If you run your own therapy practice and you have student loans, your options for having them forgiven or discharged are limited. 

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In most cases, you are not eligible for the Public Service Loan Forgiveness Program (PSLF). If you have a Federal Perkins loan, it is also unlikely that you would be able to have your loan discharged while working as a private practice therapist.

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However, you may still have your student loan forgiven—once a set amount of time has passed—if you are on an Income-Based Repayment (IBR) plan.

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If student loan payments put you under major financial pressure, the potential to have them forgiven could affect your decision whether to enter or remain in practice as a self-employed therapist. 

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Here’s what you need to know about student loan forgiveness for therapists, how to apply for forgiveness, and recent changes to student loan forgiveness programs under Trump.

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What are the different types of student loan forgiveness for therapists?

Private lenders rarely forgive student loans except in cases of death or total disability. However, if the courts determine that a financial institution has engaged in predatory lending, you may be able to have your loans forgiven. 

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Only public student loans offer structured, predictable programs for having your loans forgiven.

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Public student loan forgiveness falls into one of four categories:

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• Loan forgiveness for IBR borrowers
• The Saving on a Valuable Education (SAVE) plan
• The PSLF
• Discharge of Federal Perkins loans

Loan forgiveness for IBR borrowers

If your student loan qualifies for the Income-Based Repayment plan, the amount of your student loan payments is determined by your discretionary income (your total income above 150% of the poverty line). 

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Depending on when you took out your student loan, the outstanding balance is forgiven after 20 to 25 years. However, you may be required to pay income tax on the amount forgiven.

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The types of loan that qualify for IBR are:

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• Direct loans (both subsidized and unsubsidized)
• Federal Stafford loans (both subsidized and unsubsidized)
• PLUS loans made to students
• Consolidation loans (direct or Federal Family Education Loans (FFELPs)) that do not include PLUS loans made to parents

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One of the benefits of the IBR program is that you can qualify for it regardless of your type of employer. Both the PSLF and the discharge of Federal Perkins loans generally require you to work for a government organization or a registered non-profit in order to qualify. 

The SAVE plan for therapists

Until summer of 2025, the SAVE plan allowed borrowers to pay back their student loans on an income-based plan and have them forgiven under terms generally more favorable than IBR.

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Loans qualifying for SAVE included:

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• Direct loans (both subsidized and unsubsidized)
• PLUS loans made to students
• Consolidation loans (direct or Federal Family Education Loans (FFELPs)) that do not include PLUS loans made to parents

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However, SAVE is now effectively defunct due to a 2024 court decision. Borrowers enrolled in SAVE are being encouraged to switch their repayment plans to IBR. 

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The future of SAVE, including what you should do if you are already a SAVE borrower, is covered below.

The PSLF for therapists

The PSLF program allows you to have your loans forgiven after a set period provided your loan belongs to a qualified repayment plan and you work for an eligible employer.

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The set period is equivalent to 120 monthly payments, or 10 years if you make every payment.

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Most loan repayment plans qualify for PSLF, including:

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• The 10-Year Standard Repayment Plan
• The IBR Plan
• The Income-Contingent Repayment (ICR) Plan
• The Pay As You Earn (PAYE) Plan
• The SAVE Plan

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However, FFEL and Perkins loans do not qualify for PSLF.

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The biggest limitation to having your loans forgiven under PSLF comes from employment requirements. In order to use PSLF, you must work for a qualified employer while making your 120 monthly loan payments. 

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Eligible employers are limited to:

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• US-based government organizations at the federal, state, local, or tribal level, including the US military
• Not-for-profit organizations exempt under Section 501(c)(3) of the Internal Revenue Code
• Certain other qualifying public services

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In most cases, that means you won’t be able to qualify for PSLF while working as a therapist in private practice. 

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That being said, the 120-payment period does not need to be consecutive. You could work for multiple qualified employers, with time off in between working as a self-employed therapist; so long as you report your payments to the PSLF program while you are working for qualified employers, you can gradually progress towards the 120-payment goal.

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Also, there is one exception to the PSLF employment requirements: if you work for a private practice (including your own private practice), and through that practice: 

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• You work as a contractor for a qualifying organization; and
• State laws prevent that organization from hiring employees directly to fill positions or provide services 

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Then you may be able to qualify for the PSLF. In that case, you will need to provide the EIN of the qualifying organization and have an authorized official from the organization certify that you work or have worked for them.

Discharge of Federal Perkins loans

If you have a Federal Perkins Loan, you may be able to have it discharged incrementally while you work in certain industries.

