much press, so it is often up to the borrowers to find out what forgiveness programs are available to them.

Find Out if You Qualify

The first step to erasing your loans is figuring out whether or not you qualify for loan forgiveness. Most forgiveness programs are intended for public service or low-paying occupations, such as nurses, teachers, and cops.

The public service program is designed for people who work in government jobs at the federal, state or local level. You may also qualify if you work at a 501(c)(3) nonprofit organization. You must have made 120 on-time, full payments before loan forgiveness kicks in. If your loan payments are too high for your income, you can apply for graduated repayment plans, income-based repayment plans, and other options that may lower your loan payments. As long as you make these payments on time, they are considered full payments for the purposes of loan forgiveness.

It is also important to note that your 120 payments must be made while you are working full-time at an approved organization. You can obtain an Employment Certification form every year that you can fill out and send to the Department of Education. This helps you keep track of your required payments as you make them, rather than trying to verify all 120 payments when you apply for forgiveness.

Once you have completed your 120th payment, you can fill out the Public Service Loan Forgiveness application. You must still be working in a public service occupation when you apply and when your loan amount is forgiven.

Other Options You Have

If your job is not in an approved public service field, you may still be able to take advantage of other loan forgiveness programs. AmeriCorps, Peace Corps, Teach forAmerica, and other programs will pay off part of your student loans in exchange for at least a two-year commitment from you. This work is demanding—teaching at inner city schools or providing aid to war-ravaged countries—but you can pay off a considerable amount of your loans while earning a decent salary.

Afraid you will be paying for your student loans for the rest of your life? With loan forgiveness programs, you may be debt-free sooner than you think. can help you with this and many other financial decisions.