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College Students and Recent Grads

The 2018 Guide to Student Loan Forgiveness

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


The numbers don’t even seem to make sense. In late 2017, Americans collectively carried $1.36 trillion in outstanding student loan debt, according to the Federal Reserve Bank of New York.

Even worse, 11.2% of that debt is currently delinquent or in default. If you’re paying off student loans, you know full well what the reality behind these statistics feels like. Paying off student loans is more than just a drag. It can put you in long-term financial jeopardy if things don’t turn out like you’d hoped post-graduation.

But, there is a beacon of hope in the darkness. It might be possible for you to have your student loan balance partially or even completely forgiven. These programs aren’t necessarily easy to find or qualify for, and they don’t come without strings attached. But if you can complete a student loan forgiveness program, you just might be able to move on with your life and leave the student loans behind like a bad habit.

Whether you have private or federal student loan debt, there are various programs in place to help struggling borrowers ease their debt burden.

Part I: Student loan forgiveness options

When your student loan debt is forgiven, cancelled or discharged, you are off the hook for that amount. Some loan forgiveness programs actually do wipe away your debt like a fairy debt godmother with a magic wand. Other programs, such as Loan Repayment Assistance Programs (LRAPs) or Loan Repayment Programs (LRPs) will make additional payments toward your student loan for you, thereby reducing your balance over time.

There is no one-size-fits-all rulebook that dictates how student loan forgiveness programs work.
You may need to follow strict reporting protocols throughout the program until you become eligible for some programs, and other programs may require you to be in a certain profession or live in a certain state.

Because each program varies so much, you need to do extensive research so you know exactly what the requirements are. Some programs may have a big impact on your life, and you need to be prepared for the consequences and opportunity costs. We’ll discuss in this guide which student loan forgiveness plans are available and the main details of each program.

At a glance: Student loan forgiveness programs

Forgiveness Type

Who is eligible?

Amount that can be forgiven

Which loans are eligible?

‘Time served’ Requirement

Tax implications?

Public Service Loan Forgiveness*

People who make a commitment to a public service career.

No cap

Federal Direct loans and Federal Direct Consolidation loans. Only payments made after October 1, 2007 count toward the 120 payments needed for forgiveness.

Make 120 payments (i.e. 10 years) while working full time for any level of government or in a 501(c)(3) nonprofit.

Forgiven amount is not taxable

Teacher Loan Forgiveness

Full-time teachers working in low-income schools.

Up to $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans

Federal Direct loans, Federal Direct Consolidation and Federal Stafford loans.

Must work full time for five years.

Forgiven amount is not taxable

Perkins Loan Cancellation

Teachers and some other professionals, AmeriCorps VISTA or Peace Corps volunteers.

100% of the loan balance

Federal Perkins loans.

Must work full time for four to seven years if applying based on your occupation.

Cancelled amount is not taxable.

Forgiveness for Income-Driven Plans

Graduates who are enrolled in one of the four income-driven plans: PAYE, REPAYE, IBR, and ICR.

No cap.

Federal Direct loans, Federal Direct Consolidation loans, and Federal Direct PLUS loans made to students.

Remaining loan balance is forgiven after 20-25 years.

Forgiven amount is taxable.

Loan Forgiveness for Nurses

Nurses who work in certain high-need areas.

Up to 85% of your student loan balance.

Federal Direct loans, Federal Direct Consolidation loans, Federal Stafford loans, and Federal Direct PLUS loans made to students.

Must work full time for three years in a Critical Shortage Facility to receive forgiveness on up to 85% of your loans.

Forgiven amount is taxable. However, the NURSE Corps will pay your federal taxes for you.

Loan Forgiveness for Doctors

Doctors who make a commitment to serving in a high-need area or in the military.

Varies by program.

Varies by program.

Varies by program.

Varies by program.

Loan Forgiveness for Lawyers

Lawyers who have made a commitment to certain positions (e.g., public defenders, DOJ employees, etc.).

Varies by program.

Varies by program.

Varies by program.

Varies by program.

Military student loan forgiveness

Members of the military who have taken out student loan debt before enlisting.

Up to 100% for Army service, up to $65,000 for Navy service, or up to $65,000 for Air Force JAG service..

Federal student loans.

Varies depending on which branch you enlist in.

Forgiven amount is taxable.

Loan Forgiveness for Volunteers

AmeriCorps volunteers

Up to $11,840

Federal loans and loans issued by state agencies.

Complete at least one term of service (this ranges from 10 months to one year).

Forgiven amount is taxable.

Federal student loan repayment programs

Public Service Loan Forgiveness (PSLF)

This is one of the most popular programs. Before you get too excited though, there are a lot of hoops to jump through to apply for PSLF. Additionally, the future doesn’t look too bright for this program: The GOP is actively trying to eliminate this program. In 2017, Republicans introduced the PROSPER Act that would eliminate PSLF. Regardless of whether or not it’s passed, it is highly likely that it will be phased out at some point. Even so, current students eligible for PSLF may be grandfathered into the program, at the exclusion of new student borrowers.

Only loans issued under the Federal Direct Loan Program qualify.

You have to be up to date with your Federal Direct student loan payments and make at least 120 consecutive on-time payments.

Must have been paying on loans while working full time for the government or a 501(c)(3) nonprofit or another qualified employer. If you take a hiatus with a private-sector employer and switch back, the payments you’ve already made while previously employed still count. You also need to be enrolled in some sort of repayment plan. Luckily, income-driven repayment plans such as “Pay As You Earn” count.

If you meet all those criteria and submit an annual employment certification form, you could be eligible to have your remaining student loan balance forgiven after 120 payments (i.e., 10 years). To get that, you’ll have to fill out yet another PSLF forgiveness application form.

This means that if you’re on the default 10-year repayment plan and are able to keep up with it, you won’t really be able to take advantage of this program because you’ll already have paid off your loans after 10 years anyway.

Federal income-driven repayment plans

Income-driven repayment programs offer more than just student loan forgiveness. They’ll make your student loans more affordable in the short term as well by capping your monthly payments at 10-20% of your discretionary income, divided by 12.

The details of how the monthly income-driven payments work vary. Here, we’ll give a brief overview of how these programs work before focusing specifically on how you can get your student loan balance forgiven with each of the four plans.
Warning: With each of these federal income-driven repayment plans, any forgiven balance is considered taxable income in the year it’s forgiven. You’ll need to plan ahead accordingly.

Pay As You Earn (PAYE)

The PAYE and REPAYE programs both limit your monthly payment amount to 10% of your discretionary income and require you to certify your income and family size every year. The nitty-gritty details of who is eligible and how the PAYE and REPAYE programs work from there vary.
Here’s how you can get your student loans forgiven if you’re enrolled in these programs:

If you’re in the PAYE program, your Federal Direct or Consolidation loans will be forgiven after 20 years. If you’re in the REPAYE program, it works a bit differently: Your student loans will be forgiven after 20 years, but only if all of your loans are from undergraduate study. If you went to grad school and took out any student loans, your remaining balance would instead be forgiven after 25 years.

Income-Based Repayment (IBR)

If you’re enrolled in the IBR plan, your monthly payment amount will be limited to 15% of your discretionary income. You’ll also have to recertify your income and family size each year.

If you do those things and still have a remaining balance at the end of 25 years, regardless of what type of federal student loans you have (with the exception of Federal PLUS loans made to parents), you will be forgiven.

Income-Contingent Repayment (ICR) plan

If you’re enrolled in ICR, you’ll have the highest monthly payments of all: either 20% of your discretionary income or whatever the payment would be on a 12-year repayment plan (whichever is less). You’ll also need to recertify your income and family size with this plan as well.

ICR also has one of the longest repayment periods. If you have anything left on your student loan balance after 25 years, it’ll be forgiven.

Federal Perkins loan cancellation

Perkins loans work a bit differently the most other federal loans. Rather than being doled out through the William D. Ford Direct Loan program as with most federal student loans, each loan is made directly to you from the school itself. That means that when it comes time to apply for forgiveness, you’ll need to contact the school itself for an application.

How you qualify for Federal Perkins loan cancellation and how much you’re eligible to have cancelled depends on your profession and time served in your position.

Teachers, nurses, medical technicians, firefighters, tribal college faculty, law enforcement officers and attorneys working in public positions may be eligible to have up to 100% of their remaining Perkins loans waived after five years of service.

Certain early childhood education professionals may be eligible for Perkins loan cancellation after seven years. If you were in the military and served in a dangerous location, you may be eligible to have your remaining Perkins loan balance waived after five to 10 years, depending on when your service ended.

Finally, if you are an AmeriCorps VISTA or Peace Corps volunteer, you might be able to have 70% of the remaining balance on your Perkins loans cancelled after four years.

At a glance: Student loan cancellation or discharge programs

Forgiveness Type

Who is eligible?

Which loans are eligible?

Tax implications

Closed school discharge

People whose school closed while enrolled, or within 120 days of withdrawing from class.

Federal Direct loans, FFEL loans and Federal Perkins loans.

Forgiven amount is not taxable.

Total and permanent disability discharge

People who become “totally and permanently disabled.”

Federal Direct loans, FFEL loans and Federal Perkins loans.

Forgiven amount is taxable.

Discharge due to death

People who die, and students whose deceased parents have taken out Federal Parent PLUS loans.

Federal Direct loans, FFEL loans, Federal Perkins loans and Federal PLUS loan (including those taken out by parents).

Forgiven amount is not taxable, unless a parent with a Federal Parent PLUS loan is claiming discharge for a deceased child.

False Certification of Student Eligibility or Unauthorized Payment Discharge

People whose school falsely certified their eligibility for loans (this also includes victims of identity theft).

Federal Direct loans or FFEL loans.

Forgiven amount may or may not be taxable.

Unpaid Refund Discharge

Students who withdrew from school and whose schools did not issue a refund back to the lender.

Federal Direct loans or FFEL loans.

Forgiven amount may or may not be taxable.

Borrower Defense Discharge

Students whose schools “misled them or engaged in other misconduct.”

All Federal student loans.

Forgiven amount may or may not be taxable.

Part II: Loan forgiveness programs by profession

Teacher loan forgiveness

Teachers have a lot of options for student loan forgiveness. Aside from the Perkins loan cancellation discussed above, you may be eligible for teacher loan forgiveness for your Federal Direct and Federal Stafford loans.

Unfortunately, this loan program won’t cancel the full remainder of your balance. If you spend five years teaching full time in a low-income school, you’ll only have $5,000 of your remaining loan balance forgiven for most teachers.

If you’re a math, science, or special education teacher, the deal is sweetened even more: You’ll have up to $17,500 of your student loan balance forgiven.

Teacher loan forgiveness might not fully cancel out your loans, but you may have another option: public service loan forgiveness.

As a teacher, you’re also eligible for this program. Sadly, you can’t use the same period of service to qualify for both programs simultaneously. That means you’ll need to teach for five years in a low-income school to qualify for the teacher loan forgiveness program, and then restart the clock for another 10 years to qualify for PSLF (it doesn’t have to be at a low-income school, however).

You may also be eligible for other student loan forgiveness or assistance programs depending on where you live. To find out more, check out the American Federation of Teachers online loan forgiveness database.

Loan forgiveness for nurses

One of the most well-established student loan forgiveness programs for nurses is the NURSE Corps loan repayment program. If you agree to work in a facility with a critical nurse shortage, you can have up to 85% of your student loan balance paid off for you after three years.

Even better, the program will pay your federal taxes automatically for you so you don’t have to worry about the dreaded student loan forgiveness tax bombs (although you may be on the hook for state taxes). To earn these student loan payments, you first need to apply and be accepted into the program.

There are also many state loan repayment programs for nurses. To see if your state has one, simply do a Google search for “your state + nurse student loan forgiveness.”

Check out the full guide to nurse loan forgiveness programs here.

Loan forgiveness for doctors

There are numerous state-specific student loan repayment plans for doctors. The Association of American Medical Colleges maintains an excellent database of state-run programs.

Here are some others to consider:

IHS: If you agree to work in an IHS (Indian Health Service) facility for at least two years, this agency will agree to pay $40,000 toward your student loans. You can also agree to extend your employment beyond the two-year mark to earn even more student loan repayments, with no maximum cap. In other words, you could have your entire student loan balance paid off with this program if you stick around long enough. Another nice benefit of this program is that the IHS will pay 20% of the income taxes that result from their payments (you’re still on the hook for the other 80%, and any other income tax, however).

Military doctors: There are several military-specific programs for doctors and dentists in particular. The Navy’s Health Professions Loan Repayment Program will pay up to $40,000 per year (minus about 25% for taxes) toward your student loans if you agree to enlist in a certain skill shortage area. The Army offers a smattering of student loan repayment programs offering up to $250,000 for a wide range of doctor specialties and higher-level medical personnel.

National Health Service Corps: Doctors and dentists who haven’t yet completed their final year of school may be eligible for the National Health Service Corps Students to Service Loan Repayment Program. In exchange for agreeing to provide health care in an NHSC-approved facility in need for at least three years, the NHSC will pay off up to $120,000 of your federal and private student loans. Even better, the S2S award is not considered taxable income.

Repayment assistance for other healthcare professionals

Doctors, nurses and other licensed professionals, such as social workers, counselors and midwives may be eligible for up to $50,000 in student loan forgiveness under the National Health Service Corps (NHSC) Loan Repayment Program.

To qualify, you need to submit an application to be accepted into the program and agree to work at least two years in an NHSC-approved medically underserved location. This program is also tax-free.

