10 types of student loan forgiveness you could earn as a federal borrower

One of the biggest perks of borrowing from the U.S. Department of Education is the potential for student debt relief. But in recent years, many of the pathways to student loan forgiveness and cancellation have narrowed. 

If you qualify for student loan forgiveness, it can lift a massive financial burden from your shoulders. The only downside is that you’ll have to jump through some hoops—and wait a decade or more—to earn it.  If you don’t qualify for forgiveness, or if you discover you could save more money by paying off your loans early, there are other options to make the process go a little more smoothly. Here’s what you need to know.

What's changed in 2026? What happened to IDR forgiveness and SAVE? 

Given all the changes to the student loan landscape over the past few years, you might be suffering from a diagnosable case of policy whiplash. You’re not the only one. 

When the Trump Administration’s One Big Beautiful Bill passed in 2025, it rolled back several repayment plans and protections that borrowers had counted on for years. Court proceedings have also nixed Biden-era promises, leaving some borrowers feeling like they’d had the rug pulled out from under them. While there still may be changes yet to come, here’s where things stand now: 

• The SAVE Plan has ended. The Biden Administration introduced a new income-driven repayment plan called Saving for a Valuable Education (SAVE). In March 2026, the Trump Administration put an end to that plan after a court ruled it overgenerous.

• Most IDR forgiveness is now taxable. As of January 2026, any amount you have forgiven through an IDR plan is subject to federal income tax. (Other forgiveness pathways, including Public Service Loan Forgiveness will remain tax-free.)

• The RAP Plan is replacing SAVE. The new Repayment Assistance Plan comes online in July 2026. Through RAP, student borrowers will be able to earn loan forgiveness, but the forgiven amount will be taxable and only available after 30 years of payments. 

• PAYE and ICR are going away. In 2028, two other IDR plans—Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR)—will sunset. Affected borrowers will be switched to either RAP or an Income-Based Repayment (IBR) plan.

• PSLF is under scrutiny. The federal government is currently reviewing some proposed changes to PSLF eligibility guidelines. If the proposals pass, borrowers working for certain employers may no longer qualify for PSLF. (Check StudentAid.Gov for updates.)

Student loan forgiveness vs cancellation/discharge: What’s the difference?

The federal government usually refers to “forgiveness” as a type of debt relief granted to borrowers who take intentional steps to earn it. There are two main ways to get debt forgiveness as a federal student loan borrower:

• Through the Public Service Loan Forgiveness Program (PSLF). This option is exclusively for eligible borrowers who work in certain public service industries, and there are steps you need to take at the outset of your loan to qualify. Right now, forgiveness through PSLF is tax-free, though the Department of Education is weighing some changes that could restrict eligibility. Monitor StudentAid.Gov for the latest. 

• By making regular payments on an income-driven repayment (IDR) plan. If you still have an outstanding balance after 20 to 30 years of enrollment in an IDR plan, that amount will be forgiven. (However, the forgiven amount will be taxed as income.)

Conversely, the U.S. Department of Education typically uses the term “discharge” when it cancels debt as a result of some kind of mishap or serious hardship, including:

• A university shutting down

• Bankruptcy

• The death of a borrower

• If a borrower becomes totally and permanently disabled.

For the purposes of this article, we’ll use “forgiveness” and “cancellation” interchangeably, because the impact for you as a borrower is the same—if your loans are “forgiven” or “canceled,” you no longer have a balance due, as if that debt has disappeared.

What student loan forgiveness programs are still available in 2026?

In general, you can receive total or partial student loan cancellation if you complete a forgiveness plan (such as PSLF) or if you are unable to pay your loans in full due to circumstances outside your control.

Additionally, your loans may be discharged if you borrowed funds on behalf of a child who has died or become disabled, or if you don’t repay your loans within 20 to 30 years while on an income-driven repayment plan.

Income-driven repayment plan forgiveness

Income-driven repayment (IDR) plans are designed to help manage federal student loan payments based on a borrower’s income and family size. If borrowers have remaining balances on their loans after making payments for 20 to 30 years, depending on the specific plan, the remaining balance may be eligible for forgiveness. Note: As of 2026, the forgiven balance will be taxed as income in the year it is received. 

The amount of forgiveness under IDR plans depends on the plan selected by the borrower and other factors such as income, family size, and loan balance. For example, the Pay As You Earn (PAYE) plan provides forgiveness for the remaining loan balance after 20 years of qualifying payments. However, the Income-Contingent Repayment (ICR) plan provides forgiveness after 25 years and bases payments on discretionary income.

