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Are student loans automatically forgiven after 25 years? Well, it depends. On certain income-driven repayment plans, your student loan balance is forgiven after 25 years of on-time repayment. Other income-driven plans will let you off the hook in 20. And there are loan forgiveness programs that will cancel your debt even sooner.
If you’re wondering if student loans are automatically forgiven after 25 years, read on for the full story.
- Are student loans automatically forgiven after 25 years?
- How to get loan forgiveness sooner
- What about private student loans?
- Possible upcoming changes to student loans
Are student loans automatically forgiven after 25 years?
If you’ve got federal student loans, you could get loan forgiveness after 25 years of on-time payments on an income-driven repayment plan.
Income-driven repayment plans adjust your monthly payments as a percentage of your discretionary income. They’re a useful option if you’re struggling to afford monthly payments and need some relief.
They also extend your repayment terms to 20 or 25 years. If you still have a balance after all this time, it could be forgiven.
Here are when the four income-driven repayment plans offer loan forgiveness:
- Income-Based Repayment: 20 years if you’re a new borrower on or after July 1, 2014; 25 years if you weren’t a new borrower on or after July 1, 2014
- Pay As You Earn: 20 years
- Revised Pay As You Earn: 20 years for undergraduate loans; 25 years if you’re repaying graduate school loans
- Income-Contingent Repayment: 25 years
If you want loan forgiveness after 20 or 25 years, get your loans on an income-driven plan ASAP.
Note that even though your remaining balance will be forgiven, you’ll probably still have to pay taxes on the forgiven amount.
How to get student loan forgiveness sooner
Income-driven repayment plans aren’t the only way to get student loan forgiveness. The government offers a few loan forgiveness programs that could discharge your debt sooner.
For instance, the Public Service Loan Forgiveness program offers forgiveness after 10 years in public service and 120 qualifying payments on your student loans.
The Teacher Loan Forgiveness program offers up to $17,500 in loan forgiveness to teachers of certain subject areas in low-income schools or educational agencies who work for five consecutive years.
Plus, there are some loan forgiveness programs for doctors, nurses, and other healthcare professionals. Some states also offer student loan repayment assistance for professionals in certain careers.
Some common occupations that qualify for these assistance programs are doctor, nurse, pharmacist, lawyer, dentist, and teacher. Usually, the programs ask for a few years of service in a high-need area. Finally, the military has student loan repayment options for active duty soldiers and veterans.
To learn about all the options, head to this full list of student loan forgiveness programs.
What about private student loans?
Private student loans unfortunately aren’t eligible for income-driven repayment plans or federal loan forgiveness programs.
Some states, however, do offer student loan repayment assistance programs that can be used for federal or private student loan debt, but as mentioned, you’ll need to work a certain job to qualify.
If you have private student loans, your best bet is speaking with your loan servicer about a repayment schedule that works for you.
You could also consider refinancing for lower rates and new terms. If you can snag a lower rate, you could save money on your debt.
Plus, you can usually choose a term anywhere from five years to 20 years, depending on your goals and budget.
You’ll need to have good credit to qualify for refinancing, or apply with a cosigner who does.
Note that refinancing federal student loans turns them private and thus ineligible for federal repayment plans and forgiveness programs.
Possible upcoming changes to student loans
As you can see, student loans are only automatically forgiven after 20 or 25 years if you’re on an income-driven repayment plan and don’t fall behind on your payments.
But there could be changes in the years to come. President-Elect Joe Biden has stated his support for a number of student loan changes, including:
- Immediate forgiveness of $10,000 in federal student loans for every borrower
- Full forgiveness of federal student loans for borrowers who graduated from public colleges and make less than $125,000 per year
- Reforms to Public Service Loan Forgiveness so that the program pays out $10,000 on an annual basis for up to five years
- Simplification of the income-driven repayment options, including a rule that they automatically forgive student loans after 20 years
For more on Joe Biden and student loans, head to this guide.
Note that all these ideas are preliminary and just hint at what could possibly happen in the years to come. They’re certainly not guaranteed and would likely require bipartisan support in Congress to pass (which may or may not happen).
But it’s worth keeping in mind that federal student loan plans and programs can change over time. In the meantime, make your student loan decisions based on current options, whether you want to adjust payments on an income-driven plan, pursue a loan forgiveness program, or refinance for better rates.
Want better rates? Here are the best banks to refinance student loans:
| Variable rates start at... | Fixed rates start at... | Repayment terms | Welcome bonus | Check your rates | |
|---|---|---|---|---|---|
 | 4.54% | 4.49% | 5 - 20 years | $200 | Visit LendKey |
 | 4.99% | 4.47% | 5 - 20 years | $200 | Visit Earnest |
 | 4.22% | 3.97% | 5, 7, 10, 15, and 20 years | $120 | Visit Laurel Road |
 | 4.53% | 4.40% | 5 - 20 years | $100 or $200, depending on the amount you refinance | Visit Credible |
 | 5.09% | 4.74% | 5, 7, 10, 15, and 20 years | $100 | Visit SoFi |
 | 4.53% | 4.83% | 5, 7, 10, 15, and 20 years | $100 | Visit ELFI |