The NHSC also grants money to certain states to run their own health care student loan repayment program. To see if your state participates and how the program works, visit their website.

If you are involved in medical or veterinary research, you may also qualify for up to $35,000 per year in student loan forgiveness through the National Institute of Health (NIH) Loan Repayment Program. There are currently eight different repayment programs available (the details of which vary), and you will have to enroll in an LRP in advance.

Loan forgiveness for lawyers

Student loan forgiveness programs for lawyers are also equally piecemeal. One of the most popular programs is run by the Department of Justice for its employees.

If you’re able to commit to a three-year term and have at least $10,000 in federal student loan debt, you can apply to this program. Applications are only accepted once per year by a certain due date. Once accepted into the program, the DOJ will match your student loan payments of up $6,000 per year toward your student loans, for a maximum of $60,000. This is also considered taxable income, although the DOJ will withhold a part of the money to pay your extra income taxes for you.

If you’re a public defender or a state prosecutor, you may also be eligible for the John R. Justice Student Loan Repayment Program. If you agree to remain in your position for at least three years, this program will help you pay back $10,000 in federal student loans per year, up to a maximum of $60,000. This program is run through state agencies. To learn more, you can find your state’s agency here.

There are also numerous student loan assistance programs for lawyers run by state agencies. To find these programs, simply Google “your state + lawyer student loan assistance program.” Your school may also offer a loan repayment program; to find out, check out the Equal Justice Works directory.

Military student loan forgiveness

In addition to the student loan forgiveness programs available to military members and veterans under other umbrellas (such as the Perkins loan cancellation or PSLF), many branches of the military offer loan repayment programs (LRPs) as enlistment incentives.

Army: The Army offers LRPs for regular Army, Army Reserve, and Army National Guard soldiers. The details of these programs vary depending on your current job status, but in general, these programs all require a few common things to earn payment toward your federal loans. First, you need to get your LRP guaranteed in writing in your enlistment contract (very important!), decline G.I. Bill benefits, be a high school graduate with a minimum 50 score on your ASVAB test and agree to enlist in a critical MOS (military occupational specialty) for a certain period of time. If you meet these qualifications, you could have up to 100% of your federal student loan balance forgiven.

Navy: If you’re more seaward-oriented, the Navy offers a single LRP for incoming sailors. If eligible for this program, the Navy will pay up to $65,000 toward your student loans and your income tax liability (a nice perk!). This program is currently only offered to sailors with certain eligibility ratings as they are going through the enrollment process.

Air Force: The Air Force also offers an LRP, but it’s much less comprehensive than the Army and the Navy’s LRP and only applies to those with a legal bent. You can apply for up to $65,000 in student loan repayment assistance by joining the Air Force’s JAG Corps. You become eligible for this award after serving for at least one year as a JAG officer.

Student loan forgiveness for volunteers

AmeriCorps volunteers are eligible for the Segal AmeriCorps Education Award after they’ve completed at least one term of service. The amount of the award is pegged to the value of the Federal Pell Grant each year (currently $5,920 in 2017), and volunteers can’t earn more than two full-time awards (even if they serve more than two full-time terms).

The forgiven amount is also considered taxable income, so plan accordingly.

Part III: Learn more

It can be tough to sort out the requirements for a student loan forgiveness program, assuming that you qualify for one. You may even have to commit to making a life-changing decision by accepting a job in a location you otherwise wouldn’t have chosen, or by taking a lower salary while in public service, for example.

Which student loan forgiveness program is right for you?

Making a decision based on these factors isn’t easy. You will have to do a lot of research and reading of the fine print to understand whether a particular student loan forgiveness program will work for you or not. Look for a fee-only Certified Financial Planner who specifically specializes in student loan forgiveness. Believe it or not, CFPs do not receive student loan training as part of the requirements to pass the CFP exam, so you should really interview several planners beforehand to test their knowledge.

Then there’s the uncertainty of whether these programs will even be around in the future, given the current political environment. Mark Kantrowitz, a nationally-recognized student loan expert, believes it’s very likely that the popular Public Service Loan Forgiveness program will eventually be phased out, for example.

If you’re currently deciding whether or not to take a job based on being eligible for a federal student loan forgiveness program, take heart.

“In general, when there is a change in federal law, existing borrowers tend to be grandfathered in,” said Kantrowitz. There are no promises, of course, but you may be a bit safer if you start a student loan forgiveness program now rather than waiting.

Pitfalls of student loan forgiveness

One of the biggest disadvantages of student loan forgiveness programs is that in many cases, the forgiven amount is considered taxable income. This means you could owe taxes on the forgiven amount just as if you’d been cut a check.

For example, if you have $25,000 worth of student loan debt forgiven and you’re in the 22% tax bracket (earning between $38,700 and $82,500 for a single person in 2018), that means you’ll get a whopping tax bill at the end of the year for $5,500.

“You're substituting a tax debt for education debt,” said Kantrowitz, even if the tax debt is lower.
If you absolutely cannot pay the tax bill, however, Kantrowitz says all hope is not lost. “The IRS, in many cases, is actually quite reasonable. They realize that you can't squeeze blood from a stone.”

You may be able to negotiate a lower lump-sum payment, or may even have the debt discharged if you’re financially insolvent (which the IRS defines as having a net worth of $0 or less).

Becoming financially insolvent as a way to escape your tax bill is never a good idea, so you need to plan ahead for the outrageous tax bill. Again, this is another good time to consult with a fee-only Certified Financial Planner.

Alternatives to student loan forgiveness

If you don’t qualify for one of these student loan forgiveness programs, there may be two last cards you can play.

1. Your employer

“About four percent of employers now offer student loan repayment assistance, or LRAP programs, for their employees,” said Kantrowitz. PricewaterhouseCoopers and Fidelity have established programs, for example.

Finding a private-sector employer who offers an LRAP may be your best bet if you don’t qualify for forgiveness under another program.

2. Make your own de facto student loan forgiveness program

How? Simply make extra payments toward your student loans on your own.

This is especially important to consider when evaluating job offers. Let’s say one company pays less but offers an LRAP. The other company pays way more, but maybe doesn’t offer an LRAP. Tally up the value of the program: You very might well be able to get out of debt faster with the higher-earning job by making extra payments yourself, rather than relying on a potential employer’s LRAP.

Student loan forgiveness and repayment programs can help unshackle you from a mountain of debt. But, you don’t have to wait for the ability or permission from someone else to start paying your loans off early yourself.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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College Students and Recent Grads

Loan Forgiveness for Nurses: Who’s Eligible and How to Apply

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

student loan forgiveness for nurses

While nurses may carry a large burden in terms of patient care, they typically receive good pay, solid workplace perks and plenty of job security in return. Afterall, job openings for registered nurses are expected to increase 15% from 2016 to 2026, according to the U.S. Bureau of Labor Statistics — at a time when the average growth for all jobs is projected to be just 7%. Further, registered nurses reported median wages of $68,450 nationwide in 2016, with the top 10% of nurses earning $102,990.

On the downside, the costs of earning a nursing degree can be overwhelming.

An October 2017 report from the American Association of Colleges of Nursing even noted that 69% of nursing graduate students surveyed took out federal loans to finance their education, and the median amount of debt brought on by graduate school was anticipated to be $40,000 to $54,999 for these students.

If you’re considering a nursing degree or a graduate nursing degree, it’s easy to see why these numbers would be disconcerting. The good news is there are a wide range of forgiveness programs available for nurses on both the state and federal levels.

If you’re struggling with expensive nursing school loans or fear you will be, it may help to become familiar with these programs and how to qualify.

Federal student loan forgiveness for nurses

National Health Service Corps Repayment Program

The National Health Service Corps Repayment Program offers up to $50,000 in student loan repayment in exchange for a two-year commitment at a NHSC-approved work site. Accepted sites may be in primary care medical, dental or mental and behavioral health clinics in high-need areas of the country.

According to the program website, priority consideration is given to eligible applicants whose approved work site has an HPSA (Health Professional Shortage Area) score of 26 to 14, in descending order. In other words, student loan forgiveness goes to those who work in the highest-need facilities first. You can look for eligible job sites in your area on this page.

Are you eligible?

If you’re a licensed health care provider who is willing to work or even relocate to an area with a shortage of qualified health care providers for at least two years, you are eligible to apply for this program.

The application process

While the 2017 application cycle is closed, the next application cycle will open in early 2018. To apply, you’ll need to submit a complete application that includes documentation of your loans and proof of qualified employment. You can find a full application checklist on the NHSC website.

Is this program right for you?

This program could be ideal for you if you’re flexible in terms of where you work for the next two years and you have up to $50,000 in student loans to repay.

NURSE Corps Loan Repayment Program

This federal program aims to help registered nurses, advanced practice registered nurses and nurse faculty by paying off up to 85% of their student loan debt in exchange for a 2- to 3-year commitment in a critical shortage position or facility. This program is available to nurses in the three mentioned professions who graduated from an accredited nursing school and work full time in either an eligible critical shortage facility or an accredited school of nursing.

Are you eligible?

To be eligible for this program, you must work as a registered nurse, advanced practice nurse or as nurse faculty and be a U.S. citizen. You need a bachelor’s degree or associate degree in nursing from an accredited school, and you must work full time (at least 32 hours per week) in an approved critical shortage facility (CSF) or accredited school. You must also have outstanding loans related to your nursing degree.

The application process
The 2018 application cycle hasn’t opened yet, although you can sign up to be notified when it does. NURSE Corps suggests reading the Application and Program Guidance document ahead of time so you fully understand the commitment. This document also offers a list of critical shortage facilities and facility types that would qualify for this program.

Is this program right for you?

This program is ideal for nurses who are willing to commit to working in a critical shortage position for at least two years.

Federal Perkins Loan Cancellation for Nurses

If you have Federal Perkins loans and work full time in the nursing profession, you may be able to have up to 100 percent of your student loans wiped away with the Federal Perkins Loan Cancellation program.

Nurses need to be registered and employed full-time to qualify. They also need to be willing to make a five-year commitment to the program. However, since the Perkins Loan program expired on September 30th, 2017, you must have borrowed money for nursing education before that date to qualify.

Are you eligible?

Nurses with Federal Perkins loans who are willing to make a five-year commitment to the program may have up to 100% of their loans forgiven. Unfortunately, you must have borrowed before September 30, 2017 to qualify.

The application process

According to the U.S. Department of Education, you must apply for Federal Perkins loan forgiveness with the school who made your loan or with the school’s Perkins Loan servicer. Your school or servicer will provide forms and instructions on how to move forward with the process, they note.

Is this program right for you?

This program is ideal for nurses who graduated with Perkins Loans before September 30, 2017. Unfortunately, it won’t be of any help to future generations of nurses – at least for the time being.

Programs for nurses by state

While the federal government supports several national programs that can help nurses shed their expensive student loan debt, some states offer their own programs as well. These programs vary in length and commitment, but most require at least a few years of work in a critical shortage area of nursing in exchange for forgiveness.

The following chart highlights the current programs available, what they offer and who is eligible:


Program name

Description of program


Advanced Practice Nursing Loan Repayment Program

Alabama residents enrolled full time in accredited nursing education programs and pursuing graduate degrees to become certified registered nurse practitioners (CRNPs), certified nurse midwives (CNMs), or certified registered nurse anesthetists (CRNAs) are eligible to receive $12,000 in loan repayment. Graduates must be an Alabama resident for at least one year before they apply.


Alaska’s SHARP Program

Through Alaska’s SHARP (Support-for-Service to Healthcare Practitioners) Program, nurses can receive up to $27,000 per year in loan assistance in exchange for a work commitment in an eligible critical shortage area.


Arizona Loan Repayment Program

The Arizona Loan Repayment Program offers loan assistance for health care professionals working in areas of critical shortage. Available to nurse practitioners who work half-time or full time for at least two years, this program offers up to $50,000 in repayment assistance for each year of service in a qualified position.


Bachelor of Science Nursing Loan Repayment Program

Registered nurses in California who hold a bachelor’s degree may qualify for this program if they have outstanding student loan debt and agree to serve in a medical shortage area, a prison, or a veteran’s facility. Up to $10,000 is awarded for one year of service.


Colorado Health Service Corps Program

Colorado nurse practitioners, nurse midwives, and psychiatric nurse specialists may receive up to $25,000 for part-time work and $50,000 for full-time work in exchange for a three-year commitment in a Colorado Health Professional Shortage Area.


Nursing Education Loan Repayment Program

Connecticut registered nurses and nursing students may be eligible to have up to 60% of their student loans forgiven in exchange for a two-year, full-time commitment at an eligible Department of Mental Health and Addiction Services Facility. A third year of commitment may result in an additional 25 percent of loan forgiveness.


Delaware State Loan Repayment Program

Delaware nurse practitioners, nurse midwives, and psychiatric nurse specialists who work full time in a designated critical shortage area may receive between $30,000 and $100,000 in loan repayment assistance in exchange for a two-year commitment.


Nursing Student Loan Forgiveness Program

Florida licensed practical nurses, registered nurses and advanced practice registered nurses who work full time in a designated critical shortage site may receive up to $4,000 per year in loan forgiveness for up to four years.


Advanced Practice Registered Nurse Loan Repayment Program

This program, which is available to advanced practice registered nurses in the state of Georgia, offers up to $10,000 per year in loan cancellation in exchange for full-time work in a rural Georgia county.


The Hawaii State Loan Repayment Program

Nurse practitioners and certified nurse midwives licensed to work in Hawaii are eligible for loan forgiveness after committing to at least two years of full-time work in a healthcare shortage area in the state. Award amounts vary based on grants available.


