The Reddit Guide to Student Loan Forgiveness

The guidelines for repaying student loan debt are often difficult to understand. The information you get from the internet and even your lender can often seem vague and hypothetical, yet you need to what to do in your specific situation. Particularly when it comes to student loan forgiveness, there are many rules and eligibility requirements that are confusing to navigate.

So it's no surprise borrowers look for information anywhere they can. One place that may come as a surprise as a goldmine for information about student loan forgiveness is Reddit, an internet forum with hundreds of thousands of "subreddits" dedicated to specific topics, including advice from the experts.

The problem is that Reddit can be hard to navigate unless you're already an avid Reddit user. That's why we've combed through the subreddits related to student loans. We've extracted the most useful nuggets of wisdom to save you the time of having to comb through Reddit yourself. Here's what we found on the subject of loan forgiveness. 

Some programs are occupation-specific

There are various student loan forgiveness programs, each with its own requirements and, sometimes they target specific occupations or fields.

One example is the Teacher Loan Forgiveness Program. In a post last year, a Reddit user and employee with a company under contract with the Department of Education explained that this program erases up to $17,500 of subsidized or unsubsidized federal student loans if you have worked for five consecutive years at an approved school.

For nurses who work in high-need, nurse-shortage areas, the Federal NURSE Corps Loan Repayment Program is an option after three years. There is also one for military, and another for lawyers working at the Department of Justice.

Depending on the career field you enter, you might have a chance at qualifying for a loan forgiveness program. We've outlined several of these programs here. 

It’s not just for government employees

You may know that Public Service Loan Forgiveness (PSLF), the most widely known forgiveness program, offers relief to government employees. But you may not realize that there is a wide range of occupations that qualify for forgiveness under this program.

Others who might be eligible include people who work in:

• The military
• Emergency management
• Law enforcement
• Head start and state-funded education
• Some public health programs
• Non-profits, and
• Public libraries.

But it's more about who you work for

A misconception that a student loan expert addressed in an Ask Me Anything thread is a biggie — that is, that your job title is the be-all, end-all of loan forgiveness eligibility. The student loan expert dispelled this myth entirely, stating: "It doesn't matter what you do — it matters who pays you. There are no defined jobs."

Not all loans qualify

One of the most confusing requirements for loan forgiveness is which loans qualify.

As explained by the first Reddit user we mentioned, since each program has its own requirements, you need to be careful about understanding which program you hope to apply for and which loans are accepted.

For Public Service Loan Forgiveness, the most commonly referenced program under which some of your debt can be forgiven, only Direct Loans qualify.

For Teacher Loan Forgiveness, both Direct and FFELP loans qualify.

Medical professionals have several programs under which they may be able to get their debt forgiveness, and each of these programs will have its own requirements. 

For PSLF, you must be paying under a specific plan

Because many of these programs are confusing, it's no surprise that many people are getting incorrect advice. 

For example, when a Reddit user posted earlier this year that a loan servicing adviser said she must prove "financial hardship" for the entire time she's repaying in order to qualify for PSLF.

This isn't quite accurate. As other commenters chimed in, there is no maximum income level to qualify for the program, but you need to be on a qualifying repayment plan. Some of those payment plans do have income requirements, but PSLF does not. 

As long as you meet the requirements of PSLF and you are paying on any of the following plans, you can have your loans forgiven:

• Revised Pay As You Earn (REPAYE)
• Pay As You Earn (PAYE)
• Income-Based Repayment (IBR)
• Income-Contingent Repayment (ICR)
• Standard repayment
• Any other payment plan with monthly payments that equal or exceed standard repayment monthly payments

Consolidate before, not after, starting your qualifying payments

Most of the programs for loan forgiveness require you to make a certain number of on-time payments before your debt is erased. But it's important to realize that consolidation wipes away your history of payments, forcing you to reset the clock. The student loan expert suggests consolidating your loans, if you need to, sooner rather than later.

Here's an example: To qualify for PSLF, you need to make 120 on-time monthly payments under either an income-driven repayment plan, or the 10-year standard plan on Direct Loans.

You might want to consolidate your loans to make payments easier or because you have both Direct and Perkins Loans and want to have access to PSLF, as described here. In both of these situations, consolidation creates a new loan and wipes out any prior qualifying payments for PSLF. "The money still is there and applied but your 120 PSLF counter goes back to zero," the expert says.

