Yes, trade school graduates can get federal student loans forgiven. Federal forgiveness and discharge programs don’t distinguish between a four-year university and an accredited trade school; what matters is the type of loan you have, how you repay it, and what you do for work.
Federal repayment rules changed significantly in 2025 and 2026. The SAVE plan has ended, a new Repayment Assistance Plan (RAP) launched on July 1, 2026, and forgiveness under income-driven plans is federally taxable again. This page explains what’s available now. If you’re still in school or planning to enroll, see our guide to Student Loans for Trade Schools first.
Key point: Only federal student loans qualify for these programs. Private loans from banks, credit unions or online lenders generally don’t offer forgiveness.
Recent changes (as of October 2026)
These changes took effect between July 2025 and July 2026, most of them under the federal budget law signed in July 2025.
- SAVE has ended. The SAVE plan was blocked in court and ended by settlement in 2026. Starting July 1, 2026, servicers began notifying SAVE borrowers that they have at least 90 days to choose a new plan. Borrowers who don’t choose are placed in a standard plan.
- RAP is the new income-based plan. The Repayment Assistance Plan opened July 1, 2026. Anyone who takes out a new federal loan or consolidates on or after that date can choose only between RAP and the new standard plan.
- PAYE and ICR are being phased out by July 1, 2028. Income-Based Repayment (IBR) remains for borrowers with older loans, and it is now open to borrowers at any income level.
- Forgiveness under income-driven plans is taxable again. The federal tax exemption expired at the end of 2025. PSLF forgiveness is still tax-free.
- Parent PLUS loans can no longer use RAP. They can reach an income-driven plan only through consolidation and IBR, under limited deadlines.
What’s coming next
- SAVE deadlines continue to roll out. Servicers are moving SAVE borrowers in batches, so some borrowers’ deadlines fall in late 2026 or early 2027. Watch for your servicer’s notice.
- July 1, 2028: PAYE and ICR close. Borrowers still in those plans must move to RAP or IBR by then.
- Tax exemption: Unless Congress acts, forgiveness under income-driven plans stays federally taxable.
We review this page whenever federal rules change and at least every quarter.
Ways trade school borrowers can get loans forgiven or discharged
Public Service Loan Forgiveness (PSLF)
If you work full time for a government agency or a qualifying nonprofit, PSLF forgives your remaining Direct Loan balance after 120 qualifying monthly payments, which is about 10 years. Many trade careers can qualify when the employer is public or nonprofit: electricians and HVAC technicians at a city or school district, medical assistants and sterile processing techs at nonprofit hospitals, diesel mechanics for a transit authority, and many more.
- Payments must be made under a qualifying plan, such as RAP, IBR or the 10-year standard plan.
- Your employer must certify your employment. Use the PSLF Help Tool on StudentAid.gov and submit the form at least once a year.
- New for July 1, 2026: A Department of Education rule allows employers found to engage in “substantial illegal purpose” activities to be excluded from PSLF. Most public and nonprofit employers aren’t affected, but you should confirm your employer still qualifies.
- PSLF forgiveness is not taxed as federal income.
Forgiveness through an income-driven repayment plan
Income-driven plans set your payment based on your income and forgive what’s left after a set number of years.
| Plan | Who can use it | Payment | Forgiveness after |
|---|---|---|---|
| Repayment Assistance Plan (RAP) | Direct Loan borrowers (not Parent PLUS); the only income-based plan for loans made on or after July 1, 2026 | 1% to 10% of adjusted gross income, minus $50 a month per dependent, with a $10 monthly minimum | 30 years (360 payments) |
| Income-Based Repayment (IBR) | Borrowers with loans made before July 1, 2026 | 10% or 15% of discretionary income, capped at the 10-year standard payment | 20 or 25 years |
| PAYE and ICR | Existing enrollees only; ending July 1, 2028 | Varies | Varies |
RAP also helps with interest. If your payment doesn’t cover the month’s interest, the unpaid interest is waived, and if your payment reduces your principal by less than $50, the government adds a matching principal payment of up to $50. This keeps your balance from growing.
Taxes: Balances forgiven under RAP, IBR or other income-driven plans after January 1, 2026 count as federal taxable income unless Congress changes the law. Plan ahead, and talk to a tax professional before forgiveness is expected.
