Student loan forgiveness: the two federal routes
Two federal routes lead to student loan forgiveness. Your Direct Loans are cleared by PSLF after 120 payments, during the years you spend working in public service. Plan forgiveness wipes out the rest once 20, 25 or 30 years are done.
- PSLF: 120. payments
- Plan forgiveness takes 20 to 30 years
- Jan. 1, 2026. cutoff for the tax rule
- 0Tiered Standard gives PSLF credit
The two federal routes to student loan forgiveness
Forgiving student debt comes about in one of two ways. Two routes: public service work, or paying on an income-driven plan long enough. On-time payments on the right plan are needed for both.
PSLF after 120 payments
While you work full-time for an eligible employer, PSLF forgives your remaining Direct Loan balance once you've made 120 qualifying monthly payments. Progress you make under RAP counts toward PSLF. Keisha, a public school teacher, has 72 qualifying payments. 48 more payments are needed, about 4 years.
Plan forgiveness once 20, 25 or 30 years are done
Every income-driven plan forgives what's left once a set time passes.
| Plan | Years to forgiveness |
|---|---|
| RAP | 30 years (360 payments) |
| IBR, borrowed 2014 or later | 20 years |
| IBR, borrowed before 2014 | 25 years |
| PAYE | 20 years, until the plan closes |
| ICR | 25 years, until the plan closes |
Which plans qualify
Progress made under RAP counts toward PSLF. PSLF doesn't count the Tiered Standard Plan. If you switch back, payments made under RAP don't count toward IBR, ICR or PAYE discharge.
Taxes on forgiven amounts
Because of the American Rescue Plan Act, IDR discharges dated Jan. 1, 2021 through Dec. 31, 2025 owe no federal income tax. After 2025, federal tax could apply to an IDR discharge, unless you hit the payment milestone before Jan. 1, 2026. If the milestone came before Jan. 1, 2026 but the discharge came later, no federal tax applies. Some states could still tax a discharge.
Guides on related topics
Common questions
Who is eligible for student loan forgiveness?
Plan forgiveness is available if you have federal Direct Loans and use an income-driven plan. For PSLF, you also need full-time work for an eligible employer.
How do you get 100% student loan forgiveness?
Reach the end of an income-driven plan, or make 120 qualifying payments under PSLF.
Does forgiven student debt get taxed?
Federal tax could apply to an IDR discharge after 2025, unless you met the payment milestone before Jan. 1, 2026.
Is there a public service student loan forgiveness calculator?
PSLF counts the payments you make, not the dollars. 120 qualifying payments are what you need. RAP progress counts toward PSLF. What each of those payments would be is shown by the RAP plan calculator.
Sources listed: Federal Student Aid, PSLF, Federal Student Aid, IDR updates.