Make sure you qualify sooner rather than later

As this student loan expert on Reddit points out, you are not required to submit an application for PSLF until you have the 120 qualifying payments. But borrowers on Reddit have shared their horror stories about paying for 10 years and only then finding out that their loans didn't qualify. 

To start working toward PSLF, you can and probably should complete and submit paperwork as soon you can, and you should technically submit this paperwork annually. This way, if you are not actually eligible, you'll know before spending the next 10 years relying on PSLF.

See also: 9 Ways People Accidentally Sabotage Student Loan Forgiveness

Qualifying payments can be applied to PSLF retroactively 

If you didn't submit your PSLF paperwork upfront, a little-known fact is that, if you have worked for an eligible employer in the past but never completed the paperwork, your past employment history and qualifying payments can be applied retroactively.

The student loan expert points out that you just need to fill out the employment certification form. Make sure that you made on-time payments on qualifying loans during that time before you submit your paperwork. 

What happens if you’re laid off or change employers?

Unfortunately, if you're laid off or otherwise stop working at a qualifying employer, any payments you make after that won't count toward loan forgiveness. But the good news is that "your past eligible payments will still count once you are again working for an eligible employer," the expert writes.

The Department of Education employee explains that payments do not have to be consecutive. "If you work for a government agency and take off a couple of years when you have a baby and then start working again, those qualifying payments will still count towards forgiveness, as long as you were paying on a qualifying plan and working for a qualifying employer," they write.

Likewise, don't fret too much about making one late payment. While that month won't count toward your 120, you can continue making on-time payments going forward and still qualify for PSLF.

The amount forgiven is taxable under some programs but not PSLF

Under all income-driven repayment plans, your remaining balance will be forgiveness after 20 or 25 years. But, if you're repaying your loan debt under these programs, the amount that's forgiven is considered to be taxable income in that year. "If you have a million dollars forgiven, you will be paying taxes on a million dollars of income that year," explains one Reddit user. 

That's not the case for PSLF, under which any amount is forgiven with no tax consequences. This is a really important distinction, as having to pay taxes on a forgiven loan amount can mean you will end up paying a lot more than you think.

Loan forgiveness is unlikely to be repealed

This discussion focuses what might happen to student loans under President Trump’s education policies. Some of the proposed changes in the administration's education budget include the elimination of Public Service Loan Forgiveness. 

But when Reddit users asked the student loan expert if the current president or future president's power to cancel the program, she was clear that borrowers currently repaying and relying on PSLF for loan forgiveness have nothing to worry about. "No," she answered. "Only Congress does. And Congress has never removed an existing benefit from existing federal loans. If they do change PSLF, and they probably will, the change will only affect loans made after the date of enactment."

Consider that PSLF isn't always the best option

It sounds like the best possible solution: getting some of your debt wiped out after you've been diligent about making payments. But in some cases, student loan forgiveness may not be the best option. In a separate post in the PSLF subreddit, a student loan expert offers this advice: "You will also want to make sure that PSLF is the right path for you. Some people get so caught up in the idea of forgiveness they forget the real goal, which is to pay the least amount over time."

As she notes, depending on various factors like your income and debt amount, you might be better of paying off your loans aggressively than relying on PSLF to eliminate your debt.

Here's an example: A borrower may qualify for PSLF but would pay more money out of pocket trying to make the 120 qualifying payments than if they would have just repaid their loan under the 10-year standard repayment plan. In other words, even if you qualify, PSLF isn't always the right choice.

This repayment calculator can help you decide whether completing 120 qualifying payments for PSLF is the best option for you.

On top of comparing how much you'll spend, there are other factors to consider. Think about whether you really want to be working for the government for nearly 10 years. Do you see yourself working in the public service field for that long, or do you eventually want to go into the private sector? And how quickly would you like to pay off your student loan debt? If you'd rather see this debt gone sooner rather than later, a forgiveness program that requires a 10-year commitment may not be the answer.

Don't pay anyone for help with loan forgiveness

After one user posted about their experience with getting cold calls about loan forgiveness programs from various companies, the student loan expert made it clear: "There isn't a person or entity on the planet that can get you access to a benefit or a lower payment or forgiveness that you can't do yourself for free by working directly with your loan holder." Unfortunately, it's not illegal to charge someone for student loan help, but these are scams. 

Still have questions about PSLF or other loan forgiveness programs? Here's a run-down of the best programs under which some of your debt can be wiped out.