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Will New Student Loans Qualify For Forgiveness?

Written by: Jody Adams
Last updated: January 31, 2024

Student loan debt can be a significant burden on individuals, especially those who are just starting their careers. It’s estimated that, on average, students graduate with over $37,000 in student loan debt. This is staggering, and there has been a massive call for reform in student loans in recent years. 

This cry was met with several student loan forgiveness programs, including President Biden’s debt relief program. But will new student loans qualify for forgiveness? Let’s find out.

Importance Of Student Loan Forgiveness

Forgiving student loans can help individuals manage their finances and free up their resources to invest in other areas such as a home, retirement, or even starting a business. In addition, it can encourage individuals to pursue higher education without the fear of incurring massive debt. This can increase the number of students attending college, ultimately leading to a more educated and skilled workforce. 

Student loan debt disproportionately affects low-income individuals, which can lead to income inequality. Forgiving student loans can help reduce this inequality and provide more opportunities for low-income individuals to improve their economic situation. 

Additionally, it can positively impact the economy by increasing economic activity and job growth. When individuals have less debt, they are more likely to spend money on other goods and services. 

Federal Student Loan Forgiveness Programs

Federal student loan forgiveness programs are initiatives offered by the government that allows individuals to have their federal student loans forgiven or discharged under certain conditions. 

Some common examples are the Public Service Loan Forgiveness program and the Teacher Loan Forgiveness program.

There are also programs for individuals with disabilities, those who experience economic hardship, and those whose schools were defrauded. These programs can provide significant relief for individuals struggling with student loan debt.

Public Service Loan Forgiveness Program

The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on eligible Direct Loans after the borrower has made 120 qualifying monthly payments while working full-time for a qualifying public service employer.

The PSLF program is intended to encourage individuals to pursue public service careers by providing a financial incentive to do so. Eligible public service employers include government organizations, tax-exempt non-profit organizations, and other types of non-profit organizations that provide certain public services.

Note that the PSLF program can be complicated, and there have been issues with its implementation in the past. If you’re interested in this program, you must stay abreast of program requirements and changes regularly announced through the Federal Student Aid website.

Eligibility Requirements

The eligibility requirements for federal loan forgiveness programs vary depending on the specific program, but here are some common requirements:

  1. The borrower must have federal student loans: Generally, loan forgiveness programs are available only for federal student loans, such as Direct Loans, Federal Family Education Loans (FFEL), and Perkins Loans. Private student loans are not eligible for federal loan forgiveness.
  2. The borrower must work in a qualifying profession or field: Most federal loan forgiveness programs require borrowers to work in a specific profession or field to be eligible for forgiveness. 
  3. The borrower must make qualifying payments: Most federal loan forgiveness programs require borrowers to make a certain number of qualifying payments before they are eligible for forgiveness.
  4. The borrower must meet certain employment requirements: Some federal loan forgiveness programs require borrowers to meet certain employment requirements to be eligible for forgiveness.
  5. The borrower must not be in default: Borrowers who default on their federal student loans are generally not eligible for federal loan forgiveness programs. They may need to rehabilitate their loans or get them out of default before applying for forgiveness.

Application Process

The application process for federal loan forgiveness varies depending on the specific program, but it typically involves submitting an application form along with any required documentation to the loan servicer or program administrator. 

First, you need to provide information about your employment, loan balances, and payment history, among other things. Your loan servicer will review the application and determine whether you meet the eligibility requirements for forgiveness. 

If your application is approved, your loans will be forgiven or discharged, and you will no longer be responsible for making payments on those loans. 

Pros And Cons

Before pursuing a student loan forgiveness program, you should evaluate the pros and cons. 


  1. Debt relief: Borrowers who qualify for loan forgiveness may have their entire remaining loan balance forgiven or discharged, which can help alleviate financial stress and provide greater financial stability.
  2. Incentive to pursue public service careers: Federal loan forgiveness programs provide an incentive to pursue careers in public service or other qualifying professions. This can help encourage individuals to work in areas that may not be as financially rewarding but are important for the greater good.
  3. Improved credit score: Having student loans forgiven can also help improve a borrower's credit score, as it eliminates a large amount of debt and shows a positive payment history.


  1. Eligibility requirements can be strict: Many federal loan forgiveness programs have strict eligibility requirements, and it can be difficult to meet all criteria. This can lead to frustration and disappointment if a borrower cannot qualify for forgiveness.
  2. Tax implications: In most cases, forgiven loan amounts can be considered taxable income by the IRS, which means you need to pay taxes on the forgiven amount.
  3. Limited availability: Federal loan forgiveness programs are unavailable to all borrowers and may be limited in scope.

The Biden Administration's Plan For Student Loan Forgiveness

The government understands the financial burden students receive due to their student loans. The Biden Administration's plan for student loan forgiveness includes a proposal to forgive up to $10,000 in federal student loan debt per borrower (up to $20,000 if you’re also a Pell Grant recipient).

The proposal would apply to all borrowers with federal student loan debt, regardless of income or other factors. 

The plan is intended to provide relief for struggling borrowers, reduce the burden of student loan debt, and promote access to higher education. The debt relief program has started accepting applications, and there are those who’ve benefitted from the debt relief. 

However, the Courts have blocked the program, and the government is seeking to overturn those orders. To learn more and be updated on the progress, you can check their resource page

Proposed Changes To Federal Student Loan Forgiveness Programs

Several proposed changes to federal student loan forgiveness programs have been discussed in recent years. Here are a few examples:

  • Expand Public Service Loan Forgiveness to include more types of employment and shorten the required payment period
  • Automatically enroll borrowers in income-driven repayment plans
  • Repeal taxation on forgiven loan amounts
  • Expand loan forgiveness programs for low-income borrowers
  • Create new loan forgiveness programs for specific groups, such as those defrauded by for-profit colleges or those in high-need areas like healthcare or education.

It's important to note that some proposals are still being discussed and have not yet been implemented.

Worried about your taxes as a student? Check out our article about what to know about student loan on taxes to learn more.


The question of whether new student loans will qualify for forgiveness remains unanswered at this time. In addition, while there have been proposals to expand loan forgiveness programs and make college more affordable and accessible, it is uncertain whether these proposals will be enacted into law. 

For borrowers struggling with student loan debt, it is essential to explore all options for repayment and forgiveness, including income-driven repayment plans and existing loan forgiveness programs. 

As the landscape of student loan forgiveness evolves, borrowers should stay informed and seek guidance from their loan servicers or other trusted sources. Only time will tell whether new student loans will qualify for forgiveness, but for now, borrowers should focus on managing their debt and exploring all available options.

Do you think you qualify for a student loan payment refund? Learn about this topic in our blog.

Jody Adams
Jody Adams is an accomplished editor-in-chief with a deep understanding of social care and government benefits issues. With a background in journalism and a master's degree in Public Policy, Jody has spent her career shaping the narrative around social policies and their impact on society. She has worked with renowned publications, effectively bridging the gap between complex policy analysis and public understanding. Jody's editorial expertise ensures that vital information on social care and government benefits reaches a broad audience, empowering individuals to make informed decisions.
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