Idaho State Loan Repayment Program

Healthcare practitioners in the state of Idaho can qualify for $2,500 - $25,000 per year in loan forgiveness for working in a critical shortage area designated by the state.


Nurse Educator Loan Repayment Program

Licensed nurse educators in the state of Illinois may be awarded up to $5,000 in loan forgiveness for up to four years provided they work as a nurse educator and meet the licensing requirements of the Illinois Department of Financial and Professional Regulation.


Iowa Registered Nurse and Nurse Educator Loan Forgiveness Program

Registered nurses and nurse educators who owe a balance on their student loans and have loans in good standing may earn up to $6,858 per year in loan forgiveness for no more than five consecutive years.


Kansas State Loan Repayment Program

Certified nurse practitioners may qualify for up to $20,000 per year in assistance for two years and $5,000 - $15,000 per year in assistance for the next three consecutive years. Full-time work in a designated healthcare shortage facility is required for each year of forgiveness.


Kentucky State Loan Repayment Program

Kentucky nurse practitioners, certified nurse midwives and registered nurses can receive $20,000 - $40,000 in loan repayment assistance depending on their designation. A two-year commitment in a critical shortage area in the state of Kentucky is required.


Louisiana State Loan Repayment Program

Certified nurse practitioners and certified nurse midwives can qualify for up to $15,000 per year in loan repayment assistance for up to three years. A full-time commitment in a designated healthcare shortage area is required.


Janet L. Hoffman Loan Assistance Repayment Program

Nurses who provide public service in Maryland or local government or nonprofit agencies in Maryland can receive between $1,500 and $10,000 per year in loan assistance depending on their total debt. A full-time commitment in an underserved facility in the state is required.


Michigan State Loan Repayment Program

Nurse practitioners who work full time in a not-for-profit facility with a critical shortage of qualified caregivers may receive up to $200,000 in loan repayment assistance with a commitment of up to eight years.


Minnesota Nurse Loan Forgiveness Program

Licensed practical nurses and registered nurses can receive $5,000 per year in loan repayment assistance with a two-year minimum service obligation in a qualified facility.


Montana NHSC Student Loan Repayment Program

Nurse practitioners, primary care registered nurses, certified nurse midwives, and a variety of other healthcare professionals can receive up to $15,000 per year in loan repayment for up to two years in exchange for full-time work in an NHSC-approved site.


Nebraska Loan Repayment Program for Rural Health Professionals

Nurse practitioners who agree to work in a critical shortage facility for three years can receive up to $30,000 per year in loan assistance to repay commercial or government student loans.

New Hampshire

New Hampshire State Loan Repayment Program

Primary care nurse practitioners, certified nurse midwives, and psychiatric nurse specialists can receive $45,000 in loan repayment assistance in exchange for a three-year commitment in a critical shortage facility. Candidates who want to extend the program up to another two years may also receive another $20,000 in assistance.

New Jersey

Primary Care Practitioner Loan Repayment Program of New Jersey

Certified nurse practitioners and certified nurse midwives can receive up to $120,000 in loan repayment assistance over a four-year period of service in an underserved facility with a critical shortage of healthcare providers.

New Mexico

Health Professional Loan Repayment Program

In exchange for a two-year commitment in a designated medical shortage area in New Mexico, advanced practice nurses can qualify for up to $25,000 per year in assistance.

New York

New York State Nursing Faculty Loan Forgiveness (NFLF) Incentive Program

Registered nurses or advanced practice nurses with graduate degrees who teach nursing in the state of New York can receive up to $8,000 per year in loan forgiveness for up to five years through this program.


Nurse Education Assistance Loan Program (NEALP)

This program was created to incentivize Ohio students in accredited nursing programs to continue their studies. Awards of up to $1,500 per year are offered and students need to be enrolled in programs with at least half-time study to qualify.


Oregon Partnership State Loan Repayment

Registered nurses and primary care nurse practitioners can qualify for loan repayment assistance in exchange for a two-year commitment in a health care shortage area. Awards vary based on the shortage level of the facility of employment and funds available.


Pennsylvania Primary Health Care Loan Repayment Program

Certified registered nurse practitioners can receive up to $60,000 in loan repayment assistance for a two-year commitment in a facility with high need.

Rhode Island

Health Professionals Loan Repayment Program

Rhode Island nurse practitioners and registered nurses can receive loan repayment assistance in exchange for a two-year or four-year commitment in a high-need or critical shortage area. Loan amounts vary.


Graduate Nursing Loan Forgiveness Program

Nurses who are enrolled in a nursing graduate program may be eligible for loan forgiveness. Nursing students must work full time as a nurse educator for at least four years to qualify.


Rural Communities Healthcare Investment Program

Texas healthcare professionals other than physicians can receive up to $10,000 in loan repayment assistance after working one year in a designated shortage area in the state.


Educational Loan Repayment for Health Care Professionals

Licensed practical nurses and registered nurses in Vermont can receive an annual award of up to $10,000 for working at least 20 hours per week in an underserved area as defined by the program.


Virginia State Loan Repayment Program

Nurse practitioners, nurse midwives and registered nurses working in designated shortage facilities in Virginia can receive up to $140,000 (not to exceed their total loan balances) for a minimum four-year commitment.


Health Professional Loan Repayment Program

Nurses who agree to a three-year commitment in an eligible healthcare shortage site can receive up to $75,000 in loan repayment assistance. A minimum 24-hour work week is required for this program.

West Virginia

West Virginia State Loan Repayment Program

Nurse practitioners and nurse midwives who agree to a two-year commitment in a facility with a healthcare shortage can receive $40,000 in loan repayment. An additional $25,000 per year in assistance is available for an additional two years of work.


Health Professions Loan Assistance Program

Nurse practitioners and certified nurse midwives can receive up to $50,000 in loan repayment assistance through this program. Eligible providers must work at least three years in a qualified high need facility to qualify.

Alternatives to student loan forgiveness for nurses

If federal or state nurse loan forgiveness isn’t suitable for your situation for any reason, there are several alternative ways to get your student loans reduced or forgiven. Here are some of the main options to consider:

Hospital tuition reimbursement

Some hospitals offer tuition reimbursement to working nurses and nursing students who work in their hospital or hospital system. While some of these programs offer tuition assistance as an ongoing perk for existing employees, others offer loan repayment as an incentive to earn an advanced nursing degree.

The UNC Medical Center in Chapel Hill, N.C., for example, offers tuition assistance for permanent working nurses who dedicate at least 20 hours per week to working at one of their facilities. With this program, hospital employees can attend nursing school or nursing graduate school and receive $316.99 per undergraduate credit hour or $589.62 per graduate credit hour. Limits per class are set at $1,870.24 for undergraduate courses and $3,478.76 for graduate-level courses, at a maximum of 20 credit hours per fiscal year.

Duke University Hospital in Durham, N.C., is another institution that offers tuition reimbursement for nurses. This program promises up to 90% tuition reimbursement for nurses who pursue a master’s degree, post-master’s degree certificate or doctorate of nursing practice degree. Nurses must work for the Duke University Hospital system full time (at least 30 hours per week) with a positive record to qualify.

If you’re interested in pursuing tuition assistance, check hospitals in your area to see which ones, if any, offer this type of program.

Student loan refinancing

Another way to reduce the ongoing costs of excessive student debt is to refinance your student loans with a private lender who may offer a lower interest rate or better loan terms. This strategy won’t make your loans go away altogether, but it may help you save on short-term and long-term interest costs or lower your monthly payment.

While this strategy can be advantageous, keep in mind that it doesn’t always make sense to refinance your student loans. If another lender won’t grant you a lower interest rate or lower your payment, for example, it may be hard to justify the hassle or expense of refinancing.

Not only that, but refinancing federal loans with a private lender can result in losing access to important federal benefits like deferment, forbearance and income-driven repayment plans.
Before you refinance your student loans, make sure to use a student loan refinancing calculator to see how much you might save. Only then can you decide if it would be worth it.

Income-driven repayment options

Income-driven repayment plans allow nurses with federal loans to pay only a percentage of their income toward their loans for 20-25 years. These programs can be especially advantageous for nurses with large debt loads and low incomes since your monthly payment is determined based on how much you earn and a percentage of your discretionary income. Not only that, but each of these plans leads to forgiveness of your remaining student loans once you make payments for the duration of the program.

Several different income-driven repayment programs are available for nurses:

Program name

Payment Amount

Repayment Period


Pay As You Earn Repayment Plan (PAYE Plan)

10% of your discretionary income but never more than your payment on 10-year Standard Repayment

20 years

Nurses can qualify if their payment on this plan would be less than the payment on a standard ten-year repayment plan

Revised Pay As You Earn Repayment Plan (REPAYE Plan)

10% of your discretionary income

20 years for undergraduate loans and 25 years “if any loans you’re repaying under the plan were received for graduate or professional study”

Nurses with federal student loans can qualify

Income-Based Repayment (IBR)

10% of your discretionary income if your loan originated after July 1, 2014, but never more than the 10-year Standard Repayment Plan; generally 15% of your discretionary income if you’re not a new borrower on or after July 1, 2014; either way, you’ll never pay more than the payment on a standard, 10-year repayment plan

20 years if you’re a borrower after on or after July 1, 2014; otherwise 25 years

To qualify, your payment under this plan must be less than what you would pay under standard, 10-year repayment

Income-Contingent Repayment (ICR)

20% of your discretionary income, or what you would pay over the course of a fixed 12-year repayment plan

25 years

Nurses with federal student loans qualify

Public Service Loan Forgiveness (PSLF)

The Trump administration has made it no secret that they’d favor ending the Public Service Loan Forgiveness (PSLF) program, which forgives the balance on your remaining Direct Loans provided you make 120 consecutive, on-time payments and work full time for a qualifying employer.

But so long as this program is still available, it’s worth checking out.

According to the education department, “qualified employment” can entail working for a government agency, a not-for-profit or serving full time in Americorps or the Peace Corp. Candidates must work full time (at least 30 hours per week) to qualify, and only Direct Loans are eligible for PSLF.

Since nurses can find work in not-for-profit organizations, the Peace Corp and government agencies, this is typically seen as a feasible loan repayment option for nurses and other healthcare professionals.

Holly Johnson
Holly Johnson |

Holly Johnson is a writer at MagnifyMoney. You can email Holly here


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College Students and Recent Grads, Pay Down My Debt

7 Best Options to Refinance Student Loans – Get Your Lowest Rate

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Updated: January 1, 2018

Are you tired of paying a high interest rate on your student loan debt? You may be looking for ways to refinance your student loans at a lower interest rate, but don’t know where to turn. We have created the most complete list of lenders currently willing to refinance student loan debt. We recommend you start here and check rates from the top 7 national lenders offering the best student loan refinance products. All of these lenders (except Discover) also allow you to check your rate without impacting your score (using a soft credit pull), and offer the best rates of 2018:

LenderTransparency ScoreMax TermFixed APRVariable APRMax Loan Amount 



3.25% - 7.25%

Fixed Rate*

2.58% - 6.82%

Variable Rate*

No Max

Max Loan
Learn more Secured



3.25% - 6.32%

Fixed Rate

2.57% - 5.87%

Variable Rate

No Max

Max Loan
Learn more Secured
commonbond A+



3.18% - 7.25%

Fixed Rate

2.57% - 7.07%

Variable Rate

No Max

Max Loan
Learn more Secured
lendkey A+



3.15% - 7.82%

Fixed Rate

2.90% - 6.64%

Variable Rate

$125k / $175k

Max Loan
Learn more Secured



3.50% - 6.99%

Fixed Rate

2.99% - 6.42%

Variable Rate

No Max

Max Loan
Learn more Secured



3.35% - 8.24%

Fixed Rate

3.11% - 8.46%

Variable Rate

$90k / $350k

Undergraduate /
Learn more Secured




Fixed Rate


Variable Rate


Undergraduate /
Learn more Secured

You should always shop around for the best rate. Don’t worry about the impact on your credit score of applying to multiple lenders: so long as you complete all of your applications within 14 days, it will only count as one inquiry on your credit score.

We have also created:

But before you refinance, read on to see if you are ready to refinance your student loans.

Can I Get Approved?

Loan approval rules vary by lender. However, all of the lenders will want:

  • Proof that you can afford your payments. That means you have a job with income that is sufficient to cover your student loans and all of your other expenses.
  • Proof that you are a responsible borrower, with a demonstrated record of on-time payments. For some lenders, that means that they use the traditional FICO, requiring a good score. For other lenders, they may just have some basic rules, like no missed payments, or a certain number of on-time payments required to prove that you are responsible.

LenderMinimum credit scoreEligible degreesEligible loansAnnual income

Good or Excellent
score needed

& Graduate

Private, Federal,
& Parent PLUS



(or signed job offer)
Learn more Secured


& Graduate

Private, Federal,
& Parent PLUS



(or signed job offer)
Learn more Secured


& Graduate

Private, Federal,
& Parent PLUS



(or signed job offer)
Learn more Secured


& Graduate

Private & Federal



Learn more Secured

Not published

& Graduate

Private, Federal,
& Parent PLUS



(or signed job offer)
Learn more Secured


& Graduate

Private, Federal,
& Parent PLUS



Learn more Secured

Not published

& Graduate

Private & Federal



Learn more Secured

If you are in financial difficulty and can’t afford your monthly payments, a refinance is not the solution. Instead, you should look at options to avoid a default on student loan debt.

This is particularly important if you have Federal loans.

