Debt Management Options
Mon. - Fri., 9 a.m. - 5 p.m.
In certain situations, you can have your federal student loans forgiven, canceled or discharged, which means you are no longer expected to repay all or part of your loan. Federal loan forgiveness programs are often designed to encourage new grads to work in certain high-need fields or areas, such as:
- Social work
- Health professions
- Public safety
- Volunteer organizations
Loans may also be forgiven because of disability or the closure of your school.
Federal Loan Forgiveness Programs
Teacher Loan Forgiveness: If you are a teacher and also a new borrower (i.e., you did not have an outstanding balance on a Direct Loan or FFEL Program loan on Oct. 1, 1998, or on the date you obtained a Direct Loan or FFEL Program loan after Oct. 1, 1998) and have been teaching full-time in a low-income elementary or secondary school or educational service agency for five consecutive years, you may be able to have as much as $17,500 of your subsidized or unsubsidized loans forgiven.
Perkins Loan Cancellation and Discharge: The following Federal Perkins Loan Program cancellations apply to individuals who perform certain types of public service or are employed in certain occupations. For each complete year of service, a percentage of the loan may be canceled. The total percentage of the loan that can be canceled depends on the type of service performed. Depending on the type of loan you have, and when that loan was taken out, you may be eligible to cancel part of or your entire loan if you have served as one of the following. (There is no standard application form for Perkins Loan cancellations. Contact the school that you were attending when you received the loan.)
- Volunteer in the Peace Corps or ACTION program (including VISTA)
- Member of the U.S. armed forces (serving in area of hostilities)
- Nurse or medical technician
- Law enforcement or corrections officer
- Head Start worker
- Child or family services worker
- Professional provider of early intervention services
Public Service Loan Forgiveness (PSLF) Program: This program hopes to encourage individuals to enter jobs full-time in the realm of public service. These include positions at any federal, state, or local government agency, entity, or organization and may include nonprofit organizations. In order to qualify, a borrower must have made 120 qualified payments on their loans while employed full time by certain public service employers. Borrowers may qualify to have the remainder of their loans after this paid off only if the loan they received was under the William D. Ford Federal Direct Loan Program. Other loan types may be consolidated into a Direct Consolidation Loan which will then be covered by PSLF; however payments made before consolidation do not count towards the 120 qualified loan payments.
Other Loan Forgiveness Programs
The following programs all have varying eligibility and benefits; please contact each program directly for the most up-to-date information.
AmeriCorps: Serve for 12 months and receive up to $7,400 in stipends plus $5,500 to be used towards your loan.
Peace Corps: Volunteers may apply for deferment of Stafford, Perkins, and Consolidation loans and partial cancellation of Perkins Loans (15% for each year of service, up to 70% in total). Volunteers make a real difference in the lives of real people with two years of service in more than 70 developing countries.
Volunteers in Service to America (VISTA): Volunteer with private, nonprofit groups that help eradicate hunger, homelessness, poverty and illiteracy. Provide 1,700 hours of service and receive $5,500.
U.S. Office of Personnel Management-Student Loan Repayment Program: Federal agencies are authorized to repay certain types of federally insured student loans as a recruitment and retention incentive for highly qualified personnel.
National Health Service Corp: Fully trained health professionals, including clinical social workers, who are dedicated to working with the underserved and have qualifying educational loans are eligible to compete for repayment of those loans if they choose to serve in a community of greatest need. In addition to loan repayment, these clinicians receive a competitive salary, some tax relief benefits, and a chance to have a significant impact on a community.
Massachusetts Loan Repayment Program for Health Professionals (MLRP): The MLRP provides Licensed Independent Clinical Social Workers (LICSW) with up to $50,000 toward outstanding educational loans as an incentive to work in a community where there is a significant shortage of health care providers or other barriers to care. In order to qualify, an LICSW has to work at a qualified site, and make a commitment of two years of full time work or the equivalent extended commitment of part time work (e.g. a 20-hour work week will mean a 4-year contract) providing services in an eligible health care organization. At the end of their commitment, participants can re-apply to the program. The MLRP depends on "shortage designations" to determine applicant eligibility. Shortage designations are a way for communities and heath care providers in Massachusetts to establish a need for health care professionals and resources. You can learn whether a site or area is designated as a shortage area at