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These industries include:

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• Education
• Medical health care
• Law enforcement and other first responders
• The legal profession
• Nonprofits
• The military
• Services for people with disabilities

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As with the PSLF, it’s unlikely that you would be able to qualify to have your Federal Perkins loan discharged while working as a therapist in private practice.

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However, if your practice serves people with disabilities and you work full time, you may be able to qualify for discharge.

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How to apply for student loan forgiveness

The steps to apply for student loan forgiveness differ according to which program you apply for.

Loan forgiveness for IBR borrowers

To have your loans forgiven under IBR, you must first apply for the IBR program. 

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Use StudentAid’s Income-Driven Repayment (IDR) Plan tool to complete an application. 

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Once you are registered, your loans will automatically be forgiven after 20 to 25 years. When you are registered for IBR, you can also apply for forgiveness after 10 years under the PSLF program.

The PSLF

To apply for PSLF, submit a PSLF form annually or each time you change employers. You can complete a form online using the PSLF Help Tool. 

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Each year you submit a PSLF form, StudentAid will send you a letter confirming the number of qualifying payments you have made. Once you reach 120 qualifying payments, StudentAid will confirm your eligibility and work with your loan servicer to have the remaining balance forgiven. 

Discharge of Federal Perkins loans

To apply for the discharge or cancellation of a Federal Perkins loan, contact the school or the loan servicer that provided the loan. They will give you the application forms and instructions you need.

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How do changes to student loan forgiveness under Trump affect therapists?

Recent changes under the Trump administration have limited or modified options for having student loans forgiven.

The end of SAVE

Since SAVE was cancelled in 2024, several changes will affect those enrolled in the program:

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• It is no longer possible to have your loans forgiven through the SAVE program.

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• Starting August 2025, interest charges resumed under SAVE. 

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• As of August 2025, a general forbearance on SAVE was still in effect, with payments paused.

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• Borrowers enrolled in SAVE are being encouraged to switch to IBR. Payments made under SAVE will be counted under IBR.

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• If you are enrolled in SAVE, you have until the end of June 2028 to switch from SAVE to a different program. Starting July 1, 2028, all borrowers enrolled in SAVE will automatically be switched to the new Repayment Assistance Plan (RAP).

The introduction of RAP

As part of the passing and signing of the “big, beautiful bill”, RAP will replace SAVE. Borrowers will have access to RAP starting in 2026.

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RAP is an income-driven repayment program, meaning that the amount borrowers pay is based on their income.

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Some key details:

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• RAP payments are calculated based on adjusted gross income (AGI), rather than discretionary earnings (as with SAVE)

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• RAP payments will be equivalent to 1% to 10% of a borrower’s income, depending on their income level

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• RAP has a minimum monthly payment of $10, whereas SAVE allowed qualifying low-income borrowers to pay $0 per month

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• Under RAP, student loans are forgiven after 30 years, whereas under SAVE they were forgiven after 20 or 25 years

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More information about RAP should emerge once the program becomes available.

Changes to IBR 

As of August 2025, all student loan forgiveness under IBR was paused while the program updated its system to recalculate eligible payments.

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Borrowers who combine their student loans into one income-driven plan before July 1, 2026 will be eligible for IBR. However, they will not be eligible for RAP.

Caps on student loan amounts

The “big, beautiful bill” introduced new limits to the amount students can borrow.

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It sets a $100,000 lifetime cap on student loans for graduate students. (The cap is $200,000 for medical students and students in law school.)

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It also introduces new limits on borrowing for part-time students, and reduces opportunities for the forbearance or deferment of payments.

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Finally, there is now a $65,000 cap on Parent PLUS loans, and Parent PLUS loans taken on after July 1, 2026 will only be eligible for standard repayment plans.

Key takeaways

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• For most self-employed therapists, the surest route to student loan forgiveness is through the IBR program

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• The PSLF program and cancellation of Perkins Federal loans are limited to therapists working for qualified organizations, and in most cases therapists in private practice do not qualify

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• SAVE is now effectively defunct, and those enrolled in SAVE are being encouraged to switch to IBR or the forthcoming RAP

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• Details are still emerging about RAP, which is scheduled to become available in 2026

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• With student loan forgiveness in a state of turmoil due to modifications introduced by the Trump administration, borrowers should make an effort to keep up to date with any new changes

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Want to learn more about loans? Check out our complete guide to loans for therapists.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

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Bryce Warnes is a West Coast writer specializing in small business finances.

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