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by Vault Education Editors | March 31, 2009


If you decide to pursue any of the following you may be eligible to have at least some of your education loans forgiven (cancelled):

  • Teaching in low income communities, teaching special education or teaching subjects short on qualified teachers

  • Practicing public interest law

  • Practicing medicine in areas that lack adequate medical care

  • Doing volunteer work

Special Note Regarding Loan Forgiveness Programs and Federal Student Loan Consolidation: Generally speaking, you should consider consolidating all your federal student loans to minimize your monthly payments in conjunction with seeking help under a loan forgiveness program. The one exception relates to federal Perkins loans. If you plan on taking a teaching or public interest job or volunteering for the Peace Corps you should investigate leaving your Perkins loan out of your federal consolidation loan in order to preserve your ability to have the Perkins loan forgiven.

  • Learn more through Vault's no-obligation loan consolidation service

Loan Forgiveness Programs for Teachers

You can have up to 100% of a federal Perkins loan forgiven if you teach full time in a public or nonprofit school system serving students from low-income families or work as a special-education teacher or as a teacher in fields that are short of qualified teachers (including math, science and foreign languages).

You can also qualify for deferment of your loan payments while you're performing teaching service that qualifies for loan forgiveness. You should contact the school that holds your Perkins loan for information on applying both for deferment of payments and forgiveness of the loan.

Highly qualified high school math and science teachers and elementary and high school special education teachers who work for five consecutive years in a qualifying low-income school are also eligible for up to $17,500 in federal Stafford loan forgiveness.

You can apply to your lender or loan servicing agency for teacher Stafford loan forgiveness after you have completed the five-year teaching requirement. Learn more about the Stafford loan forgiveness program at

Loan Forgiveness Programs for Public Interest Lawyers

Many law schools offer Loan Repayment Assistance Programs that provide loan forgiveness and other financial aid to graduates who hold public interest or non-profit jobs. Read more about Law School Loan Repayment Assistance Programs.

Loan Forgiveness Programs for Doctors and Nurses

The federal government offers loan forgiveness to doctors and nurses who practice in areas that lack adequate medical care through the National Health Service Corps and the Nursing Education Loan Repayment Program

Loan Forgiveness Programs for Volunteers

The Peace Corps offers up to 70% forgiveness of Perkins loans as well as deferment of federal student loan payments. Learn more at

AmeriCorps and Volunteers in Service to America (VISTA) both offer monetary awards for service that can be used to repay student loans.

Loan Forgiveness Tax Considerations

Generally speaking, the amount of loan forgiveness you receive is taxable as income to you. However, loan forgiveness under many of the programs described above may be free from federal income tax. Go to Chapter 5 of IRS Publication 970 for more information.

Please note that states may treat loan forgiveness differently for state income tax purposes.


Filed Under: Education|Grad School

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