If you took out federal student loans before 2010, chances are you borrowed from the Federal Family Education Loan Program (FFELP). While FFELP loans are no longer disbursed, they’re still possibly forgiven.
FFELP student loan forgiveness is achievable through income-driven repayment and relief programs like Public Service Loan Forgiveness and Teacher Loan Forgiveness, not to mention Biden-administration measures that can help you qualify more quickly.
However, the rules and requirements for getting your FFELP loans canceled can be confusing. In some cases, you might need to consolidate into the Direct Loan program (FFELP’s successor) to be eligible — but there are pitfalls to watch out for.
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3 ways to receive FFELP student loan forgiveness
1. Income-driven repayment (IDR)
- Route to relief: If you still owe a balance at the end of your IDR plan term, the government will forgive the rest. Currently, IDR plans require repayment for 20 or 25 years.
- Key eligibility criteria: FFELP loans made to students are eligible for the Income-Based Repayment plan, but must consolidate FFELP loans to qualify for the other IDR plans, such as Pay As You Earn or SAVE. Note that FFELP loans made to parents are only eligible for the Income-Contingent Repayment plan (and only if you consolidate them first).
- How to apply: You can apply for IDR by submitting a request on the Federal Student Aid (FSA) website. As mentioned, you may have to apply for a Direct Consolidation Loan first, which you can also do online or by calling your loan servicer. Consult your servicer (or a certified student loan counselor) before making a move. Find your servicer’s contact information on StudentAid.gov.
- Good option for: Reducing your monthly dues according to your family size and income.
2. Public Service Loan Forgiveness (PSLF)
- Route to relief: PSLF will forgive your balance after 10 years of full-time work in public service and 120 qualifying payments on an IDR plan.
- Key eligibility criteria: You must consolidate FFELP loans for them to be eligible for PSLF.
- How to apply: Track your progress toward PSLF by submitting the “Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application” annually and whenever you change employers. When you’ve met the decade-long requirement, you’ll submit this form to your loan servicer to request forgiveness. The Education Department’s PSLF Help Tool can guide you through the process.
- Good option for: Public service workers.
3. Teacher Loan Forgiveness (TLF)
- Route to relief: TLF offers up to $5,000 or $17,500 in relief after five years of teaching in an eligible low-income school — search for your school via the Education Department’s online directory. The amount of forgiveness you’ll receive depends on your subject area: To qualify for the larger forgiveness amount ($17,500), you must be a math or science teacher at the secondary level, or a special education teacher at the elementary or secondary level.
- Key eligibility criteria: FFELP loans are eligible for TLF; you don’t have to consolidate them to qualify. However, you’re not eligible if you had an outstanding loan balance as of Oct. 1, 1998 or when you took out your loan after Oct. 1, 1998.
- How to apply: Submit a Teacher Loan Forgiveness Application to your loan servicer after you’ve completed your five years of teaching. You’ll need your school’s chief administrative officer to fill out the certification section of this application.
- Good option for: Teachers in low-income schools or educational service agencies.
What about Biden administration-awarded student loan forgiveness for FFELP?
If you’re an FFELP borrower seeking loan forgiveness, you may get closer to your goal with a one-time account adjustment. Announced by the Biden administration in April 2022, this account adjustment credits you for payments already made on your FFELP loans.
Normally, consolidating FFELP loans means losing credit for past payments and restarting your progress toward IDR or PSFL relief. If you consolidate FFELP loans before April 30, 2024, however, you’ll get credit for previous payments.
The Biden administration reported on March 21, 2024 that it had canceled $45.6 billion for 930,500 borrowers “through improvements to income-driven repayment plans,” which no doubt accounted for some FFELP-specific relief.
Good to know: If your loans were eligible for the Covid-19 pandemic-inspired administrative forbearance — which paused interest and payments for three-plus years through October 2023 — those non-monthly payments will also count toward your progress, even if you didn’t make voluntary payments during that period.
Should I consolidate my FFELP loans, then?
Whether you should consolidate FFELP loans comes down to your specific situation and plans for loan forgiveness.
“Some FFELP borrowers should absolutely consolidate into the Direct Loan program to take advantage of things such as PSLF and … the one-time account adjustment,” said Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, a donor-based organization.
Thanks to this adjustment, you don’t have to worry about losing credit for past loan payments — as long as you apply by April 30, 2024. After this date, however, consolidating FFELP loans will mean resetting the clock on your progress toward loan forgiveness.
Another potential downside of consolidation is increasing your overall costs. When you consolidate, any unpaid student loan interest capitalizes (or is added onto) your principal balance. If you have significant unpaid interest, consolidating could make your loans more expensive.
Financial aid expert Mark Kantrowitz said that consolidating could also mean losing certain interest rate discounts.
“There may be a drawback to consolidation if the borrower is receiving significant discounts from their FFELP lender, such as an interest rate reduction for making all payments on time,” says Kantrowitz. “These benefits are provided by the lender — not the loan — and will be lost if the borrower consolidates their loans.”
Bottom line: Before consolidating FFELP loans, discuss any concerns with your loan servicer. Better yet, talk to a certified student loan counselor, perhaps from the Department of Justice’s list of approved counseling agencies, for more objective advice. With their help, consider how consolidating will affect your loan balance, interest rate and long-term costs before you apply.
Tracking the success of FFELP loan forgiveness applications
FFELP loan balances declined significantly in the past few years as borrowers pursued loan forgiveness, according to the Department of Education.
Specifically, many borrowers consolidated their FFELP loans to take advantage of the limited PSLF waiver, which gave them credit for payments that normally wouldn’t have counted. Although that temporary waiver ended in October 2022, you can access similar benefits via the one-time account adjustment by consolidating before April 30, 2024.