Don’t refinance Federal loans unless you are very comfortable with your ability to repay. Think hard about the chances you won’t be able to make payments for a few months. Once you refinance, you may lose flexible Federal payment options that can help you if you genuinely can’t afford the payments you have today. Check the Federal loan repayment estimator to make sure you see all the Federal options you have right now.

If you can afford your monthly payment, but you have been a sloppy payer, then you will likely need to demonstrate responsibility before applying for a refinance.

But, if you can afford your current monthly payment and have been responsible with those payments, then a refinance could be possible and help you pay the debt off sooner.

Is It Worth It?

Like any form of debt, your goal with a student loan should be to pay as low an interest rate as possible. Other than a mortgage, you will likely never have a debt as large as your student loan.

If you are able to reduce the interest rate by refinancing, then you should consider the transaction. However, make sure you include the following in any decision:

Is there an origination fee?

Many lenders have no fee, which is great news. If there is an origination fee, you need to make sure that it is worth paying. If you plan on paying off your loan very quickly, then you may not want to pay a fee. But, if you are going to be paying your loan for a long time, a fee may be worth paying.

Is the interest rate fixed or variable?

Variable interest rates will almost always be lower than fixed interest rates. But there is a reason: you end up taking all of the interest rate risk. We are currently at all-time low interest rates. So, we know that interest rates will go up, we just don’t know when.

This is a judgment call. Just remember, when rates go up, so do your payments. And, in a higher rate environment, you will not be able to refinance to a better option (because all rates will be going up).

We typically recommend fixing the rate as much as possible, unless you know that you can pay off your debt during a short time period. If you think it will take you 20 years to pay off your loan, you don’t want to bet on the next 20 years of interest rates. But, if you think you will pay it off in five years, you may want to take the bet. Some providers with variable rates will cap them, which can help temper some of the risk.

Diving Deeper: The Best Places to Consider a Refinance

If you go to other sites they may claim to compare several student loan offers in one step. Just beware that they might only show you deals that pay them a referral fee, so you could miss out on lenders ready to give you better terms. Below is what we believe is the most comprehensive list of current student loan refinancing lenders.

You should take the time to shop around. FICO says there is little to no impact on your credit score for rate shopping as many providers as you’d like in a single shopping period (which can be between 14-30 days, depending upon the version of FICO). So set aside a day and apply to as many as you feel comfortable with to get a sense of who is ready to give you the best terms.

Here are more details on the 7 lenders offering the lowest interest rates:

1. SoFi: Variable Rates from 2.58% and Fixed Rates from 3.25% (with AutoPay)*


SoFi (read our full SoFi review) was one of the first lenders to start offering student loan refinancing products. More MagnifyMoney readers have chosen SoFi than any other lender. Although SoFi initially targeted a very select group of universities (it started with Stanford), now almost anyone can apply, including if you graduated from a trade school. The only requirement is that you graduated from a Title IV school. You need to have a degree, a good job and good income in order to qualify. SoFi wants to be more than just a lender. If you lose your job, SoFi will help you find a new one. If you need a mortgage for a first home, they are there to help. And, surprisingly, they also want to get you a date. SoFi is famous for hosting parties for customers across the country, and creating a dating app to match borrowers with each other.

GO TO SITE Secured

on SoFi’s secure website

2. Earnest: Variable Rates from 2.57% and Fixed Rates from 3.25% (with AutoPay)


Earnest (read our full Earnest review) offers fixed interest rates starting at 3.25% and variable rates starting at 2.57%. Unlike any of the other lenders, you can switch between fixed and variable rates throughout the life of your loan. You can do that one time every six months until the loan is paid off. That means you can take advantage of the low variable interest rates now, and then lock in a higher fixed rate later. You can choose your own monthly payment, based upon what you can afford (to the penny). Earnest also offers bi-weekly payments and “skip a payment” if you run into difficulty.

GO TO SITE Secured

on Earnest’s secure website

3. CommonBond: Variable Rates from 2.57% and Fixed Rates from 3.18% (with AutoPay)


CommonBond (read our full review) started out lending exclusively to graduate students. They initially targeted doctors with more than $100,000 of debt. Over time, CommonBond has expanded and now offers student loan refinancing options to graduates of almost any university (graduate and undergraduate). In addition (and we think this is pretty cool), CommonBond will fund the education of someone in need in an emerging market for every loan that closes. So not only will you save money, but someone in need will get access to an education.

GO TO SITE Secured

on CommonBond’s secure website

4. LendKey: Variable Rates from 2.90% and Fixed Rates from 3.15% (with AutoPay)


LendKey (read our full LendKey review) works with community banks and credit unions across the country. Although you apply with LendKey, your loan will be with a community bank. If you like the idea of working with a credit union or community bank, LendKey could be a great option. Over the past year, LendKey has become increasingly competitive on pricing, and frequently has a better rate than some of the more famous marketplace lenders.

GO TO SITE Secured

on Lendkey’s secure website

5. Laurel Road: Variable Rates from 2.99% and Fixed Rates from 3.50% (with AutoPay)

Laurel Road

Laurel Road is a division of Darien Rowayton Bank that offers a highly competitive product when it comes to student loan refinancing. As a lender, Laurel Road prides itself on offering personalized service while leveraging technology to make the student loan refinancing process a quick and simple one. Consider checking out their low-rate student loan refinancing product, which is offered in all 50 states.

GO TO SITE Secured

on Laurel Road’s secure website

6. Citizens Bank: Variable Rates from 3.11% and Fixed Rates from 3.35% (with AutoPay)

Citizens Bank

Citizens Bank offers student loan refinancing for both private and federal loans through its Education Refinance Loan. The Education Refinance Loan is a good one to consider, especially if you are looking to stick with a traditional banking option. Consider looking into the competitive rates that Citizens Bank has to offer.

GO TO SITE Secured

on Citizens Bank’s secure website

7. Discover Student Loans: Variable Rates from 4.12% and Fixed Rates from 5.24% (with AutoPay)

Discover Student Loans

Discover, with an array of competitive financial products, offers student loan refinancing for both private and federal loans through their private consolidation loan product. If you’re looking for a well-established bank to refinance your student loans, Discover may be the way to go. Just keep in mind that if you apply for a student loan refinance with Discover, they will do a hard pull on your credit.

GO TO SITE Secured

on Discover Bank’s secure website

Additional Student Loan Refinance Companies

In addition to the Top 7, there are many more lenders offering to refinance student loans. Below is a listing of all providers we have found so far. This list includes credit unions that may have limited membership. We will continue to update this list as we find more lenders:

Traditional Banks

  • First Republic Eagle Gold. The interest rates are great, but this option is not for everyone. Fixed rates range from 1.95% – 2.95% APR. You need to visit a branch and open a checking account (which has a $3,500 minimum balance to avoid fees). Branches are located in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland (Oregon), Boston, Palm Beach (Florida), Greenwich or New York City. Loans must be $60,000 – $300,000. First Republic wants to recruit their future high net worth clients with this product.
  • Wells Fargo: As a traditional lender, Wells Fargo will look at credit score and debt burden. They offer both fixed and variable loans, with variable rates starting at 4.49% and fixed rates starting at 5.24%. You would likely get much lower interest rates from some of the new Silicon Valley lenders or the credit unions.

Credit Unions

  • Alliant Credit Union: Anyone can join this credit union. Interest rates start as low as 4.50% APR. You can borrow up to $100,000 for up to 25 years.
  • Eastman Credit Union: Credit union membership is restricted (see eligibility here). Fixed rates start at 6.50% and go up to 8% APR.
  • Navy Federal Credit Union: This credit union offers limited membership. For men and women who serve (or have served), the credit union can offer excellent rates and specialized underwriting. Variable interest rates start at 3.55% and fixed rates start at 4.00%.
  • Thrivent: Partnered with Thrivent Federal Credit Union, Thrivent Student Loan Resources offers variable rates starting at 3.25% APR and fixed rates starting at 3.74% APR. It is important to note that in order to qualify for refinancing through Thrivent, you must be a member of the Thrivent Federal Credit Union. If not already a member, borrowers can apply for membership during the student refinance application process.
  • UW Credit Union: This credit union has limited membership (you can find out who can join here, but you had better be in Wisconsin). You can borrow from $5,000 to $150,000 and rates start as low as 3.04% (variable) and 3.99% APR (fixed).

Online Lending Institutions

  • Education Loan Finance:This is a student loan refinancing option that is offered through SouthEast Bank. They have competitive rates with variable rates ranging from 2.69% - 6.01% APR and fixed rates ranging from 3.09% - 6.69% APR. Education Loan Finance also offers a "Fast Track Bonus", so if you accept your offer within 30 days of your application date, you can earn $100 bonus cash.
  • EdVest: This company is the non-profit student loan program of the state of New Hampshire which has become available more broadly. Rates are very competitive, ranging from 4.29% – 7.89% (fixed) and 3.50% – 7.10% APR (variable).
  • IHelp : This service will find a community bank. Unfortunately, these community banks don’t have the best interest rates. Fixed rates range from 4.75% to 9.00% APR (for loans up to 15 years). If you want to get a loan from a community bank or credit union, we recommend trying LendKey instead.
  • Purefy: Purefy lenders offer variable rates ranging from 3.11%-6.93% APR and fixed interest rates ranging from 3.35% – 8.24% APR. You can borrow up to $150,000 for up to 15 years. Just answer a few questions on their site, and you can get an indication of the rate.
  • RISLA: Just like New Hampshire, the state of Rhode Island wants to help you save. You can get fixed rates starting as low as 3.49%. And you do not need to have lived or studied in Rhode Island to benefit.

You can also compare all of these loan options in one chart with our comparison tool. It lists the rates, loan amounts, and kinds of loans each lender is willing to refinance. You can also email us with any questions at

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at

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Advertiser Disclosure

Best of, College Students and Recent Grads, Credit Cards

Best Student Credit Cards January 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Getting a credit card while you’re in college might seem dangerous or confusing. But if you are able to use a student credit card responsibly, you do not need to be afraid, and you can set yourself up for financial success after you leave school.

Fortunately, learning how to choose and use the right student credit card is relatively simple. Make sure you avoid annual fees and go with a bank or credit union you can trust. When you get the card, make sure you use it responsibly and pay the balance in full and on time every month. If you do these things consistently over time, you can leave school with an excellent credit score. And if you want to rent an apartment or buy a car, having a good credit score is very important.

Our Top Pick

Discover it® for Students


on Discover Bank’s secure website

Rates & Fees

Read Full Review

Discover it® for Students

Annual fee
Cashback Rate
up to 5% on certain categories, 1% on everything else
Regular Purchase APR


Credit required

Best for Commuter Students

Bank of America® Cash Rewards credit card for Students


on Bank Of America’s secure website

Bank of America® Cash Rewards credit card for Students

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
1% cash back on every purchase, 2% at grocery stores and wholesale clubs, and 3% on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter
Regular Purchase APR


Credit required

Average OK

Best Flat-Rate Card

Journey® Student Rewards from Capital One®


on Capital One’s secure website

Read Full Review

Journey® Student Rewards from Capital One®

Annual fee
Cashback Rate
Earn 1% cash back on all your purchases. Pay on time to boost your cash back to a total of 1.25% for that month.
Regular Purchase APR


Credit required

Best Intro Bonus

Wells Fargo Cash Back College℠ Card

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
up to 3%
Regular Purchase APR


Credit required
Fair Credit

Best Credit Union Card

Altra Federal Credit Union Student Visa


on Altra’s secure website

Read Full Review

Altra Federal Credit Union Student Visa

Annual fee
$0 For First Year
$0 Ongoing
1 point per dollar spent
Regular Purchase APR


Credit required
New to Credit

Best for Studying Abroad

Bank of America® Travel Rewards credit card for Students


on Bank Of America’s secure website

Bank of America® Travel Rewards credit card for Students

Annual fee
$0 For First Year
$0 Ongoing
1.5 points per dollar spent
Regular Purchase APR


Credit required
Fair Credit, Limited Credit history

Best Secured Card

Discover it® Secured Card - No Annual Fee


on Discover Bank’s secure website

Rates & Fees

Read Full Review

Discover it® Secured Card - No Annual Fee

Annual fee
Minimum Deposit
Regular Purchase APR


Credit required

Best for No Credit History

Deserve Edu Mastercard


on Deserve’s secure website

Deserve Edu Mastercard

Annual fee
$0 For First Year
$0 Ongoing
Cashback Rate
1% on all purchases
Regular Purchase APR


Credit required
New to Credit

Also ConsiderAlso Consider

Golden 1 Platinum Rewards for Students

Golden 1 Credit Union Platinum Rewards for Students:

This credit card offers a snazzy rewards program: rather than accumulate points, you’ll get a cash rebate instead. All you have to do is make a purchase. At the end of the month, you’ll get a rebate of 3% of gas, grocery, and restaurant purchases, and 1% of all other purchases deposited back into your Golden 1 savings account at the end of the month. You can join Golden 1 by joining the Financial Fitness Association for $8 per year and keeping at least $5 in a savings account.

What should I look for in a student credit card?

The most important thing to consider when looking for a student credit card is that it charges no annual fee. You should never have to pay to build your credit score. Fortunately, most student cards don’t charge you an annual fee, but it’s still something to watch out for.

The second most important thing you should keep an eye out for are tools that help you learn about credit or even promote good credit-building habits. For example, some student credit cards will give you a free monthly FICO score update. You can use this freebie to see in real time how your credit score changes as you build credit history by keeping the card open, or paying down your credit card balance, for example.

