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For some, a path to student loan forgiveness

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Public service loan forgiveness:

Income-based repayment:

Pay as you earn plan:

Teacher loan forgiveness program:

Consumer Financial Protection Bureau's guide:

American Student Assistance's guide:

By The Associated Press
Sunday, Sept. 29, 2013, 9:00 p.m.

NEW YORK — Wish you could make your student loans disappear?

“There needs to be more awareness about these programs,” says Betsy Mayotte, director of regulatory compliance at American Student Assistance, a nonprofit that helps borrowers manage their student debt.

The organization released a loan forgiveness guide this year on its website. The Consumer Financial Protection Bureau, a government watchdog, released a guide over the summer to draw attention to programs.

The programs are not a quick fix. Instead, they enable borrowers to erase their remaining student debt after several years of payments. Most are tied to certain low-paid professions, such as teachers or public defenders, and have other restrictions. Here's a snapshot of several options.

Public service

This program is for those who work in federal, state or local government jobs, or at a nonprofit that's been designated as a 501(c)(3) tax-exempt organization. The CFPB estimates that a quarter of the country's workforce falls into those categories. Individuals must have high student loan balances relative to their income.

Anyone who makes 120 on-time monthly payments toward their student loans and works in a qualifying job for 10 years can apply to have the remaining balance forgiven. The amount of the loans forgiven is not taxed, under current tax law.

Only those with federal Direct Loans will qualify for this program, but some loans, such as the Federal Family Education Loan (known as FFEL) and the Perkins Loan can be consolidated into a Direct Loan. If you don't know what type of federal loan you have, you can find out at

The program was established in 2007, so no one has received loan forgiveness yet.

Income-based repayment

Borrowers can qualify for reduced monthly payments, and after 25 years the remaining balance is forgiven. The forgiven amount is taxed as income, which means you will likely have to pay a sum to the IRS that's lower than the amount forgiven.

The program is for those whose federal student loan debt is high relative to income and family size. Your lender will ultimately decide if you are qualified. There are other rules, such as which types of federal loans qualify.

Pay as you earn plan

Borrowers can apply to have their monthly payments reduced, and after 20 years of payments, the balance is forgiven. Any forgiven amounts are taxed as income. This program is for those with a high level of federal student loans compared to their income, and who took out their first federal student loan after Oct. 1, 2007.

Other programs

Depending on your job, you may be able to get help with your loans.

Teachers, for example, should see if they're eligible for the teacher loan forgiveness program. They must work at a qualifying school for five consecutive years to receive up to $17,500 in forgiveness on certain federal loans.

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