Here’s how each plan breaks down:

• Repayment Assistance Plan (RAP): The newest IDR plan, RAP calculates your monthly payment amount as a percentage of your adjusted gross income (AGI)—anywhere from 1% to 10%. Under RAP, you’ll make a minimum payment of $10 per month and can qualify for forgiveness after 30 years of qualifying monthly payments. 

• Pay As You Earn (PAYE) Plan: This plan caps payments at about 10% of your discretionary income, but never more than your standard 10-year repayment amount. The repayment term is 20 years. Right now, the PAYE Plan is only available to first-time borrowers. It’s also due to be phased out by July 1, 2028. Any borrowers on the PAYE Plan at that time will be switched over to the IBR or RAP plan, depending on their eligibility. 

• Income-Based Repayment Plan: The terms of this plan vary depending on when you enrolled. If you’re a new borrower after July 1, 2014, your payments will never be more than 10% of your discretionary income (if you’re not a new borrower they will generally be 15% of your discretionary income, but never more than the Standard Repayment Plan amount). The repayment term is 20 years if you’re a new borrower, but 25 if you’re a borrower before July 1, 2014. Borrowers are able to enroll in the IBR plan only if they’ve taken out their loans before July 1, 2026.

• Income-Contingent Repayment Plan: Under this plan, your payments will be the lesser of 20% of your discretionary income OR what you would pay on a 12-year repayment plan. Any remaining debt will be canceled after 25 years of qualifying payments. Note: like the PAYE Plan, ICR will sunset by July 1, 2028. At that point, any borrowers on ICR will be switched over to the IBR or RAP plan.

Public Service Loan Forgiveness (PSLF)

The PSLF program provides loan forgiveness to individuals who work in public service and meet specific requirements. Public Service Loan Forgiveness is the most common way student loan borrowers get their loans forgiven. This is also one of the few ways to earn tax-free loan forgiveness.

Who qualifies for Public Service Loan Forgiveness in 2026?

• Eligibility: To be eligible for PSLF, you must have Federal Direct Loans and work full-time for a qualifying employer, which includes government organizations (federal, state, local) and certain nonprofit organizations.

• Qualifying payments: You have to make 120 qualifying monthly payments under a qualifying repayment plan, such as an Income-Driven Repayment (IDR) plan. These payments must be made while working full-time for a qualifying employer.

• Employment Certification: You should submit the Employment Certification Form (ECF) annually or whenever you change employers. This form verifies eligibility and tracks progress toward the 120 qualifying payments.

• Approval and Loan Forgiveness: After making the 120 qualifying payments, you can apply for loan forgiveness. Once reviewed and approved, the remaining loan balance is forgiven tax-free. Remember: Forgiveness is not automatic and must be applied for.

Teacher Loan Forgiveness

Teacher Loan Forgiveness is a federal program designed to provide loan forgiveness to teachers who work in low-income schools. Through this program, eligible teachers can have up to $17,500 of their Direct or Federal Stafford Subsidized or Unsubsidized Loans forgiven after completing five consecutive years of teaching at a qualifying school.

Who qualifies for Teacher Loan Forgiveness? 

To qualify for teacher loan forgiveness, teachers have to meet certain requirements, such as holding a full-time teaching position in a low-income school or educational service agency for five complete and consecutive years. You also need to be considered a “highly qualified teacher.” The program has specific criteria for who is eligible and what constitutes a low-income school or educational service agency. (You can find those details on the Federal Student Aid website.) It’s important to know, however, that you can’t get credit toward Teacher Loan Forgiveness and PSLF at the same time.

Disability discharge

If you have a total and permanent disability, you may be eligible to have your federal student loans discharged via the Total and Permanent Disability (TPD) Discharge program. This program applies to both Direct Loans and Federal Family Education Loan (FFEL) Program loans.

If you meet certain criteria, you can apply for a TPD discharge by completing the application and providing the required documentation. If you are approved for a TPD discharge, you may need to continue submitting documentation during a three-year post-discharge monitoring period. If you take out new student loans during this time, you’ll have to prove that you’re able to once again attend school and work. If you’re successful, your disability discharge will be revoked.

Discharge in cases of unexpected school closure

A closed school discharge is a discharge of federal student loans that were taken out for a program of study, but couldn’t be benefited from because the school closed while the borrower was enrolled or shortly after they withdrew. The Department of Education offers this discharge to provide relief for borrowers who were unable to complete their studies and, as a result, couldn’t benefit from the student loans they took out.

To be eligible for a closed school discharge, you have to meet specific requirements, such as not completing your program because your school closed and not transferring your credits to another institution that offers the same program of study. You must also have been enrolled in the closed school within the timeframe listed in the Department of Education regulations.