The last thing you should be considering when picking out a student credit card is the rewards program. I know, I know, it seems counterintuitive. But stick with me — I’ll show you why in the next question.

Why shouldn’t I be concerned about maximizing my rewards while in college?

Rewards cards are nice to have. But if you’re a college student, here’s the truth: you probably won’t spend enough to earn meaningful rewards.

Why? With a good rewards program, you can earn points or cash back. A small percentage of your monthly spending can add up quickly. However, given the tight budget that most college students live on, it will probably take a while to earn meaningful rewards. For example, if you earn 1.25% cash back and spend $300 a month on your card, you would earn $45 of cash back during the year.

College students are very good at making good use of $45. And our favorite card offers a great cash back rewards program. Just don’t expect to earn a lot of cash back, given the tight budget of a college student.

Why should I get a credit card as a college student?

There are a lot of great reasons why you should get a credit card, as long as you can commit to using it responsibly.

The single biggest reason why you should get a credit card as a college student is because you can start establishing a credit history now. When you graduate from college, you will need a good credit score to get an apartment. And your future employer will likely check your credit report. Building a good credit history while still in college will help prepare you for life after graduation.

Getting a credit card while in college can also train you to develop good credit habits now. But you need to be honest with yourself. If you find that you can’t avoid the temptation of maxing out your credit card, you might want to switch to a debit card or cash.

Finally, getting a credit card now can be the motivation you need to start learning about credit. These skills aren’t hard to learn, and they could save you thousands or even hundreds of thousands of dollars later in life (when you want a mortgage, for example).

What is the CARD Act and why should I care about it?

Many years ago, credit card companies would market on college campuses. You could get a free beer mug or t-shirt in exchange for a credit card application. And you would be able to qualify for a credit card without having any income. The Credit Card Accountability Responsibility and Disclosure (CARD) Act was signed into law in May 2009 to change a number of practices.

How did the CARD Act change student credit cards?

The CARD Act made a lot of changes in how credit card issuers do business with students. One of the biggest changes was requiring students to be able to demonstrate an ability to pay. If you are under 21 and do not have sufficient income (a campus job, for example), you would need to get a co-signer.

In addition, colleges must now limit the amount of credit card marketing on campus. The days of free t-shirts and pizzas in exchange for credit card applications are gone. But that doesn’t mean it is impossible for a college student to get a credit card. Some highly reputable banks and credit unions still offer student cards. And building a good credit score while still in college is still highly recommended.

How can I protect myself from racking up debt?

When used properly, credit cards are a very convenient method of repayment. However, when not used properly, you can end up deep in credit card debt. It is important to establish a healthy relationship to credit now, with your first credit card.

You should try to ensure that you pay off your credit card bill in full and on time every month. Ideally, you should set up an automatic monthly payment. And to keep yourself on track, take advantage of alerts offered by most credit card companies. You can even get daily text messages reminding you of your balance.

How can I automate my credit card usage?

If all of this sounds confusing, don’t worry. There’s actually a way you can automate your payments so you never even have to bother with the hassle of using a credit card. All it takes is a few minutes of upfront work.

First, you’ll need at least one recurring monthly bill of the same amount, such as Netflix or Spotify. Log in to your account and set up an automatic payment each month using your credit card. Make a note of how much your monthly bill costs.

Next, log in to your bank account. Set up a second automatic payment to go to your credit card each month for the same amount as the bill. If your bank doesn’t offer the option to set up automatic payments, you may also be able to set up your credit card to automatically withdraw the amount of the bill from your bank.

Because you know this bill will be for the same amount each month (barring any price increases), you can literally just leave this running in the background each month on autopilot. You don’t even have to carry your credit card in your wallet if you don’t want to. Then, when you graduate, you’ll automatically have an improved credit score!

What happens to my student credit card when I graduate?

Congratulations! You’ve made it to the finish line. But what about your student credit card? You will have a few options once you graduate.

First, you can simply keep it. You will want to keep the credit card open, because it helps you build a long credit history. However, you might want to call your credit card company and ask if you can migrate to a standard (non-student) credit card.

But if you have been using your credit card properly, you will have an excellent credit score when you graduate – and you will be able to get any credit card that you want.

Here is a summary of our favorite cards:

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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College Students and Recent Grads, Reviews

Discover Student Loans: In-Depth Review

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

college-grad (1)

Have you exhausted all your options with federal student aid, and still need extra help covering the costs of college? Applying for a private student loan may be your next step.

Keep in mind private student loans don’t offer many of the benefits federal student loans do. Interest rates are often higher, and repayment assistance isn’t always available. That’s why it’s recommended you fill out a FAFSA and submit it first – you’ll want to claim any grants and scholarships available to you before turning to private student loans, as grants and scholarships don’t have to be paid back.

Discover is one of many private lenders that offers undergraduate student loans, so if you need more money to cover tuition, here’s what you need to know about Discover’s offers.

What does Discover offer undergraduates?

Undergraduate Student Loan

Fixed APR range


Variable APR range


Loan terms offered

15 years after deferment period



Loan amount

A minimum of $1,000 up to the entire school-certified cost of attendance after financial aid. Aggregate loan limits apply.

Repayment plans

  1. You can pay a fixed monthly payment of $25 while in school or during grace period

  2. You can defer payments until 6 months after graduation, or when you’re enrolled less than half-time

  3. And you can also make additional payments while in school to reduce your costs by the time your regular monthly payments come due.

Discover also offers some repayment options for borrowers experiencing financial difficulties. It recommends borrowers call the Repayment Assistance Department at 1-800-STUDENT to talk about options such as deferment, early repayment assistance program, payment extension, reduced payment, forbearance or hardship.

Cosigner release

None for loans originated by Discover. Cosigner release for previous CitiAssist Loan purchased by Discover is available. You must be at least 18, a U.S. citizen or permanent resident, and meet the repayment, credit history and income requirements.

Savings opportunities

  1. Reduce your rate by 0.25% if you opt into automatic payments during repayment period.

  2. Get a one-time cash reward of 1% of your student loan amount (for loan applications submitted on or after May 1, 2014) if you maintain a 3.0 GPA or equivalent.

As of Jan. 8, 2018

Discover’s undergraduate student loan claims to be a “zero fee loan” as there are no application, origination or late fees associated with it. On top of that, you can apply to cover 100 percent of your cost of attendance (the minimum loan amount is $1,000).

Discover lists out its eligibility requirements on its website:

  • You need to be enrolled at least half time in a bachelor’s or associate degree program, be working toward a degree and make satisfactory academic progress, as your school defines it.
  • You can be a U.S. citizen, permanent resident, or international student, though international students need a cosigner who is a U.S. citizen or permanent resident.
  • You must be at least 16 years old to apply.
  • You need to pass a credit check.

If you don’t have an extensive credit history, Discover encourages you to apply with an eligible cosigner. This may increase your chances of being approved for a loan with more favorable terms and rates. Be aware there’s no cosigner release with a Discover student loan – the cosigner is on the loan for the entire duration.

What can Discover offer to graduate students?

Discover offers loans for various graduate programs with zero fees (meaning no origination, application or late fees). The company offers loans with a $1,000 minimum and a 20-year repayment period. Like the undergraduate loans, you may also be eligible for savings opportunities, as well as the ability to add a cosigner onto your loan.

All graduate and professional school loans have similar repayment plan options:

  1. You can either make a $25 monthly payment while in school and throughout grace period, or
  2. You can defer your payments until nine months after graduation or when you’re enrolled as a half-time student (or less).

After that, you’ll be required to make monthly payments as dictated by your loan term, amount and interest rate.

You can also make additional payments while in school to bring down your loan balance before you start making regular monthly payments. On its website, Discover says it offers help to borrowers experiencing financial difficulty. You can call the Repayment Assistance Department at 1-800-STUDENT to learn more about options such as deferment, early repayment assistance program, payment extension, reduced payment, forbearance and hardship.

All Discover student loans have the same policy on cosigner releases: There is no cosigner release option for loans originated by Discover, but cosigner release for previous CitiAssist Loans purchased by Discover is available. You may be eligible if you are at least 18, a U.S. citizen or permanent resident, and meet the repayment, credit history and income requirements.

Here are the different graduate and professional school loans available from Discover, as of Dec. 4, 2017:

Graduate loans

Discover’s graduate student loans are for those who are enrolled in a qualifying graduate program (master's or doctorate) at least half-time and are pursuing a degree in an eligible school. You’ll need your school to prove that you’re making satisfactory academic progress. U.S. citizens, permanent residents or international students need to be a minimum of 16 years of age when applying and meet the requirements during a credit check. You can choose to apply by yourself or with a cosigner, unless you’re an international student. In that case, you’ll need a cosigner who is either a U.S. citizen or permanent resident.

Once approved, the funds will be disbursed through the school. If you can maintain a 3.0 GPA or equivalent, you’re eligible for a one-time cash reward of 1% of your loan amount. You’ll need to redeem your cash within 6 months after the academic term for your loan is finished.

Graduate Loans

Fixed APR range


Variable APR range


Loan terms offered

20 years after deferment period



Loan amount

From $1,000 up to 100% of school-certified costs after financial aid. Aggregate loan limits as set by Discover applies and varies depend on the program.

Savings opportunities

Opting into automatic payments gets your rate reduced by 0.25%.

If you maintain a 3.0 GPA (or equivalent), get a 1% one-time cash reward of your loan amount.

MBA loans

MBA loans are for students who are pursuing a degree at a qualifying business school, either for an MBA or a related graduate program. It’s the same requirements to qualify for this loan as Discover’s graduate student loan offering, and the loan amount will be disbursed through your school. You’re eligible for the one-time cash reward of you maintain a 3.0 GPA or equivalent. Check Discover’s Rewards for Good Rates page to find out your GPA eligibility.

MBA Loans

Fixed APR range


Variable APR range


Loan terms offered

20 years after deferment period



Loan amount

From $1,000 up to 100% of school-certified costs after financial aid. Aggregate loan limits as set by Discover applies.

Savings opportunities

Opting into automatic payments can get your rate reduced by 0.25%.

If you maintain a 3.0 GPA (or equivalent), get a 1% one-time cash reward of your loan amount.

Health profession loans

This type of loan is for those who are pursuing programs in allopathy, dentistry, nursing, occupational therapy, optometry, osteopathy, pharmacy, physical therapy, physician assistant, podiatry and veterinary medicine. You’ll need to be pursuing a degree in an eligible school that offers these programs.

To qualify for the health profession loan, you’ll need to meet the same requirements as the MBA or graduate loans. You may also qualify for the one-time 1% cash reward if you can maintain a 3.0 GPA or equivalent. Once approved, the funds will be distributed through to your school.

Health Profession Loans

Fixed APR range


Variable APR range


Loan terms offered

20 years after deferment period



Loan amount

From $1,000 up to 100% of school-certified costs after financial aid. Aggregate loan limits as set by Discover applies.

Savings opportunities

Opting into automatic payments can get your rate reduced by 0.25%.

If you maintain a 3.0 GPA (or equivalent), get a 1% one-time cash reward of your loan amount.

Law school loans

The law school loan is for graduate students who are currently enrolled in a qualifying law school. You’ll need to show that you’re doing well in school at be at least 16 years or older to qualify for a loan. Getting approved for a loan is the same process as the above loan types. As well, loan amounts are given to your school.

Law School Loans

Fixed APR range


Variable APR range


Loan terms offered

20 years after deferment period



Loan amount

From $1,000 up to 100% of school-certified costs after financial aid. Aggregate loan limits as set by Discover applies.

Savings opportunities

Opting into automatic payments can get your rate reduced by 0.25%.

If you maintain a 3.0 GPA (or equivalent), get a 1% one-time cash reward of your loan amount.

Residency loans

Discover’s residency loans are meant to help residency candidates in medical school cover the cost of internship, residence, board exam reviews and relocation. To qualify, you’ll need to be enrolled at least half-time in a qualifying health-profession graduate program and making satisfactory progress. You may also qualify if you have recently graduated from medical school within the last 12 months. You need to pass a credit check and be a U.S. citizen or permanent resident. International students may apply but they’ll need a U.S. citizen or permanent resident cosigner.

Once your loan is approved, the money will be given to you via electronic deposit or a check. Unlike the other graduate loan programs, there is no 1% cash back reward but you can get an interest rate deduction if you enroll in auto pay.

Residency Loans

Fixed APR range


Variable APR range


Loan terms offered

20 years after deferment period



Loan amount

$1,000-$18,000 for the allopathy, dentistry, optometry, osteopathy, pharmacy, podiatry and veterinary medicine fields

$1,000-$5,000 for the nursing, occupational therapy, physical therapy and physician assistant fields. Aggregate loan limits as set by Discover applies.

Savings opportunities

Opting into automatic payments may reduce your rate by 0.25%.

Bar exam loans

The bar exam loan is for students who are considered candidates for the bar exam. It’s meant to help you cover the cost of living expenses and bar exam prep class while you’re studying for the exam. To qualify, you’ll need to have graduated from law school in the last 6 months or be enrolled at least half-time in your final year in a law degree graduate program. In addition, you’ll need to be a U.S. citizen or permanent resident (international students will require a cosigner) and meet satisfactory credit requirements.

The funds for the loan will be given you via electronic transfer to your bank or a check. You can get a 0.25% rate reduction if you participate in auto pay.

Bar Exam Loans

Fixed APR range


Variable APR range


Loan terms offered

20 years after deferment period



Loan amount

$1,000-$16,000. Aggregate loan limits as set by Discover applies.

