Student Loan Forgiveness Programs

The column that decides most of this is the last one. Forgiveness earned by working in a particular job is excluded from your income by statute; forgiveness earned by waiting out a repayment clock is not, and stopped being tax-free on January 1, 2026.

Public Service Loan Forgiveness is the only program that erases an entire balance in ten years and charges no tax on the way out. It has also, finally, started working at scale: the Department of Education has discharged $93.4 billion for about 1,254,800 borrowers through the program, TEPSLF, and the limited waiver combined, as of April 2026. Another 2.7 million borrowers have certified qualifying employment and are somewhere on the clock.

Five conditions must be true at once. Miss any one of them and the month simply doesn't count — there is no partial credit.

Income-driven repayment forgives whatever remains after a set number of qualifying payments, with no requirement about where you work. The catch has always been the horizon, and the 2025 law that rebuilt these plans made it longer.

RAP — 360 payments, 30 years. The Repayment Assistance Plan opened on July 1, 2026 and is the only income-driven plan available for loans disbursed from that date. It ignores the poverty line entirely and charges a percentage of your whole adjusted gross income on a sliding scale, from 1% for income just over $10,000 to 10% above $100,000, minus $50 a month for each dependent, never below $10. Two features are genuinely generous: RAP waives any interest your payment doesn't cover, so the balance cannot grow, and if a month's payment reduces principal by less than $50, the Department covers the difference up to what you actually paid. Its bands are cliffs, not brackets — a dollar of income over $60,000 moves your entire AGI from the 5% band to the 6% band, which costs about $600 a year.

IBR — 240 or 300 payments. Income-Based Repayment survived, and it remains open to anyone whose loans were all disbursed before July 1, 2026. It charges 10% of the income above 150% of the federal poverty line for your household if you had no federal loan balance before July 1, 2014, forgiving what is left after 240 payments; if you did have a balance then, it's 15% and 300 payments. The requirement to demonstrate a partial financial hardship was eliminated in July 2025, so any borrower with eligible loans can now enroll. Unlike RAP, IBR does not waive unpaid interest — if your payment falls short of the monthly interest, the balance grows for years, which is exactly the case where forgiveness at the end is worth the most.

Credit runs one way between them. Payments you made under earlier income-driven plans count toward RAP's 360. The reverse does not hold: months paid under RAP do not count toward IBR's forgiveness if you switch back later. Treat a move into RAP as a decision you cannot cheaply undo.

SAVE is finished, and PAYE and ICR are closed to new enrollment and terminate on July 1, 2028. Every borrower still sitting in one of them has to choose RAP or IBR before that date; anyone who doesn't is enrolled automatically, and defaults are rarely the plan you would have picked.

From 2021 through 2025, no federal student loan forgiveness was taxable. That provision expired on December 31, 2025 and was not renewed, and the consequence is easy to state and expensive to ignore: income-driven forgiveness is once again treated as cancellation-of-debt income.

Reach RAP's 30-year mark still owing $60,000 and the balance is wiped — and $60,000 is added to that year's income, in a single year, on top of your salary. The IRS Taxpayer Advocate has confirmed that discharges under income-driven plans in 2026 and later are generally taxable, and that borrowers should expect a Form 1099-C. Nothing about the forgiveness is worthless; a five-figure tax bill is still far better than a six-figure balance. But it is a bill, and the time to start saving for it is not the month it arrives.

PSLF is untouched by any of this. It is excluded from income under a separate, permanent provision of the tax code, and so are Teacher Loan Forgiveness, Perkins cancellation, and discharges for death or total and permanent disability. The gap between a tax-free forgiveness at year ten and a taxable one at year thirty is the largest number on this page, and it is the reason to check whether your employer qualifies before you settle for waiting.

Teach full time for five complete and consecutive academic years at a low-income school and the federal government will forgive up to $17,500 if you are a highly qualified secondary mathematics or science teacher, or a special education teacher at any level. Every other qualifying teacher gets up to $5,000. The money is tax-free, and it comes off Direct or Stafford loans only — PLUS loans and Perkins loans are not eligible.

The eligibility trap is the school, not the teaching. Your school or educational service agency must appear in the federal Teacher Cancellation Low Income (TCLI) directory for each of the five years, and a school can drop off the list between years. Check it annually rather than at the end. There is also a quiet cutoff that disqualifies many older borrowers outright: you must have had no outstanding federal loan balance as of October 1, 1998. After the fifth year, you file the Teacher Loan Forgiveness Application, signed by your school's chief administrative officer.

You cannot count the same years twice. Federal rules bar you from claiming Teacher Loan Forgiveness for service that also earns a PSLF benefit. Since a public school is already a qualifying PSLF employer, most teachers face a real choice: take $17,500 after five years, or make 120 payments and have the entire balance forgiven. If your balance is well under $17,500, the teacher program wins on speed. If it is anywhere above that, PSLF is usually worth more — and you can still run the teacher program first and PSLF afterwards, as long as the ten years of qualifying payments are separate from the five you claimed.

Most of the 42.6 million people carrying federal student loans will never qualify for a service-based program, and for a borrower with a modest balance and a decent income, thirty years on RAP is a worse deal than simply repaying the loan. Forgiveness is only valuable when there is something left to forgive: if your income comfortably amortizes the balance, an income-driven plan just stretches the interest.

The calculator above tells you which case you're in — when a route shows "paid off first," the program is worth nothing to you and you should be optimizing the payoff instead. The student loan payoff calculator prices that directly, and how to pay off debt fast covers the levers that move a payoff date when no program is coming to help. One warning if that is your path: refinancing into a private loan buys a lower rate at the cost of every program on this page, permanently. Be sure before you sign.