If you’re eligible for a closed school discharge, you may have your loan discharged entirely or receive a refund of any payments made on the loan. It’s important to note that not all loans are eligible for a closed school discharge, and this process only applies to federal student loans. Some types of closed school discharge are automatic; others require an application.

Discharge in cases of being misled by your school

Federal loans come with protections that can help you get your student loans discharged if you borrowed money to attend a school that misled you. For example, a few years ago, the Biden Administration canceled loans for 1,200 students who attended the University of Phoenix between 2012 and 2014. The university had run a national ad campaign advertising partnerships with American corporations that could provide professional opportunities to students, when they actually didn’t offer those benefits to students.

Here are the types of forgiveness you could qualify for if you were misled by your school:

• Borrower Defense Loan Discharge: You can apply for your loans to be discharged—and potentially even get a refund of payments already made—if your school is found to have engaged in at least one of six different types of misconduct. These include misrepresentation; omitting information that might have dissuaded you from enrolling or taking out loans (such as graduate employment rates); breach of contract; and a court judgment ruling that your school has broken the law, among others.

• False Certification Discharge: You may be able to get your loans discharged if you never should have taken them out in the first place because of ineligibility or lack of consent. For example: if your university certified your eligibility for loans when you weren’t eligible; if they told you that you were eligible for employment in your discipline but you aren’t; or if you did not authorize loans to be taken out on your behalf.

• Unpaid Refund Discharge: If your student loans were sent directly to your university and you later withdrew, the university is required to return excess funding to your loan servicer. If they fail to do this, you can apply for an Unpaid Refund Discharge, which cancels debt you shouldn’t owe for the portion of your loan that should have been returned.

Parent loan forgiveness

Parent borrowers who take out Parent PLUS Loans to fund their children’s education are also eligible for loan forgiveness under certain circumstances. In general, they’re eligible for the same discharges as student borrowers, such as:

• If the university is guilty of misconduct

• If you, the borrower, become permanently and totally disabled

• If loans were taken out fraudulently

• If the student withdraws and the money is not returned to the loan servicer.

Additionally, Parent PLUS Loans will be canceled if the parent or student dies, or if the parent qualifies for bankruptcy discharge. Unfortunately, Parent PLUS Loans that weren’t successfully incorporated into a Direct Consolidation Loan before July 1, 2026 aren’t eligible for PSLF or IDR forgiveness. 

Discharge in cases of identity theft

A forgery loan discharge is the discharge of student loans that were borrowed through forgery or identity theft. If your identity was stolen and used to borrow student loans that you never received or benefited from, you may be eligible to apply for a forgery discharge. This discharge is different from other types of loan discharges and requires a separate application.

The Higher Education Act (HEA) regulations provide loan discharges for unauthorized signatures on loan application documents, promissory notes, loan checks, and electronic funds transfers. These regulations apply to Direct Loans as well as Perkins and FFEL Loans held by the U.S. Department of Education. Learn more about applying for forgery discharge.

Bankruptcy discharge

Discharging student loans in bankruptcy can be challenging but not impossible. To do it, you’ll need to file an “adversary proceeding” within bankruptcy court.

During this proceeding, you’ll have to demonstrate that repaying their student loans would cause an “undue hardship” on yourself and your dependents. The specific criteria for proving undue hardship might be different based on the jurisdiction, but it typically involves demonstrating three factors:

• Poverty: The borrower must show that they cannot maintain a minimal standard of living for themselves and their dependents if forced to repay the student loans.

• Persistence: The financial hardship must be expected to persist for a significant portion of the repayment period of the student loans.

• Good-faith effort: You have to demonstrate that you have made a good-faith effort to repay your loans prior to seeking bankruptcy relief.

Remember that meeting the undue hardship standard can be challenging, and not all borrowers are successful.

Discharge due to death

If a federal student loan borrower dies, their loans can be discharged after proof of death has been submitted. This applies to both parents and students: if a parent borrower takes out a Parent Plus Loan, their loan will be discharged in the event of the death of either the parent or student. Most other student loans will only be discharged if the student borrower has died.

When does refinancing make more sense than waiting for forgiveness? 

Over the last few years, student loan forgiveness has become more strictly guarded. It’s harder to qualify for and harder to earn. Plus, if you do manage to get your debt cancelled, there’s now a good chance you’ll get stuck with a hefty tax bill. 