Closed school discharge
If your trade school closes while you’re enrolled, or soon after you withdraw, you may be able to have the federal loans for that program discharged in full. You generally can’t qualify if you finish the program at another school through a teach-out or transfer credits. Learn more at StudentAid.gov.
Borrower defense to repayment
If your school misled you, for example about job placement rates, graduate salaries, accreditation, or whether credits would transfer, you can apply for borrower defense to have your federal loans for that school discharged. Keep copies of ads, enrollment agreements, and emails from admissions staff. Apply at StudentAid.gov.
Teacher Loan Forgiveness
Graduates who go on to teach career and technical education (CTE) can qualify. After five consecutive years of full-time teaching at a qualifying low-income school, you can receive up to $5,000 or, in some subjects, up to $17,500 in forgiveness on Direct and FFEL Stafford loans. Details.
Total and permanent disability (TPD) discharge
Borrowers who can’t work because of a long-term disability can have federal loans discharged. Veterans with a qualifying VA disability rating are often identified automatically. Details.
Older loan types
If you borrowed before 2010 (FFEL or Stafford loans) or before 2017 (Perkins loans), you may need to consolidate into a Direct Consolidation Loan before some programs, such as PSLF and RAP, will count your payments. Perkins Loan holders who work in certain public service jobs may also qualify for Perkins cancellation through their school. Note that consolidating on or after July 1, 2026 limits you to RAP or the new standard plan, so compare your options first.
Does my trade school affect whether I can get forgiveness?
Only in two ways. First, your school must be accredited and take part in federal student aid for you to have federal loans in the first place. Second, if the school closes or misleads you, closed school discharge or borrower defense may apply. Otherwise, forgiveness depends on your loans, your repayment plan and your job, not on which school you attended. Be cautious of any school or company that promises your loans “will be forgiven.”
Avoid scams: You never have to pay for help applying for federal forgiveness. Every application is free at StudentAid.gov or through your loan servicer.
How to apply
- Find your loans. Log in to StudentAid.gov to see which federal loans you have and who your servicer is.
- Choose the right program. Use the sections above to match your job and situation.
- Get on a qualifying repayment plan. For PSLF or income-driven forgiveness, enroll in RAP, IBR or another qualifying plan. If you were on SAVE, choose a new plan before your servicer’s deadline.
- Certify employment (PSLF) or income (income-driven plans) every year. Allowing the IRS to share your tax data with the Department of Education makes yearly recertification automatic.
- Keep making payments while you wait for a decision, unless your servicer tells you otherwise.
- Keep records of payment counts, employer certifications and all letters from your servicer.
Frequently asked questions
Can trade school loans be forgiven?
Yes. Federal Direct Loans used for an accredited trade school qualify for the same forgiveness and discharge programs as loans for a four-year college, including PSLF, income-driven forgiveness, closed school discharge and borrower defense.
What happened to the SAVE plan?
SAVE was blocked in court and ended through a 2026 settlement. Since July 1, 2026, servicers have been moving SAVE borrowers to other plans. If you were on SAVE, you’ll receive a notice with a deadline to choose RAP, IBR or a standard plan.
What is the Repayment Assistance Plan (RAP)?
RAP is the federal income-based repayment plan that launched July 1, 2026. Payments range from 1% to 10% of your income, with a $10 minimum and a $50 monthly reduction for each dependent. Any remaining balance is forgiven after 30 years of payments. Payments under RAP also count toward PSLF.
Is student loan forgiveness taxable?
PSLF forgiveness is not federally taxable. Forgiveness under income-driven plans that happens on or after January 1, 2026 is generally taxable as federal income. State rules vary.
My trade school closed. What should I do?
Check whether you qualify for a closed school discharge on StudentAid.gov. If the school misled you before it closed, you can also apply for borrower defense.
Can private student loans be forgiven?
Generally no. Private lenders don’t take part in federal forgiveness programs, though some lenders offer discharge in cases of death or disability.
The bottom line
Loan forgiveness is still available to trade school graduates, but the options look different from even a year ago. If you work in public service, PSLF is the fastest route. Otherwise, choose the repayment plan that fits your income now, keep up with yearly recertification, and plan for possible taxes on income-driven forgiveness. For official, current details, go to StudentAid.gov.
Last reviewed: October 2026