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Southern Illinois University Carbondale

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Loan Forgiveness

College Cost Reduction and Access Act of 2007 (CCRAA) has provided two ways for students to have federal loans forgiven:

25 Year Forgiveness – Income Based Repayment Plan (Section 203) : if your debt is high and your income is low, you are entitled to pay back your federal loans through the Income Based Repayment Plan (IBR), beginning July 1, 2009, and the remainder of your debt will be forgiven after 25 years. (You do not need to work in public service to qualify).

10 Year Loan Forgiveness – Work Full-time in Public Service (Section 401) : if you work full-time in public service for a cumulative of 10 years, at the end of the 10 years the remainder of your federal loans will be forgiven. This means you must make 120 income based/contingent payments while working in public service before your loans can be forgiven.


*There is sometimes confusion between these two options. The first option is for anyone who has a high debt to income ratio. Under the second option you must have a high debt to income ratio AND work in public service. However, under both options you could technically be paying under the Income Based Repayment Plan. The difference is that if you are ALSO working in public service you will be able to have your loans forgiven at 10 years instead of waiting 25 years, unlike those who are not employed in public service.

Where to find more information:
College Cost Reduction and Access Act (CCRAA): Read more
Professor Philip Schrag’s Law Review article: Read more
IBR Info: Read more
FinAid: Read more
Federal Direct consolidation loan information and applications: Read more
Final Regulation (34 C.F.R. 685.219) issued by the U.S. Department of Education on October 23, 2008: Read more