Various programs exist that forgive federal student loans. In one kind, called income-driven repayment (IDR) plans, after borrowers make monthly payments (which are calculated as a percentage of income) for a certain period, usually 20 years, the outstanding balance of their loans is forgiven. Another program is Public Service Loan Forgiveness (PSLF), which is for borrowers in an IDR plan who are employed full time in public service; that program provides debt forgiveness after only 10 years of monthly payments. Neither the IDR plans nor the PSLF program limits the amount that can be forgiven. The programs’ biggest benefits go to people who borrow to attend graduate or professional school, because they tend to borrow larger amounts than people who borrow for undergraduate studies do.
This option includes two alternatives that would reduce loan forgiveness primarily for borrowers who took out federal student loans to pay for graduate school, starting with loans originated to new borrowers in July 2017. The first alternative would limit the amount that could be forgiven under the PSLF program to $57,500, shifting any remaining balance into an IDR plan with a longer repayment period. Because that limit is equal to the limit for federal student loans for