As of July 2023, about 662,000 federal loan borrowers qualified for PSLF under the limited waiver. And between October 2021 and March 2024, the Biden administration awarded $62.5 billion in PSLF relief for 871,000 borrowers (of all loan types).
Did you know? The Education Department manages about $1.5 trillion (almost 93%) of the federal loan portfolio, with the remaining 7% including FFELP loans held by lenders and guaranty agencies, as well as similarly defunct Perkins loans held by schools.
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Alternatives to FFELP student loan forgiveness
If you’re not eligible for FFELP loan forgiveness, you may be looking for other strategies to manage your education debt. Here are some alternatives worth exploring:
- Income-driven repayment: IDR plans offer loan forgiveness after two decades or more, but they also can make your monthly payments more affordable and may come with an interest subsidy. The SAVE plan, for example, will cover any leftover interest from month to month so your loans won’t grow due to unpaid interest.
- Extended repayment: This plan offers another way to reduce your monthly dues; it extends your loan terms to 25 years and involves fixed or graduated payments.
- Graduated repayment: This plan may be wise if you anticipate your income growing over time. It allows you to make lower payments at the beginning that increase every two years. Consolidation loans with balances of $60,000 or more can access terms as long as 30 years.
- Income-sensitive repayment: This plan is only available for FFELP loans (not Direct Loans). It involves monthly payments that increase or decrease based on your income over a term of 10 years.
Tip: If you’re unsure which federal repayment plan best fits your current and future goals, use the Education Department’s Loan Simulator. After inputting your loan information, you’ll see what your monthly and overall repayment would look like under various plans.
- Deferment and forbearance: If you need to pause your monthly payments, you might postpone them temporarily through deferment and forbearance. Keep in mind that interest will continue to accrue during this time unless you have subsidized loans.
- Student loan repayment assistance: Some states and private organizations offer repayment assistance if you work in a shortage area or high-need community. Some companies also offer student loan repayment matching (or tuition reimbursem*nt) as an employee benefit. Ask your employer’s human resources department to implement this perk, or consider switching to a job that already offers it.
- Fresh Start: If you defaulted on FFELP loans before the Covid-19 payment pause, you might return them to good standing through Fresh Start. This temporary Education Department-administered program will revive your defaulted loans while restoring your access to federal financial aid and removing the record of default from your credit reports. You can sign up for Fresh Start online, over the phone or via mail, but the program ends in September 2024.
- Student loan refinancing: Refinancing FFELP loans with a private lender is another option, especially if your main goal is to reduce your interest rate and have a single monthly payment. You’ll need fair or better credit and income (or a creditworthy cosigner) to qualify for student loan refinancing. The downside of refinancing federal loans, though, is that you’ll lose access to government-exclusive repayment plans and forgiveness programs. Refinancing is irreversible, so proceed cautiously.
Refresher course: What are FFELP student loans?
FFELP student loans are a type of federal student loan via the Federal Family Education Loan Program that ended on July 1, 2010. Through this program, the Department of Education partnered with private lenders to provide federally guaranteed student loans.
“FFELP loans were essentially the first wide-scale federal student loan program,” said Mayotte.
FFELP loans included:
- Subsidized Federal Stafford Loans
- Unsubsidized Federal Stafford Loans
- Federal PLUS Loans
- Federal Consolidation Loans
During the Great Recession (2008 to 2009), the government purchased FFELP loans from private lenders. Today, some FFELP loans are held by the Department of Education, while others are held by a guaranty agency or private lender. If you owe FFELP loans, you may have to consolidate them to access certain federal forgiveness programs and repayment plans.
After the FFEL program ended, the government replaced it with the Direct Loan program. If you borrowed after 2010, you may have Direct Subsidized or Unsubsidized, Direct PLUS or Direct Consolidation Loans. Unlike FFELP loans, Direct Loans are funded by the federal government and are generally eligible for federal forgiveness programs and repayment plans without requiring consolidation.
How to determine your federal loan type
Confirm your federal loan type by signing into your account at StudentAid.gov with your FSA ID, which is your username and password. Within your dashboard, you’ll see the types of loans you owe and whether they’re Direct or FFELP loans.
If you owe FFELP loans, determine your lenders by viewing the “My Loan Servicers” section of your dashboard. If the name of your servicer starts with “ED,” then your loan is held by the Education Department. Otherwise, your loan may be privately held.
Frequently asked questions (FAQs)
You may be eligible for FFELP student loan forgiveness if you’re a teacher or public servant or are repaying FFELP loans on an income-driven repayment plan. Note that you must consolidate FFELP loans into the Direct Loan program to make them eligible for some relief programs.
The application process for FFELP student loan forgiveness varies by loan forgiveness program. For instance, you can apply for Teacher Loan Forgiveness by submitting the “Teacher Loan Forgiveness Application,” and for Public Service Loan Forgiveness by submitting the “Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application.” As for loan forgiveness from an income-driven repayment plan, expect to receive it automatically after 20 or 25 years of payments, but it never hurts to confirm with your loan servicer.
Alternatives include income-driven repayment, deferment and forbearance. You can also explore options for student loan repayment assistance from your state, employer or a private organization. Refinancing your student loans with a private lender also has the potential to save you money, but it will mean losing access to federal repayment plans, forgiveness programs and other protections.
All FFELP loans are eligible for some kind of loan forgiveness, but you may have to first consolidate them into the Direct Loan program. For example, FFELP loans made to students are eligible for forgiveness from any income-driven repayment plan after you consolidate them. However, FFELP loans made to parents are only eligible for forgiveness from one income-driven plan — Income-Contingent Repayment — after you consolidate them.
