What is Loan Forgiveness?
In certain circumstances you can have your loans forgiven, cancelled, or discharged, this means you no longer have to make payments on your student loans. The terms forgiveness, cancellation, and discharge mean the same thing, but they’re used in different ways. If you’re no longer required to make payments on your loans due to your job, this is generally called forgiveness or cancellation. If you’re no longer required to make payments on your loans due to other circumstances, such as a total and permanent disability or the closure of the school where you received your loans, this is generally called discharge.
We will be going over the common ways to have your loans forgiven or discharged, these options are mostly for CR students and the type of academic programs we offer. Please follow our source links to learn more about the loan forgiveness programs including application cycle dates, qualifying institutions of employment and application process. There are many more loan forgiveness programs out there, these are some of the most common and relevant programs for CR Students.
Federal Loan forgiveness Options:
- Public Service Loan Forgiveness (PSLF):
The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
Qualifying employment for the PSLF Program is not about the specific job that you do for your employer. Rather, it is about who your employer is. Employment with the following types of organizations qualifies for PSLF:
- Government organizations at any level (federal, state, local, or tribal)
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
- Other types of not-for-profit organizations that are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code, if their primary purpose is to provide certain types of qualifying public services
Not sure if you Qualify for PSLF? Department of Education launched a tool to help borrowers determine if they are eligible. Please visit: https://studentloans.gov/myDirectLoan/pslfFlow.action#!/pslf/launch
Apply for PSLF: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service#apply
- Federal Loan Forgiveness for nurses (RN Only):
The NURSE Corps Loan Repayment program provides support to registered nurses (RNs), advanced practice registered nurses (APRNs), and nurse faculty by paying up to 85% of their unpaid nursing education debt. Please refer to the website for eligibility requirements and qualifying facilities: https://bhw.hrsa.gov/loansscholarships/nursecorps/lrp
- National Heath Resources and Services Administration:
Licensed primary care clinicians in eligible disciplines have the opportunity to receive loan repayment assistance through the NHSC Loan Repayment Program (NHSC LRP). This program offers loan forgiveness for Registered Nurses and other Licensed Professionals (example: SUD Counselor) that works in Substance Usage Disorder facilities
In exchange for loan repayment, you serve at least two years of service at an NHSC-approved site in a designated Health Professional Shortage Area (HPSA).
Please refer to the website for eligibility requirements and qualifying facilities: https://nhsc.hrsa.gov/loan-repayment/nhsc-loan-repayment-program.html
- Total and Permanent Disability Discharge:
A total and permanent disability (TPD) discharge relieves you from having to repay a William D. Ford Federal Direct Loan (Direct Loan) Program loan, a Federal Family Education Loan (FFEL) Program loan, and/or a Federal Perkins Loan or to complete a TEACH Grant service obligation.
To qualify for a TPD discharge, you must complete and submit a TPD discharge application, along with documentation showing that you meet our requirements for being considered totally and permanently disabled, to Nelnet, the servicer that assists the U.S. Department of Education with the TPD discharge process.
- Discharged through Bankruptcy (VERY RARE)
You may have your federal student loan discharged in bankruptcy only if you file a separate action, known as an 'adversary proceeding,' requesting the bankruptcy court find that repayment would impose undue hardship on you and your dependents.
You must declare Chapter 7 or Chapter 13 bankruptcy and demonstrate that repayment would impose undue hardship on you and your dependents. This must be decided in an adversary proceeding in bankruptcy court. Your creditors may be present to challenge the request.
If you think you qualify to have your student loans discharged through bankruptcy, please see the Financial Aid Office to see the Financial Literacy Advising Specialist – additional information and guidance is available. It is very RARE to have your loans discharged, the burden of proof for undue hardship is on the student to provide.
California Loan Forgiveness Options for Health Occupation:
- California Loan forgiveness for paramedics
The purpose of this program is to increase the number of appropriately trained allied healthcare professionals and encourage them to provide direct patient care in medically underserved areas of California. If awarded, recipients agree to continue practicing full time, direct patient care at a qualified facility in California for a twelve (12) month service obligation. Applicants can be awarded up to three (3) times.
To be eligible for the Allied Healthcare Loan Repayment Program, the applicant must be currently licensed and practicing in an Allied Healthcare Profession.
For more information: https://oshpd.ca.gov/loans-scholarships-grants/loan-repayment/ahlrp/
- California Loan Forgiveness for LVN
The Health Professions Education Foundation (HPEF) improves access to healthcare in underserved areas of California by providing scholarships, loan repayments, and programs to health professional students and graduates who are dedicated to providing direct patient care in those areas. In return for this support, recipients agree to provide direct patient care in a medically underserved area of California for a period of one to three years.
For more information: https://oshpd.ca.gov/loans-scholarships-grants/loan-repayment/lvnlrp/
What about California Loan Forgiveness for Registered Nurses (RN)?
The California State Loan Repayment Program (SLRP) increases the number of primary care physicians, dentists, dental hygienists, physician assistants, nurse practitioners, certified nurse midwives, pharmacists, and mental/behavioral health providers practicing in federally designated California Health Professional Shortage Areas (HPSA).
However the only nurses that qualify for this program are: Psychiatric Nurse Specialist (PNS), Certified Nurse-Midwife (CNM), Primary Care Physician Assistant (PA), and Primary Care Nurse Practitioner (NP).
You should keep this program in mind if you plan to continue your education in nursing beyond our LVN and RN program.
There is also loan forgiveness for students pursuing a Bachelor’s of Science in Nursing, for more information please visit: https://oshpd.ca.gov/loans-scholarships-grants/loan-repayment/bsnlrp/
Contact our Financial Literacy Advising Specialist for more information on qualifying repayment plans and additional guidance on pursuing loan forgiveness or discharge. Make sure you visit the websites linked above and reach out to the various organizations offering loan forgiveness. In most cases you will need to contact your loan servicer to ensure you are on a qualifying repayment plan as well as making sure you have pursued all repayment options before pursuing discharging your loans.
Financial Literacy Advising Specialist:
Office: Student Services 103, walk-ins Welcomed!
Loan Forgiveness Videos: