Simple Strategies for Student Loan Debt Relief

Many students need to borrow money for their education, sometimes accumulating significant debt. Is there a way to ease this burden? Fortunately, several student loan forgiveness options are available to help borrowers manage their debts after completing their studies.

While loans are designed to be repaid, circumstances like not finishing a program or entering lower-paying jobs can make repayment challenging. Students often take on large loans, and not everyone secures a high-paying job immediately. Some even leave programs early, leaving them with debts to settle.

Various loan forgiveness programs are designed to assist such students. Here are some widely used options to consider:

Public Service Loan Forgiveness (PSLF)

This program is available to individuals working in public service roles. Eligibility depends on your employer, not your profession. Full-time employees of government agencies, tribal, local, or federal organizations, and qualifying non-profits can benefit from this program—regardless of whether they’ve completed their original loan purpose.

You must work full-time, which typically means at least 30 hours per week, to qualify. Part-time workers do not meet the criteria. This program is also open to AmeriCorps members and Peace Corps volunteers.

However, eligible employers exclude labor unions, political organizations, profit-driven entities, and non-exempt non-profits. To benefit fully, you need to maintain consistent employment in qualifying roles.

Income-Driven Repayment (IDR) Options

This repayment plan caps your monthly payments at 10-15% of your discretionary income, making payments more manageable. After 20-25 years of consistent payments, the remaining balance is forgiven. It's important to note that this forgiven amount may be taxed as income.

To qualify, your repayment needs to be lower than standard plans, especially if you have high debt relative to income. You should notify your loan servicer about any income changes promptly.

Eligible Loan Types

Qualifying loans include direct subsidized or unsubsidized loans, Direct Grad PLUS, FFEL Stafford Loans, Federal Perkins Loans, or Consolidation Loans—provided no parent loans are involved.

Pay As You Earn (PAYE) Forgiveness

Similar to IDR plans, PAYE caps payments at 10% of disposable income. Borrowers who stick with the plan for 20 years can have their remaining balance forgiven. Tax implications are similar, with forgiven amounts considered taxable income.

Revised Pay As You Earn (REPAYE) Forgiveness

Under this plan, repayment is capped at 10% of discretionary income. Undergraduate borrowers must make payments for 20 years, while graduate students may need to pay for 25 years. Income levels do not restrict eligibility, provided the loans qualify.