Under President Obama’s student loan forgiveness program, qualifying borrowers are eligible to have all of their federally-funded student loans completely erased after making 20 years’ worth of payments on the debt, no matter how much they still owe.

In simple language, this means, essentially, that you can feel free to borrow money for college from the federal government knowing that after you’ve made 240 monthly payments on your debt (no matter how much you have or have not paid off), you won’t be required to put out anymore monthly payments.

Keep in mind that this objective is not completely perfect–you will still be required to pay taxes on the forgiven debt, but this will be described in further detail later on.

Student Loan Forgiveness

If you have Federal Student Loans you may qualify for any of the student loan forgiveness programs that are available to borrowers. You may be eligible for principal reduction, loan forgiveness, or a complete loan discharge depending on your individual circumstance.

Income Based Payments

If you are suffering from a financial hardship, you may be eligible for an Income Based Payment. In this repayment program, you would have a payment based on your income and family size. The payment could be as low as $0.00 per month.

Loan Consolidation

Loan consolidation will take all your federal student loans and combine them into one new loan. You will have only one lender, with one monthly payment. In this consolidation you are able to choose a payment plan that's affordable to you. By consolidating you also may become eligible for loan forgiveness.


President Obama recently introduced a new student loan forgiveness program, which offers significant advantages to those who have utilized federal student loans. These include:

  1. Complete forgiveness of federal student loan debt after borrowers have made 240 monthly payments
  2. Introduction of the Pay As You Earn Student Loan Repayment Plan
  3. Updates to the Public Service Loan Forgiveness Program (complete forgiveness after 120 monthly payments)

Obama’s Student Loan Forgiveness Program reforms are discussed here in detail, and the site will be updated whenever relevant news is announced. Be sure to check back throughout 2016 for the information, proposals, and implemented changes relating to Obama’s student loan forgiveness program.


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Contact USDC For initial consultation

Riview and choose from available saving options

You submit docs for consolidation/forgiveness

Start saving money

President Obama’s student loan forgiveness program is fairly complex, but don’t feel bad if you struggle to understand everything about it. The most important thing to remember is that his program implemented changes to the previous federal loan forgiveness programs in order to forgive federally-funded student loans.

The President’s reforms will now make it easier for people to borrow money for college that they won’t have to worry about paying back after they have put in a certain number of months–regardless of how much debt has actually been paid off during that time.

The most important component of the President’s student loan forgiveness program was the introduction of the new student loan repayment plan called the “Pay As You Earn” (PAYE), an income-based repayment plan. This allows more people, regardless of financial status, to qualify for debt forgiveness.

This new repayment plan may remind you of something, and you’re right! It is fairly similar to the Income-Based Repayment Plan and Income-Contingent Repayment Plan. Both of these allow borrowers to set monthly student loan payments based on a percentage of their discretionary income.

These repayment plans are appealing to many graduates because they offer reassurance that even if you can’t find a good job immediately after you complete your education, your monthly student loan payments will reflect your lower income, and you won’t be expected to pay more than you can.

In the best case scenario, you could theoretically be enrolled in the PAYE plan and owe a whopping $100,000 in federal student loans, but only have a monthly payment of $0!

Are you Eligible For Student Loan Forgiveness?

Check Your Eligibility Now. Get in touch with USDC today

The Pay As You Earn Student Loan Repayment Plan

I explain Pay As You Earn in detail further down on this page, but to really understand what this program offers, how it works, and what the best ways are to take advantage of it, please visit this our page about the PAYE plan here.

To summarize, PAYE is an income-based repayment plan that offers total debt forgiveness after you’ve made 20 years’ worth of monthly payments on your federal student loan debt.

No matter how much money you’ve borrowed or how much you still owe, you will stop having to make monthly payments after you’ve made 240 of them.

This is significant, particularly due to the fact that many of today’s college students take out large sums of money to pay for their education but don’t end up landing a job that pays enough to cover their student loan debts right away.

Updates to the Public Service Loan Forgiveness Program

The Public Service Loan Forgiveness Program has existed for many years, but it was recently updated and improved by some of President Obama’s important student loan reforms.

Previous law stipulated that people enrolled in the PSLF program had to make 20 years’ worth of payments on their federal student loans before their debt would be forgiven. Now, Obama has ensured that with the PSLF loan forgiveness program, debt forgiveness is now available after making only ten years’ worth of payments.

Many would agree that this is the best student loan forgiveness program available due to its universal benefits. In short, it’s a program that virtually everyone will find advantageous because the eligibility requirements are not as specific as some other similar programs. No matter your specific situation, this program could be helpful to you.


The “Pay As You Earn” component of the President’s forgiveness plan is similar to income-based repayment, or income-contingent repayment, in that it caps your monthly student loan payments based on your income at the time.

“Pay As You Earn” adds to the list of existing Student Loan Repayment Programs, allowing you to schedule your loan term to last up to 20 years. It allows you to be flexible. If your income increases, your monthly payments do as well.

Those people with excessive student loan debt, low incomes, or fluctuating income levels will benefit from this, as the amount of their monthly student loan payments end up being flexible, rather than fixed. It eliminates a great deal of financial stress.


There are two major eligibility considerations required to qualify for the Pay As You Earn plan. They are listed below:

  • You must have a Partial Financial Hardship. This means that the amount you would be required to pay on your eligible federal student loans with the 10 year long Standard Repayment Plan must be higher than the monthly amount you would owe under Pay As You Earn.
  • You must be a New Borrower as of October 1, 2007. This means that you must have taken out your Direct Loans on or after October 1, 2007. Any loans taken out before then will NOT qualify for the Pay As You Earn plan, so anyone with older loans is ineligible.


Shannon MacDowell

Are you overwhelmed when you think about your student debt? Do you feel like your loan provider has no idea how to explain your loan or what can be done to make payments easier? If so please contact US Debt Consulting! Their friendly, helpful staff takes the stress out of student loans! They explain all of your options and stay with you until they are confident you understand your loans. Their priority is customer service and they understand that you need to live your life as well as pay off your debt. Contact them at contactus@usdebtconsulting.org You'll be glad you did!

Jacob Reyna

Everyone knows the dread and panic of having to face student loan debts. The amount always seems overwhelming, to such an extent that getting an education appears tantamount to sentencing oneself to years of financial agony. However, what everyone doesn't know is that USDC is happy to discuss your options and help you manage your debt. I have only positive things to say about their service--special thanks to Dave, who really went the extra mile in providing support and information where it was desperately needed. If you have student loan debt, please do yourself a favor and contact USDC!

Michelle Mastel

My student loans made me miserable and constantly worry about the future. It’s hard to think about what dreams i could accomplish with such a financial burden to worry about, especially not having a job in my field of study. I didn’t even know if I would qualify for the program, but after a quick phone call from Dave from US Debt Consulting, he was able to explain in detail my new payment plan. Now I feel relieved, as if a giant weight has been lifted from my debt-crippled shoulders.

Caranina Hillhouse

I am very grateful for all that USDC has done for me! I was barely paying my student loan off, and at the rate I was going, my children would be graduated from college before mine was paid off! USDC has allowed me to pay off my loan while working as a teacher, and I don't have to worry about how I am going to afford putting my children through college! Thank you, I am so grateful!