Savings opportunities

Opting in automatic payments get your rate reduced by 0.25%

How do Discover student loans compare?

Discover student loans are fairly competitive when compared to other top student loan companies. Their rates and repayments are comparable to other large financial institutions. However, Discover falls short when compared to cosigner releases, rates compared to credit unions and loan amounts.

Where Discover stands out:

  • No fees: There are no application, origination, or late fees, whereas some other big banks do.
  • Unique rewards program: Get rewarded for good grades by getting a one-time 1% cash reward for qualifying loans. Other places only offer auto-pay discounts.
  • Competitive rates: Discover’s fixed rates are in par or lower to its competitors.

Where Discover student loans fall short:

  • No cosigner release option: Only a certain type of loan purchased by Discover is eligible for cosigner release. Otherwise, you cannot release your cosigner from a Discover student loan (unless you refinance). Other banks and credit unions offer cosigner release if the borrower has met certain requirements such as a satisfactory credit history and on-time payments.
  • High variable rates: Discover’s variable rates are considerably higher compared to other financial institutions.
  • Longer terms: Competitors offer shorter terms whereas Discover’s are anywhere from 15 to 20 after the grace period has ended.

The application process

Discover says its application takes about 15 minutes to fill out online. Before applying, have the following information ready to enter:

  • Your school’s information
  • Your field of study and the academic term for which you’re applying
  • Social Security number
  • Loan amount requested
  • Amount of financial aid you’ve already received
  • If applicable, financial information such as salary and rent/mortgage payments
  • Your address (permanent and where you’ll reside once at school)

Discover makes the application process simple. You can select the state your school is in, and a list of schools in that state will populate. Choose your school from the list or search for it.
You’ll then be asked to enter all your personal information and any other details Discover needs.

If any additional documentation is requested, you can upload it online. By submitting your application, a hard inquiry of your credit will be conducted. The same is true if a cosigner applies with you.

Funds will be disbursed according to your school’s financial aid office deadlines.

Repayment assistance options

Discover has multiple options for you in case you experience financial hardship while paying back your loans. Federal student loans come with certain benefits such as deferment and forbearance, so you don’t need to make monthly payments during a period of financial difficulty. Private lenders aren’t required to offer these benefits, but some lenders do. Keep in mind they’re not guaranteed and can be taken away in the future.

While it may seem like paying your student loans off is years away, it helps to know what your options are as they vary among private lenders. You should take this into consideration when shopping around for private student loans.

Discover offers a range of solutions like deferment, payment extension, forbearance and reduced payments. Take a look at what each entails and what it takes to qualify here.

Refinancing student loans with Discover

Discover offers loan consolidation to help you lower your interest rate and simplify your loan payments. If you cannot get a cosigner release, refinancing your student loan allows you to do so by paying off your existing loans. You can choose to consolidate some or all of them with a minimum of $5,000 up to $150,000 upon credit approval.

Like their student loan options, there are no application, origination or early payment fees. If you are able to make additional payments, you can pay off your loan sooner and save on the cost of your loan. You can consolidate while enrolled in school, during your grace period or after it expires. Once you qualify, your first payment is due anywhere from 30-45 days after the loan is disbursed.

However, Discover’s student consolidation rates are higher compared to its competitors, even with the auto pay discount. Also, the repayment period is anywhere from 10 to 20 years depending on your creditworthiness, which is longer than other places that offers terms as short as 5 years. If you have a cosigner for your refinance loan, you cannot release them, unlike some other banks.

To qualify, you’ll need to be a U.S. citizen or permanent resident, be the primary borrower for loans you’re planning on consolidating, have a good repayment history and prove you have sufficient income to handle your payments. Discover also requires its borrowers to have no more than $150,000 in aggregate student loan debt, including federal student loans, though depending on your field of study you may be eligible for higher limits.


on Discover Bank’s secure website

Who benefits the most from a Discover student loan?

Overall, students who have applied for federal aid and have received the maximum amount they’re qualified for, but still need additional assistance to fund their college tuition, may benefit from Discover’s student loan. Its rates are somewhat comparable to federal loans as long as you or a cosigner have excellent credit, and it offers great repayment assistance options along with a few bonuses that don’t come with federal loans.

Consider all options

While Discover has a decent student loan program to offer borrowers, it’s far from the only option out there. You may be able to get better rates and terms with another private lender. It’s a good idea to shop around to see the different loans you’re eligible for. Some credit scoring models will count multiple applications for student loans as a single inquiry, as long as they’re made within a short period of time (generally between 14 and 45 days, depending on the score). By shopping around, you’ll be able to choose the best loan offer and may not see much impact on your credit score.

Also, remember to compare APRs and not just interest rates – other lenders may charge late, origination and application fees that need to be factored into the cost of the loan. Check to see what repayment options are available, and any other “bonuses” lenders may be offering.

The fine print

There really isn’t any. There are no prepayment penalties, and no origination, late or application fees associated with the loan. Still, make sure you take the time to read your loan agreement before signing it.

A word of warning on choosing a variable interest rate, though – while variable rates are lower and look more attractive, keep in mind the rate may change at any time. That means your loan may become more expensive.

No one can predict where the market will go, so rates may stay low, or they may skyrocket in the future. A fixed interest rate can provide valuable peace of mind, even if you have to pay for it.

Erin Millard contributed to this story.
This post has been updated. It was originally published Sept. 1, 2015.

Sarah Li Cain
Sarah Li Cain |

Sarah Li Cain is a writer at MagnifyMoney. You can email Sarah Li here


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College Students and Recent Grads, News

5 Signs You’re Probably Going to Default on Your Student Loans

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

A newly released New York Federal Reserve analysis sheds some insight on factors that may determine if student loan borrowers are more or less likely to default on their loans.

According to Fed data, 28% of students who left college between 2010 and 2011 defaulted on their student loans within five years. That’s significantly higher than the students who left school five years earlier, between 2005 and 2006, of which only 19% defaulted within five years.

Defaulting on a student loan is big deal. Not only will someone who defaults on a student loan need to deal with collections calls, but a default can seriously harm a borrower's credit rating, making it difficult to qualify for a personal loan or other large credit purchases like a new home.

The New York Fed’s analysis highlights factors that could determine default rates years after students leave school. They range from things a student can't necessarily control —  family background and how selective the college they attended was — to things students may have a little more control over, like the degree and major they pursue.

The data show students in these categories are more likely to default on their student loans between ages 20-33:

  1. Dropped out before earning a degree.
  2. Enrolled in an associate's degree program.
  3. Majored in arts and humanities.
  4. Attended a for-profit institution, community college or nonselective college.
  5. Came from a low-income family.

A few of the factors relate to things a student has some control over, like the kind of school chosen and the degree pursued. Another big factor, family background, depends more heavily on chance.

Here’s what the Fed found about how the factors influence default rates.

The school

For-profit, public, or nonprofit?

If a student attended a private for-profit two-year institution, their chances of default were highest of all — just above 3% were in default at age 22, shooting up to 42% by age 33. Students at private four-year for-profits weren’t far behind, with a default rate of

38.8% by age 33.

On the other hand, students were much less likely to struggle to repay their student loans at nonprofit institutions, both public and private. Private nonprofit four-year student had the lowest default rate at 17.2%. They were followed by students who attended public nonprofit four-year institutions.

Source: FBNY

Selective vs. nonselective

The Fed’s analysis found students who attended colleges that were more selective or competitive defaulted at lower rates that those who attended less-selective colleges. The analysis used Barron’s Profile of American Colleges to classify colleges into selective and nonselective based on competitiveness.

The degree

Graduate versus dropout

Whether or not a borrower graduated was the second-strongest predictor of default among borrowers, according to the Fed analysis. Overall, students who dropped out had higher rates of default versus borrowers who graduated no matter what kind of degree they attempted. The analysis notes that may be attributed to the fact graduates are more likely to find more gainful employment that would give them the ability to pay off their loans after earning a degree.

Source: FBNY

Associate versus bachelor’s degree

No matter what kind of college a graduate attended, students in a two-year degree programs had higher default rates than their peers who enrolled in a four-year college, according to the New York Fed analysis.

But the gap between default rates of two-year and four-year students was widest among students who attended public schools — 21.4% to 36.5%, respectively— a difference of more than 15 percentage points

STEM versus arts and humanities

Students who majored in arts and humanities defaulted on their loans at the highest rates — 26.3% at nonselective schools, 14.6% at selective schools— while STEM majors at selective schools (12%) and business students at selective schools (11.5%) defaulted at the lowest rates.  Overall, default rates among students who majored in business or a vocational programs were closer to STEM students than to arts and humanities majors.

Arts and humanities majors defaulted at higher rates regardless of the college's selectivity, but if students majored in STEM, business or a vocational program, selectivity may have factored in more. By age 33, the default gap between students who chose a best-performing major and a worst-performing major was three percentage points at selective colleges, while at nonselective schools the gap was eight percentage points.

Source: FBNY

The student

Advantaged vs nonadvantaged

The Fed’s analysis took a look into defaulters’ income and family background, too. The analysis looked at the average income for the ZIP code area at a borrower’s youngest available age based on available loan data. The analysis defined students who came from households earning below the mean income based on ZIP code as nonadvantaged, and students from households earning above the mean income.

The analysis found borrowers who came from less-advantaged backgrounds based on income had higher default rates no matter what type of college they attended.

Taking both a borrower’s background and college into consideration, the widest gap in default rates observed in the analysis were among advantaged students who attended private nonprofit colleges (13% of whom defaulted by age 33) and nonadvantaged students who attended private for profit colleges (42.1% of whom defaulted by age 33).

Source: FBNY

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at


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Best of, College Students and Recent Grads, Personal Loans

Top 6 Personal Loans & Student Loans for Career Development

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Personal Loans & Student Loans

Updated November 03, 2017
A few years after graduating college you may find yourself in a weird spot. You don’t want to go back to school for another degree in the traditional sense, but you want to pursue certification in an area like coding or UX design to give your resume a boost. Or maybe you want to get formal training in an entirely new field through intensive boot camp programs.

Fortunately, there are options outside of “going back to school” that give us the opportunity to continue learning without committing to an entirely new degree. You can also find funding to help ease the burden of paying completely out-of-pocket for career development.

Check out a few of these loan options:

1. SoFi

Fixed rates starting from 5.49% APR

When considering loans for career development, SoFi should be a loan at the top of your list because of its customer service and loan perks. The application is completely online and once approved funds are wired to your account. It also doesn’t hurt your credit score to see if you’re pre-approved and your rate.

SoFi offers fixed and variable interest loans. You can borrow $5,000 to $100,000. Loan terms are 3 - 7 years. There are no origination fees or prepayment penalties.

One feature of a SoFi loan that makes it stand apart from other loans is the unemployment protection. If you lose your job, there are resources like career coaching to help you find another position. You can also get payments postponed temporarily during your job search.



on SoFi’s secure website

2. Earnest

Fixed rates starting from 5.25% APR

Earnest offers personal loans for multiple uses including career development. You can borrow from $2,000 to $50,000. Loan terms are 1, 2 and 3 years long with no hidden fees or prepayment penalties. Earnest does a hard pull to determine if you’re approved, so your credit score will be affected.

The loan application process is online as well and you’ll receive a response about your loan application within 2 to 3 business days. Earnest reviews many variables outside of just your credit score to qualify you for a loan. So, if your credit score is impacting the rate you get with other lenders, Earnest is worth checking out.

Earnest will take into account your savings, earning potential, education and your history of on-time payments to find you the best rate. Currently, this loan is not offered in Nevada, Idaho, Louisiana, Mississippi, Alabama, Kentucky, Iowa, Vermont, Montana, North Dakota or South Dakota. Although, plans are in motion to open up lending to these states.

3. Upstart

Rates starting from 9.56% APR

Upstart offers $1,000 to $50,000 in personal loans for courses or boot camps to further your career. Loan terms of 3 and 5 years are available. One negative of Upstart is it does have an origination fee of 3.655% to 8%. Similar to SoFi, Upstart does a soft pull of your credit report to determine if you’re pre-approved.

Upstart will accept borrowers with a credit score of 640 and above. If you have a limited credit history you may still be able to qualify. Similar to Earnest, Upstart reviews your credit score among other factors like your education, area of study and job history to determine if you're eligible for a loan.

Once approved for an Upstart loan, you can agree to terms and get your money within a few days.

4. LightStream

Fixed rates starting from 5.99% APR

LightStream has loans from $5,000 to $100,000. Loan terms range from 2 to 7 years. There are no fees or prepayment penalties, but it will be a hard pull on your credit report to see if you’re pre-approved. One positive of LightStream is it’s very clear with how it determines interest rates.

You’ll get the most competitive rates with excellent credit. Since the term “excellent” can be subjective, LightStream outlines what’s considered excellent credit based on a profile of past excellent borrowers. These borrowers tend to have:

  • 5 or more years of credit history
  • A mix of credit accounts like various credit cards, auto loans and mortgages
  • Excellent payment history with no delinquencies
  • Proven ability to save
  • Stable income

Now, one important thing to mention, you can’t use a LightStream loan for college or postsecondary education. If you want to take out this loan for career development, contact customer service to double check that whatever course you plan to take is eligible for the loan.

5. Wells Fargo

Variable rates starting from 4.49% APR

Wells Fargo has a unique opportunity for students pursuing career training or non-traditional school education. This could be a good option if you’re looking to further your career in the form of certificates and licensing from a university.

