What Is a Debt Forgiveness Program?


Quick Answer

A debt forgiveness program is a program that exchanges loans for some kind of service. In the United States, most debt forgiveness programs target people who cannot pay back their student loans; however, options for other kinds of loans can include debt consolidation, debt relief services and bankruptcy, according to the FTC.

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What Is a Debt Forgiveness Program?
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Full Answer

One of the most prominent debt forgiveness programs is the Public Service Loan Forgiveness Program. This federal program forgives student loans in exchange for working 10 years in a public service job. However, not all loans are eligible. Eligible loans include loans received under the William D. Ford Federal Direct Program, according to the Federal Student Aid website.

People who have other types of student loans or other debts can pursue debt consolidation loans, which involve consolidating all debts into a second mortgage or loan. They can also look into relief services such as credit counseling or debt management plans. Bankruptcy can be a last resort for some people, although debts such as student loans and child support are not included in bankruptcy.

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