Determine if your loan is eligible for forgiveness. On the federal level, all Federal Direct Loans (FDL) and federally guaranteed loans (FFEL) are eligible. State departments of education each set their own requirements. Private loans are never eligible (Federal Student Loan Forgiveness Law).
Make at least 120 qualifying loan payments on a Federal Direct loan while working full-time for 10 years in public service employment. A qualifying loan payment is a full payment made on time. Service requirements may vary based on the industry in which you are serving.
Apply for forgiveness. You cannot apply until you have completed the service requirement. You will need to apply directly through the loan program you used to receive your funds. For example, if you have a Federal Direct Loan through the Stafford Loan Program, you will need to apply for forgiveness specifically on the Stafford Loan.
Await your response. The U.S. Department of Education will respond in writing verifying your loan balance has been forgiven. This process can take up to two weeks.
Check your credit. Access a copy of your credit report, and look for any outstanding loan balances listed. Your student loan should be listed as closed in a manner satisfactory to the lender. Your total debt as reflected on the report should be reduced to reflect the forgiveness.
Determine if your loan is eligible for forgiveness. On the federal level, all Federal Direct Loans (FDL) and federally guaranteed loans (FFEL) are eligible. State departments of education each set their own requirements. Private loans are never eligible (Federal Student Loan Forgiveness Law)
Serve with Americorps, Peace Corps, Volunteers in Service to America (VISTA) or the U.S. Military. Each of these organizations offers a set amount of loan forgiveness in return for your service. The amount will partially depend on the type of loan you have taken. For example, serving in the Peace Corps may offer partial cancellation of a Stafford loan, but it will offer up to 70 percent cancellation of a Perkins loan.
Verify your loan balance. After service, your loan balance should be reduced by the promised amount, and this will be reflected on both your account statement from the lender as well as your credit report. You should check both sources in order to assure the lender has cancelled the debt correctly.
Repay your remaining debt. With these options, your service will cancel a portion of your debt right off the bat, but a large portion of your debt will still remain. You must pay this off on schedule in order to protect your credit.
Verify your account balance upon complete payment. Your credit report and account statements from the lender should reflect your loan has been paid off in a manner satisfactory to the lender. This will not only relieve you from future debt payments, it will also boost your credit score tremendously.