There are no application, origination or repayment fees. Wells Fargo offers variable and fixed interest options. Rates include somes discount. You can get a 0.25% discount if you have a previous Wells Fargo student loan or another qualifying account. There's another 0.25% discount if you set up automatic payment.

You can take out up to $20,000 depending on the type of training you’re getting and from what school you’re getting it from. No payment on the loan is required until 6 months after you leave school, but interest will accrue during any deferment.

Wells Fargo does allow cosigners and cosigner release. Cosigners can be removed from the loan after 24 consecutive, on-time payments are made and you meet other credit requirements.

6.Sallie Mae

Variable rates starting from 3.25% APR

Sallie Mae has a program relatively similar to the Wells Fargo career-training program. Sallie Mae will fund up to 100% of the cost to attend school for training.

Both fixed and variable rate loans are available. There are no prepayment penalty or disbursement fees. You can apply with a cosigner and your cosigner can be released after you make 12 on-time payments, pass a credit review and meet other criteria.

Prepayment begins 6 months after you’re finished with classes. One perk of the Sallie Mae loan is while taking classes you have the option to pay interest or you can pay a fixed $25 per month to reduce your repayment schedule in the future.

How to decide

The world we live in today is constantly evolving, so naturally our skills will have to evolve as we move forward in our careers. Before choosing a personal loan or student loan for career development, get a good sense of your end goal.

Do you want to simply learn a new skill or do you want to gain a new credential (i.e. certification) from a university for your resume? Deciding your end game will help you choose the loan product that’s best for you.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor at


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College Students and Recent Grads

What Is the NSLDS? A Tool to Keep Track of Student Loans

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


Over the course of a college career, a student may take out multiple education loans of different amounts and term lengths. Loans are often granted on an annual basis, and by the time you graduate, it’s easy to lose track of your total borrowing.

What’s more, holders of federal loans get a short reprieve from repayment after graduation — up to six or nine months, depending on the loan time — making it can be easy to forget that you’ve got money due. It’s smart to use that grace period to begin planning for repayment, rather than viewing it as a vacation from thinking about your college loans.

One of the best ways to keep track of your federal student loans and payments is through the National Student Loan Data System, a centralized database for federal student loan and grant information managed by the U.S. Department of Education. By checking in regularly on the NSLDS, you can stay on top of how much you owe, the repayment terms of your loans and the monthly payment amounts.

For new graduates making a budget — sometimes for the first time — this student loan information can help them understand how much money they need to set aside for monthly payments, or if they need to look into alternative loan repayment programs.

“It’s a helpful tool, and so often as humans, we’re inclined to denial or procrastination,” says Melinda Opperman, executive vice president with, a nonprofit organization focused on personal finance education. “By ignoring that tool, you could have a problem compounding. See what’s in there, and get yourself anchored and prepared.”

What’s the purpose of the National Student Loan Data System (NSLDS)?

The NSLDS was authorized as part of the 1986 Higher Education Act (HEA) Amendments and is administered by the Office of Federal Student Aid. It was formed with three purposes:

  • To better the quality of student aid data and its accessibility
  • To decrease the administrative work required for Title IV Aid
  • To decrease fraud and abuse of student aid programs

The NSLDS initially focused on federal loan compliance but eventually expanded to encompass detailed data from federal student loan and grant programs in which students are enrolled.

Where does the NSLDS get its information?

The NSLDS gets information from several government and loan processing services. Here are the sources for NSLDS data:

  • Guaranty agencies, which are state agencies or private, nonprofit organizations that provide information on the Federal Family Education Loan (FFEL) Program
  • Department of Education loan servicers
  • Department of Education debt collection services (information about defaults on loans held by the Department of Education)
  • Direct loan servicing (information on federal direct student loans)
  • Common origination disbursement (information on federal grant programs)
  • Conditional disability discharge tracking system (information on disability loans)
  • Central processing system (information on aid applicants)
  • Individual schools (information on federal Perkins loan program, student enrollment and aid overpayments)

When data from these sources are combined, you can get a comprehensive overview of your outstanding loans, repaid loans and repayment schedules.

The NSLDS is updated according to each organization’s loan reporting schedule. Some report monthly, and many report data more frequently.

What you’ll find on the NSLDS

After signing up for an FSA ID (Federal Student Aid ID), you can log into the NSLDS to see the updated status of your federal student loans and grants, as well as your college enrollment status and the effective date of your status.

Loans are listed from newest to oldest, and you can find more information about each, including the loan servicer’s name and contact information, by clicking on the loan number. You also will have access to an array of details about each of your federal loans and grants:

  • Name
  • Disbursed amount
  • Date of disbursement
  • Last-known balance
  • Outstanding interest
  • Status (e.g. repayment, in grace, paid in full)
  • Status effective date
  • Interest rate
  • Progress toward the 120 qualifying payments needed for Public Service Loan Forgiveness
  • Income-driven repayment plan anniversary date

“It gives a centralized, integrated view of the loans and grants under the student’s complete life cycle,” Opperman says. “Everything is there.”

You may see a lot of terms and abbreviations you don’t recognize, but there’s a glossary to help you understand them.

What you won’t find

The NSLDS only provides information about federal loan programs, so you will not see details about private loans. To get that information, you’ll need to contact your private loan’s servicer or your school’s financial aid department. You also can review your credit report (you are entitled to one free credit report annually) to find the information.

You also won’t find:

  • Real-time balance accounts. You should see the outstanding principal balance for each loan, but this number may not include the most recent data. Contact your loan servicer for the most up-to-date numbers.
  • Information about nursing and medical loans. While these are federal loan programs, they are not included in the NSLDS. Contact your school’s financial aid department for information about nursing or medical loans.
  • Loans you are not responsible for paying. Any federal loans your parents took out on your behalf, including federal PLUS loans, will not be listed on your NSLDS account. For information about federal student loans that they are responsible for paying, your parents will need to create their own FSA ID and password to access the NSLDS data.

Even with these gaps in information, the NSLDS is a great place to start when you’re not sure whom to contact with student loan questions or when you’re trying to get on top of your loan payments. It’s also helpful if you’re trying to figure out what type of loans you have, which is necessary when you’re applying for certain loan forgiveness programs.

How to sign up for the NSLDS

As mentioned previously, to use the NSLDS you must have an FSA ID username and password, which serve as your login information and allow you to access data about your federal loans and grants online. The ID and password also provide access to many other Department of Education websites.

To create an FSA username and password, visit this link. Opperman says the certified student loan counselors who work with recommend you never give out your FSA number or password, even to credit counselors. This information carries the legal weight of a signature, and it can be used to commit identity theft. Credit counselors can get student loan information from you rather than by directly accessing your NSLDS account.

The FSA ID and password application requires your email address, mailing address, date of birth and Social Security number. A cellphone number can be provided if you’d like to bypass answering security questions to retrieve an FSA ID or password.

To look at your federal loan and grant information, click on “Financial Aid Review" after entering your FSA ID and password into the NSLDS website. You do not have to enter loan information, as agencies that issued your federal grants and loans will be responsible for reporting information to the NSLDS.

Is this site accurate?

While the information on the NSLDS generally is accurate because it is provided by loan servicers, it is usually not up to date. Organizations that provide loan information for the NSLDS report on different schedules..

What if the info is wrong?

The NSLDS is not infallible; it’s important to check your page regularly for errors and inaccuracies. Here are some common issues with the NSLDS and how to remedy them:

An error

Check the NSLDS record for this loan, and contact the data provider listed. You will need to give the data provider information that will help the organization look into the error and remedy it. If the data provider is uncooperative and will not fix the error, contact the NSLDS Customer Service Center at (800) 999-8219.

Missing data

If updated loan information is not available within 45 days of disbursement, contact a guaranty agency, the loan’s servicing center or your school’s financial aid office. Otherwise, allow for typical time lapses in reporting.

Frequently asked questions about NSLDS

Usually, no. Typically, only data providers can update information related to your loan when they make their reports to the NSLDS.

The site has an SSL certificate, which means all data passing between your web browser and the site server is encrypted (provided you’re using an SSL-compatible browser, like the latest versions of Chrome, Firefox, Safari or Internet Explorer).

The Department of Education does not charge a fee to use the site.

The site is designed to work best with Microsoft Internet Explorer. You can use other browsers, but keep in mind that the NSLDS pages may not function or display properly on other browsers. The NSLDS system requirements page provides help with browsers and a link to contact information for further assistance.

You are strongly advised not to share your FSA password — ever — as your FSA ID and password are for your use only. Anyone else who uses your FSA information is committing a security violation, and your user ID can be terminated. Organizations can lose access to the NSDLS if they share FSA IDs and passwords.

No. FSA ID passwords expire every 90 days. Fifteen days before the password expires, you will see a warning that it must be changed soon. Users can reset their passwords anytime during that 15-day window by clicking on the “change password” link on the FSA login page.

In this situation, call the NSLDS support number: (800) 999-8219.

You can call the Federal Student Aid Information Center at (800) 4FED-AID — 1-800-433-3243 — between 8 a.m. and 11 p.m. Eastern Time, Monday through Friday, and 11 a.m. to 5 p.m. on Saturday and Sunday. This helpline is not available on federal holidays. You can also contact the office by email or live chat through the website.

Marty Minchin
Marty Minchin |

Marty Minchin is a writer at MagnifyMoney. You can email Marty here


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College Students and Recent Grads, Featured, Investing, News, Retirement

Where the Wealthiest Millennials Stash Their Money

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

There’s been much talk about millennials being fearful of the stock market. They did, after all, live through the financial crisis, and many are shouldering record levels of student loan debt, while grappling with rising fixed costs.

The truth is that historically, young people have always shied away from investing. A whopping 89% of 25- to 35 year-old heads of household surveyed by the Federal Reserve in 2016 said their families were not invested in stocks. That’s only two percentage points higher than the average response since the Fed began the survey in 1989.

MagnifyMoney analyzed data from the 2016 Survey of Consumer Finances, conducted by the the Federal Reserve, to determine exactly how older millennials — those aged 25 to 35 — are allocating their assets.

In 2016, wealthy millennial households, on average, owned assets totaling more than $1.5 million. That is nearly nine times the assets of the average family in the same age group — $176,400. Included were financial assets (cash, retirement accounts, stocks, bonds, checking and savings deposits), as well as nonfinancial ones (real estate, businesses and cars).

While the wealth of each group was spread across just about every type of asset, the biggest difference was in the proportions for each category.

To add an extra layer of insight, we compared the savings habits of the average millennial household to millennial households in the top 25% of net worth. We also took a look at how the average young adult manages his or her assets to see how they differ in their approach.

Millennials and the stock market

Despite significant differences in income, we found that both sets of older millennial households today (average earners and the top 25% of earners) are investing roughly the same share of their financial assets in the market – about 60%.

Among the top 25% of millennial households, those with brokerage accounts hold more than 37% of their liquid assets, or about $224,000, in stocks and bonds and an additional 26%, or $154,000, in retirement accounts. Meanwhile, just over 14% of their assets are in liquid savings or checking accounts.

By comparison, the average millennial household with a brokerage account invests a little over $10,000 in stocks and bonds, or 22% of their total assets, and they reserve about 21% of their assets in checking or savings accounts.

Millennial households invest most heavily in their retirement accounts, accounting for around 38% of their financial assets, although they have only saved $18,800 on average.

Wealthy millennials carry much less of their wealth in checking and savings, compared with their peers. Although wealthier families carry eight times more in savings and checking than the average family — $84,000 vs. $10,300 — that’s just roughly 14% of their total assets in cash, while for the ordinary young family that figure is around 20%

The Fed data show that those on the top of the earnings pyramid are able to save far more for the future, even though they’re at a relatively early stage of their careers.

Across the board, older millennial families hold the greatest share of their financial assets in their retirement accounts. Although that share of retirement savings is smaller for wealthier millennial families (26% of their financial assets, versus 38% for the average older millennial family), they have saved far more.

When looking at the median amount of retirement savings versus the average, a more disturbing picture emerges, showing just how little the average older millennial family is saving for eventual retirement.

The median amount of money in higher earners’ retirement account is $90,000 (median being the middle point of a number set, with half the available figures above it and half below). But the median amount is $0 for the typical millennial family, meaning that at least half of millennial-run households don’t have any retirement savings at all.

Millennials and their nonfinancial assets

Most of millennial households’ wealth comes from physical assets, such as houses, cars and businesses.

While nearly 60% of young families don’t own houses today, the lowest homeownership rate since 1989, homes make up the largest share of the family’s nonfinancial assets, Fed data show.

For the average-earning older millennial family, housing represents more than two-thirds of the value of its nonfinancial assets — 66.4%. On average, this group’s homes are valued at $84,000.

The homes of rich millennial households are worth 4.6 times more, averaging $470,000 — though they represents a lower share of total nonfinancial assets — 50%.

Cars are the second-largest hard asset for the average young family to own, accounting for about 14% of nonfinancial assets.

While rich millennials drive fancier cars than their peers — prices are 2.4 times that of average millennials’ cars — their $42,000 car accounts for just 4.5% of their nonfinancial asset. In contrast, they stash as much as 31% of their asset in businesses, 20 percentage points higher than the ordinary millennial.

It’s worth noting that young adults in general are not into businesses. A scant 6.3% of young families have businesses, the lowest percentage since 1989, according to the Fed data. (Among those that do have them, the businesses represent just over 11% of their total nonfinancial assets.)

The student debt gap

Possibly the starkest example of how wealthy older millennials and their ordinary peers manage their finances can be seen in the realm of student loan debt.

