6 Ways to Get Out of Student Loan Debt (2025 Guide)

Americans owe $1.75 trillion in student loans. If you're part of that statistic, you likely fall into one of two camps: either you can make your payments but they hurt, or you can't make them at all.

This guide focuses on the second group. If your income is too low, your debt is too high, or your school misled you, federal law gives you multiple ways out. Private loans have fewer options but still some.

Here are six strategies to eliminate or reduce student debt, ranked by which ones forgive the most.

1. Public Service Loan Forgiveness (PSLF)

PSLF wipes out your remaining balance after 120 qualifying payments—roughly 10 years. This is not a small-print program. As of 2024, over 790,000 borrowers have had $56 billion forgiven through PSLF.

You qualify if you meet three criteria:

• You work full-time for a government agency or 501(c)(3) nonprofit
• You have federal Direct Loans (or consolidate other federal loans into Direct Loans)
• You make 120 payments under an income-driven repayment (IDR) plan

Income-driven plans cap your payment at 10-20% of discretionary income. If you earn $40,000 and have a family of three, your payment might be $150/month. After 10 years of those payments, the rest vanishes. Tax-free.

The catch: you must recertify your employment annually and stay current on payments. Miss a year of paperwork, and those months don't count toward your 120.

Temporary Expanded PSLF (TEPSLF)

If you worked in public service but weren't on the right repayment plan, TEPSLF offers a second chance. It forgives loans for borrowers who made 120 payments under any plan, not just IDR plans, as long as the payment amount equaled or exceeded what they would have paid under an IDR plan.

TEPSLF has limited funding. Apply through StudentAid.gov and check your eligibility before the fund runs dry.

2. Teacher and Healthcare Worker Forgiveness

If you teach in a low-income school or work in underserved healthcare, you have dedicated programs.

Teacher Loan Forgiveness: Up to $17,500 forgiven after five consecutive years teaching at a low-income school. You need to teach full-time in a high-need subject (math, science, special education) to hit the $17,500 cap. Other teachers get up to $5,000.

NURSE Corps Loan Repayment Program: Nurses and nurse faculty working in critical shortage areas can receive up to 85% of their loan balance repaid over three years. The first two years cover 60%, the third year adds another 25% if you extend your service.

Unlike PSLF, these programs don't require 10 years. But the forgiveness amounts are capped, and you can't combine them with PSLF for the same period of service.

3. Total and Permanent Disability Discharge

If you're unable to work due to a physical or mental disability, your federal loans can be discharged entirely. This applies to both Direct Loans and Federal Family Education Loans (FFEL).

You prove disability in one of three ways:

• Veterans: Submit VA documentation showing you're unemployable due to a service-connected disability
• Social Security: Provide an SSA notice showing you receive disability benefits and your next review is 5-7 years away
• Physician certification: A doctor certifies you can't engage in substantial gainful activity for at least 60 months

Once approved, your loans enter a three-year monitoring period. If your income exceeds the poverty line for your household during those three years, the discharge can be revoked. After three years, it's permanent.

Before 2018, discharged amounts were taxable. That changed. Disability discharges are now tax-free through at least 2025 under current law.

4. Borrower Defense to Repayment

If your school lied to you,about job placement rates, accreditation, transferability of credits,you can apply to have your federal loans canceled. This is called borrower defense to repayment.

High-profile examples include:

• Corinthian Colleges (Everest, Heald, WyoTech): $5.8 billion discharged for 560,000 borrowers
• ITT Technical Institute: $3.9 billion discharged
• University of Phoenix: $191 million in automatic discharges for deceptive advertising

You apply through the Department of Education, detailing how the school misled you. If approved, your loans are discharged, and you may receive a refund of payments already made.

This process takes time. As of 2024, the average borrower defense claim takes 18-24 months to resolve. But if your school is on the ED's closed school list, approval rates are high.

5. Settlement (Private Loans Only)

Private student loans,the ones from Sallie Mae, Navient, SoFi, banks,don't qualify for federal forgiveness. But they can be settled.

Settlement means you pay a lump sum (usually 40-60% of the balance) and the lender agrees to forgive the rest. This only works if you're in default or close to it. Lenders don't settle with current borrowers.

The process:

1. Stop paying for 90+ days (your credit will tank, but it's likely already damaged if you're considering settlement)
2. Wait for the lender to charge off the loan (usually after 120-180 days)
3. Negotiate directly or hire a debt settlement company
4. Get the agreement in writing before sending money

Settled debt is taxable. If you settle a $30,000 loan for $12,000, the IRS considers the $18,000 difference as income. Budget for that tax bill.

If you can't afford a lump sum, some lenders accept payment plans on the settlement amount. Navient, for example, has offered 24-month plans at 0% interest on settled balances.

6. Bankruptcy (Last Resort, But Possible)

Student loans are difficult to discharge in bankruptcy, but not impossible. You must prove "undue hardship," which courts interpret differently depending on your circuit.

The most common test is the Brunner standard:

• You can't maintain a minimal standard of living if forced to repay
• Your financial situation is unlikely to improve
• You made good-faith efforts to repay before filing

Recent data shows bankruptcy courts are becoming more lenient. In cases where borrowers specifically request student loan discharge, roughly 50% get full or partial relief. The problem: most bankruptcy filers don't ask. They assume it's impossible.

If you're filing Chapter 7 anyway,because of medical debt, credit cards, or other obligations,adding an adversary proceeding to discharge student loans costs about $1,000-$2,000 in extra legal fees. That's a small investment if you owe $50,000+ in loans and meet the hardship criteria.

Private loans are slightly easier to discharge than federal loans, but both require the same adversary proceeding.

If you're considering bankruptcy for multiple debts, run through our eligibility screener to see if Chapter 7 makes sense for your situation.

What If None of These Apply?

If you don't qualify for forgiveness, discharge, or bankruptcy, you still have two options: income-driven repayment or refinancing.

Income-Driven Repayment (IDR): Caps your payment at 10-20% of discretionary income. After 20-25 years, remaining balance is forgiven. The forgiveness is taxable (unless Congress extends the tax exemption beyond 2025). This isn't fast, but it prevents default and keeps you out of collections.

Refinancing: Only makes sense if you have good credit and stable income. You trade federal protections (forbearance, IDR, forgiveness) for a lower interest rate. Private lenders like SoFi and Earnest offer rates as low as 4-7% for well-qualified borrowers. But once you refinance federal loans into private loans, you lose access to every program listed above.

The Bottom Line

Student loan relief isn't one-size-fits-all. If you work in public service, PSLF is your best bet. If you're disabled, apply for discharge. If your school defrauded you, file a borrower defense claim. If you have private loans and can scrape together a lump sum, settlement works. And if your financial situation is truly dire with no path forward, bankruptcy is on the table.

Start by identifying which category you fall into. Then apply. The only guaranteed way to stay trapped is to do nothing.

If you're juggling student loans alongside other debt and wondering whether bankruptcy could wipe the slate clean, see what bankruptcy can do for you here.