Given all these changes, is student loan forgiveness still worth pursuing? For some borrowers, it is. If you qualify for PSLF or if you have clear grounds for discharge—like school closure or permanent disability—student loan forgiveness could save you a big chunk of change on a relatively short timeline with no tax penalty. But if you’re holding out for forgiveness through an income-driven repayment plan, you could have a long road ahead of you.

It might sound counterintuitive, but waiting for student loan forgiveness can actually be more expensive than paying off your loans early. If you get stuck with a RAP plan, you could end up making 30 years worth of payments—which means 30 years worth of interest. If your remaining balance at that point is less than that excess interest, you’ll pay more over the long run.

The case for payoff is even stronger if you qualify for refinancing¹. With refinancing, you swap out your current loans for a single new loan with a private servicer. If you meet your lender’s eligibility requirements, you could also secure a lower interest rate—which could save² you even more money over time. That could make it a good choice for borrowers with good credit and stable income who don’t qualify for big payment reductions under IDR plans anyway. 

To recap: 

Student loan forgiveness could make sense for you if: 

• You qualify for PSLF

• You’ve suffered a clear, documentable hardship that could qualify you for discharge.

• You’ve been paying into an IDR plan for years and are nearing forgiveness.

• You earn a low income and/or have a high loan balance—in which case you might save more by waiting for IDR forgiveness than by paying off your loans early. 

Refinancing may be a better bet if:

• You aren’t eligible for PSLF or any version of hardship discharge.

• You have high interest rates on your current loans. 

• You don’t expect to need access to federal borrower protections like deferment or forbearance 

• You have strong, stable income and don’t qualify for a significant payment reduction under an IDR plan

• You’ll likely pay off your loans before the 20- to 30-year IDR timeline is up

• You don’t want to spend the next few decades making loan payments

• You’d prefer a private loan servicer rather than enduring more federal policy whiplash

The math can be tough to eyeball. If you’re not sure which option could net you the most savings, try plugging your details into an online tool like Payoff Path³. Payoff Path takes your loan info and runs a quick analysis to determine which repayment route could save you the most money over time. It then shows you all your options in an easy-to-read dashboard—making it way easier to compare, contrast, and pick the best path forward. 

How do I apply for student loan forgiveness/cancellation?

Each type of loan and repayment plan has a different process for forgiveness. You can consult StudentAid.gov for detailed information about each plan, or you can call your loan servicer (the company managing your federal debt).

What happens if my application is approved?

What happens after you apply for forgiveness depends on whether you’re eligible for partial or total cancellation of your remaining debt. If your whole loan is forgiven, that’s it—you’re done, and you don’t need to make any more payments. Your loan servicer will typically issue you a payoff letter between 20 and 45 days after making your final payment. The letter will confirm that the loan has been paid off in full. 

If you have only received partial forgiveness, however—such as for one loan out of several that you borrowed—you will need to keep making payments until those loans are either paid off in full or eligible for forgiveness.

What should I do if my application is denied?

If your application is denied, you should keep paying your loans until you hear otherwise. It’s possible that you haven’t made enough qualifying payments, or that previous payments weren’t successfully counted. If you suspect there was an error, reach out to your loan servicer. They may be willing to make changes if you can provide proof of uncounted payments.

See how much you could save by refinancing

Recent policy changes have rebalanced the scales for millions of borrowers. For many, waiting around for forgiveness just doesn’t make financial sense anymore. If you’ve decided to move toward an early payoff strategy instead, consider student loan refinancing as a useful first step. 

If you qualify for a lower interest rate on your refinanced loan, you could save thousands of dollars over the course of repayment. Just keep in mind that once you refinance, your loans become private loans. That means giving up certain benefits like deferment and forbearance as well as income-driven repayment. 

Still, the savings could be worth the tradeoff, especially if you don’t expect to take advantage of these programs. To see how much you could save, check your rate with Earnest today. It only takes minutes and won’t hurt your credit score.

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

1 Please note that you will lose benefits associated with your underlying federal loans, such as federal Income-driven Repayment Plans, Economic Hardship Deferment, Public Service Loan Forgiveness, or other deferment and forbearance options, if you refinance into a private loan. If you file for bankruptcy, you may still be required to pay back this loan.

2 Choosing to refinance to a longer term may lower your monthly payment, but increase the amount of interest you may pay. Choosing to refinance to a shorter term may increase your monthly payment, but lower the amount of interest you may pay. Review your loan documentation for the total cost of your refinanced loan.

3 Payoff Path is offered by Earnest, and earning or applying benefits (if any) depends on eligibility, your financial profile, and applicable policies. Terms and conditions apply; see Earnest’s Terms of Use and Privacy Policy for full details. Offers, features, and availability are subject to change without notice.