How Long Do You Have To Pay Student Loans Before They Are Forgiven

Student loans are the best way to pay for college. But they can also be a huge pain in the you-know-what if you don’t keep up with them.

If you don’t pay your student loans on time, it can hurt your credit score, and in some cases, cause your loan to go into default. In other words, it’s not something you want to mess with if you can help it.

But what happens if you don’t have any more money to pay off your loan? Can they be forgiven? Yes—but there are a few things you need to know about that process before it happens.

In this article, we’ll explore what forgiveness means for different types of student loans and how long each type takes before it is forgiven. We’ll also talk about how long you have to make payments before forgiveness occurs (and how long those payments would have been).

How Long Do You Have To Pay Student Loans Before They Are Forgiven

Any outstanding balance on your loan will be forgiven if you haven’t repaid your loan in full after 20 years (if all loans were taken out for undergraduate study) or 25 years (if any loans were taken out for graduate or professional study).

How can people get rid of their student loan debt—and, specifically, when is loan forgiveness an option? We don’t need another statistic to tell us how deep in student loan debt U.S. college graduates are. Total debt and average debt figures don’t mean much, except to say that if the sums you owe keep you up at night, you’re in good company. What matters is finding a solution.

KEY TAKEAWAYS

• Forgiveness is the best kind of student loan debt relief, but it’s hard to come by.
• Income-driven repayment plans and Public Service Loan Forgiveness can erase people’s remaining debt after many years of payments.
• Only federal student loans can be forgiven.
• Forgiveness can leave recipients with a big tax bill.
• Forgiveness and forbearance sound similar but are different.

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Student Loan Forgiveness: Which Loans Are Eligible?
Only direct loans made by the federal government are eligible for forgiveness. Stafford loans, which were replaced by direct loans in 2010, are also eligible. If you have other federal loans, you may be able to consolidate them into one direct consolidation loan that would make you eligible.1 Non-federal loans (those handled by private lenders and loan companies) do not qualify for forgiveness.2

In 2020, borrowers with federal student loans who attended for-profit colleges and seeked loan forgiveness because their school defrauded them or broke specific laws were dealt a setback when former President Trump vetoed a bipartisan resolution that overturned new regulations that make it much more difficult to access loan forgiveness.3 The new, more onerous regulations went into effect on July 1, 2020.4

are student loans forgiven after 25 years

Do student loans get forgiven after 25 years? It depends on what types of student loans you have. Student loan forgiveness after 20 years or after 25 years is an option if you have certain federal student loans including:

• Stafford loans
• Grad PLUS loans
• Consolidation loans

If you have qualifying loans, you must also sign up for an income-driven repayment plan. Depending on the specifics of your plan, your payment will be capped at a specific percentage of your income. Once you have made the required payments for either 20 or 25 years — depending, again, on which plan you choose — the remaining balance of your loans is forgiven.

Income Driven-Repayment Plans

Student loan forgiveness after 20 or 25 years is an option only if you choose an income-driven payment plan for your eligible federal loans.

There are four options for income-driven repayment that could potentially result in loan forgiveness after 20 years or after 25 years. These options include:

• Revised Pay As You Earn (REPAYE): This limits payments to 10% of discretionary income. Any remaining loan balance will be forgiven after 20 years if all loans were for undergraduate study or after 25 years if you took out any graduate school loans.
• Pay as You Earn (PAYE): This limits payments to 10% of your discretionary income but payments cannot exceed what you’d owe under the Standard Repayment Plan. Any remaining loan balance will be forgiven after 20 years.
• Income-Based Repayment (IBR): If you’re a new borrower after July 1, 2014, this caps payments at 10% of discretionary income and payments cannot exceed the amount due under the Standard Repayment Plan. If you borrowed before July 1, 2014, payments are limited to 15% of discretionary income with the same payment cap. 20 year student loan forgiveness is available if you were a new borrower after July 1, 2014; otherwise, your remaining balance will be forgiven after 25 years.
• Income-Contingent Repayment (ICR): This limits payments to the lesser of 20% of discretionary income or the amount you’d owe on a repayment plan with a fixed 12-year repayment period, adjusted based on income. Loan forgiveness is available after 25 years.

So what happens to student loans after 20 years or after 25 years? Any remaining loan balance that remains unpaid at the end of your repayment period will be forgiven and you will no longer have to repay it.