A significant chunk of the average worker’s household debt comes in the form of student loans, making up close to 20% of total debt and averaging $16,000. In contrast, the wealthiest cohort carries about $2,000 less in student loan debt, on average, and this constitutes just about 4.6% of total debt.

With less student debt to worry about, it’s no surprise wealthier millennial families carry a larger share of mortgage debt. About 76% of their debt comes from their primary home, to the tune of $233,500, on average. This is 4.5 times the housing debt of a typical young homeowner.

In some cases, the top wealthy have another 11% or so of their total debt committed to a second house, something not many of their less-wealthy peers would have to worry about — affording even a first home is more of a struggle.

When is the right time to start investing?

For many millennials the answer isn’t whether or not it’s wise to save for retirement or invest for wealth but when to start. Generally, paying off high interest debts and building up a sufficient emergency fund should come first. Once those boxes are ticked, how much young workers invest depends on their tolerance for risk and their future financial goals.

“It’s never too much as long as you’ve got money for the emergency fund, and as long as they are funding their other goals not through debt,” says Krista Cavalieri, owner and senior advisor at Evolve Capital in Columbus, Ohio.

The biggest mistake that Cavalieri has seen among her young clients is that very few have been able to establish an emergency fund that will cover at least three to six months’ worth of living expenses.

Kelly Metzler, senior financial advisor at the New York-based Altfest Personal Wealth Management, said older millennials may not be able to save outside of retirement accounts yet, which can be a concern if they want to buy a house or have other large purchases or unexpected expenses ahead.

Cavalieri said that’s because young adults’ money is stretched thin by the varies needs in their lives and the lifestyle they keep.

“Their hands are kind of tied at where they are right now,” she said. “Everyone could clearly save more, but millennials are dealing with large amounts of debt. A lot of them are also dealing with the fact that the lack of financial education put that in that personal debt situation.”

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at


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College Students and Recent Grads

Applying for Public Service Student Loan Forgiveness: A Step-By-Step Guide

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


Public Service Loan Forgiveness (PSLF) is a program designed to attract workers to jobs in the public sector by wiping clean remaining federal student loan debt after 120 qualifying payments.

Those payments represent 10 years’ worth of work with a qualifying public service employer, so because PSLF began in October 2007, the first applicants are just beginning to submit their forgiveness forms.

Qualifying for PSLF means meeting specific requirements for the employer, the loan type and the repayment plan — and the details can be overwhelming.

With that in mind, here’s a step-by-step guide to applying for PSLF.

Step 1: Figure out if you qualify.

First, it helps to understand why PSLF exists.

“It’s meant to be a light at the end of the tunnel for public service jobs, when people know they could make much more money going private,” says Betsy Mayotte, director of consumer outreach and compliance at the nonprofit American Student Assistance. “A lot of the careers — social workers, teachers, public defenders — require advanced degrees. The problem there is that people would accrue all this debt, then find they couldn't stay in these public sector careers because they didn’t pay well.”

But the definition of public service is strictly defined, and “it’s not your job that matters, but your employer,” Mayotte adds. “It matters who signs your paycheck. You can be a groundskeeper at a state school and qualify. Conversely, you can feel as if your job is public service, but if your employer doesn’t meet the specific definitions, you don’t meet PSLF requirements.”

Employers that qualify for PSLF, per the U.S. Department of Education

  • A government organization (including a federal, state, local, or tribal organization, agency or entity; a public child or family service agency; or a tribal college or university)
  • A nonprofit, tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code
  • A private, nonprofit organization (though not a labor union or a partisan political organization) that provides one or more of the following public services:
    • Emergency management
    • Military service
    • Public safety
    • Law enforcement
    • Public interest law services
    • Early childhood education (including licensed or regulated health care, Head Start and state-funded pre-kindergarten)
    • Public service for individuals with disabilities and the elderly
    • Public health (including nurses, nurse practitioners, nurses in a clinical setting and full-time professionals engaged in health care practitioner and support occupations)
    • Public education
    • Public library services
    • School library or other school-based services

Employers that DO NOT qualify for PSLF

  • For-profit organizations (this includes for-profit government contractors)
  • Nonprofits that are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code or that do not provide a qualifying public service as their primary function
  • Labor unions
  • Partisan political organizations

You must work full time (whatever your employer characterizes that to be — though it must be an average of at least 30 hours per week by the PSLF definition) for one of these qualifying employers, or part time for two or more as long as it adds up to 30 hours per week, while you make your 120 on-time payments. You’ll also need to be in qualifying employment when you apply for your loan forgiveness.

Because you won’t be able to apply for PSLF until you have completed qualifying payments, it helps to build up a paper trail over the years. You should fill out and send an employment certification form (ECF) to FedLoan Servicing, which handles PSLF, each year and whenever you change employers. You’ll fill out personal information and have your employer sign the form before sending it in. The form isn’t required, but you’ll receive a response detailing your progress toward your 120 payments and confirming your eligibility — great for peace of mind as well as record-keeping.

“While you’re not required to submit the ECF at any point, it’s always a great idea to keep records,” says Adam Minsky, a Boston attorney who specializes in student loan and consumer issues. “An employer could go out of business, or lose the records of your employment. Mistakes can be made with paperwork. So if you find yourself having to make a case for yourself later, it helps to have all of this on record.”

FedLoan Servicing says my employer isn’t eligible. Can I appeal?

If the response to your ECF comes back and someone says your employer does not qualify you for PSLF, that’s generally the final decision, says Mayotte. “You can theoretically appeal, but these employer types are all pretty straightforward,” she adds. “The overarching rule is that there’s no wiggle room: You work for the government, a 501(c)(3) nonprofit or another qualifying nonprofit. The exception might be if you work for one of these other qualifying nonprofits, but you’ll need to make a case.”

To appeal, you can resend your ECF to FedLoan Servicing and ask for another review, or contact the Department of Education’s ombudsman unit. In both cases you should include evidence to show why you think your employer should qualify, Mayotte says.

But barring a clerical mistake by FedLoan Servicing, a change in decision is exceedingly rare.

Ensure your loan type and repayment plan qualify

PSLF provides forgiveness only for federal Direct Loans: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans and Direct Consolidation Loans. Private loans, including bank loans that are “federally guaranteed,” do not qualify.

Loans made under other federal student loan programs, like Perkins Loans, aren’t eligible for PSLF on their own. They may become eligible, if they’re consolidated into a Direct Consolidation Loan — but it’s important to know that only payments toward that consolidated loan will count toward the 120-payment requirement.

Speaking of consolidation, here’s another thing you should know: If you consolidate qualifying loans, the clock resets to zero payments. A consolidation is considered a new loan, and again, only payments toward the consolidated loan will be counted toward your 120.

Don’t know which types of federal student loans you have? Check the Education Department site My Federal Student Aid. A pro tip from the Education Department: “Generally, if you see a loan type with ‘Direct’ in the name on My Federal Student Aid, then it is a Direct Loan; otherwise, it is a loan made under another federal student loan program.”

Additionally, you must be enrolled in the right type of repayment plan. Qualifying repayment plans include all four of the income-driven repayment plans, which base your monthly payment on your income and family size: Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), income-based repayment (IBR); and income-contingent repayment (ICR).

Payments under the 10-year standard repayment plan qualify, but you’ll want to switch to an income-driven plan as soon as possible. If you stick with that 10-year repayment you’ll have paid off the loan, with nothing left to be forgiven under PSLF when you become eligible for it.

Make 120 qualifying payments

You’ll need to make all of those 120 payments during qualifying employment to apply for PSLF, but you don’t need to provide proof of those payments. Again, Minsky advises that it’s wise to keep your own records just in case there’s a clerical issue later — but generally, FedLoan Servicing will confirm the payments itself.

Note that the 120 payments do not have to be consecutive (nor, then, must be your employment with a qualifying public service employer). If you had periods of deferment or forbearance and stopped paying your loans, the count will pick up where you left off once you begin paying anew. Even defaulting on your loan payments doesn't disqualify you, but you’ll need to rehabilitate the defaulted loan with your servicer before the payments can count toward your 120 again.

The payments do need to be on time, defined as “those received by your federal loan servicer no later than 15 days after the scheduled payment due date.” If your payment isn’t on time, or you pay less than what you’re required to that month, it won’t count toward your 120. You may make multiple smaller payments, but they must add up to at least the minimum payment amount for that month.

Step 2: Apply for loan forgiveness

After you’ve completed your 120 payments — phew, you did it! — go to the PSLF application here. The form is six pages long, but the actual application is only two. And you, the employee, must fill out only the first page: basic personal information like your date of birth, Social Security number and contact details. You’ll also need to certify under penalty of law that the information you’re submitting is truthful.

The second page is for detailing the employer’s information, and either you or your employer can fill out the top part. Here’s what it requires:

  • Employer’s name
  • Federal Employer Identification Number (FEIN, which can be found on your W-2 — or ask your HR department)
  • Your dates of employment
  • Whether you were a full- or part-time worker
  • Which category of public service your employer falls under

At the bottom of the page, there’s a section for your employer to sign, certifying that the information above is accurate.

You’ll need to repeat that process for every qualifying employer. (That's why it’s smart to keep track of it all by submitting ECF forms annually and whenever you change employers.)

The remaining four pages of the application form reiterate the details of what it takes to qualify for PSLF. They also explain where to send the completed application form:

  • You can mail to

    U.S. Department of Education, FedLoan Servicing
    P.O. Box 69184
    Harrisburg, PA 17106-9184

  • Fax to 717-720-1628; or
  • Upload to, if FedLoan Servicing is already your servicer.

In rare cases, you may not be able to obtain employers’ certification. There’s a checkbox on page 1: “Check this box if you cannot obtain certification from your employer because the organization is closed or because the organization has refused to certify your employment. The Department will follow up to assist you in getting documentation of your employment.”

“That's another reason it’s prudent to send the ECF forms every year, because you’ll already have a signature on record,” Mayotte says. “I’ve heard of a few cases where employers were not comfortable filling out the form for privacy reasons, but usually if you show them the form and explain a bit, you can change their mind.”

Mayotte says borrowers should contact FedLoan Servicing for alternatives if they find themselves in this situation.

FAQ and other things to know

The process is estimated to take up to 60 days, a Department of Education spokesman confirmed to MagnifyMoney.

Yes. If you’ve made your 120 payments and are looking to switch to an employer who isn’t eligible, be sure to file your PSLF application first. You must also be employed full time at a qualifying employer or employers at the time the forgiveness is granted, according to the Department of Education.

“No concrete proposal seems imminent, but whenever something happens, there’s a general view among experts that a change to PSLF won’t be retroactive to existing borrowers,” Minsky says.

The payment count restarts, back at zero. The consolidated loan is considered a new loan, and only payments toward it will count.

Here are the employer certification form and the PSLF application.

While has all of the official information, it’s spread across different pages and can be unwieldy. American Student Assistance offers an excellent guide that breaks down the basics and also links to official webpages and forms.

Alternative loan forgiveness programs

Beyond PSLF, there are other federal programs to forgive or discharge federal student debt. These include:

Industry-specific forgiveness programs

  • Perkins Loan Cancellation and Discharge: This applies to people who perform certain types of public service or are employed in certain occupations. According to the Department of Education, for each complete year of service a percentage of the loan may be forgiven. That percentage varies by job/employer type, and the following workers qualify:
    • Volunteer in the Peace Corps or ACTION program (including VISTA)
    • Teacher
    • Member of the 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
  • Teacher Loan Forgiveness: Teachers who work full time for five complete and consecutive academic years (in certain elementary and secondary schools and educational service agencies that serve low-income families, and meet other qualifications) may be eligible for forgiveness of up to a combined total of $17,500 on Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans. (Those who have only PLUS loans are not eligible.) Read more about loan forgiveness programs available to teachers, including TEACH Grants and state forgiveness programs.
  • Programs for lawyers: Lawyers with at least $10,000 in federal student loans may qualify for the Department of Justice Attorney Student Loan Repayment Program (ASLRP). Additionally, the John R. Justice Student Loan repayment program provides assistance for state and federal public defenders and state prosecutors for at least three years and is renewable after 3 years. Benefits cannot exceed $10,000 in a calendar year and cannot exceed $60,000 per attorney total. .) Read more about programs for lawyers, including forgiveness programs through specific law schools and certain states.
  • Programs for doctors and health professions: Several programs are available, including multiple military doctor loan forgiveness options through the Army, Navy and Air Force. Other options include state-specific forgiveness and the National Health Service Corps (NHSC), which can provide up to a $50,000 to repay a health profession student loan in exchange for a two-year commitment to a NHSC site in a high-need area.

Income-based repayment plans

  • This isn’t a traditional cancellation program like what’s above. These four federal income-driven repayment plans base your monthly payment on your income: Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), income-based repayment (IBR) and income-contingent repayment (ICR).The payment terms vary, and your outstanding balance is forgiven after your repayment term of 20 to 25 years is complete. Because the monthly amount you owe will fluctuate based on your income, you could end up repaying your loans before your term is up, or you could have a balance that will be forgiven. However, if you receive student loan forgiveness this way, the canceled debt is taxable. (Only borrowers whose loan forgiveness stems from their employment are exempt from paying taxes on canceled student loan debt.)

Loan discharges for special circumstances

There are a few other times you may be able to get your student loans forgiven, but they’re relatively rare, and they’re generally because of bad circumstances. You can find out more about these discharges on the Department of Education’s website:

Julianne Pepitone
Julianne Pepitone |

Julianne Pepitone is a writer at MagnifyMoney. You can email Julianne here