In certain instances, there are circumstances where you could be eligible to have federal student loans canceled, forgiven, or even discharged. Find out more about the various types of forgiveness and if you qualify due to employment or other factors.
Understanding The Loan Forgiveness
In other words, forgiveness, cancellation, or the cancellation of your Loan indicates that you’re no longer legally required to repay any or all of the Loan. Learn more by clicking the below links.
There are differences between forgiveness, cancellation, and Discharge.
Terms like forgiveness, cancellation, and Discharge refer to the same thing. However, they’re applied in various ways. For example, if you’re not being required to pay the loans you have due to your employment, it’s usually called cancellation or forgiveness. But, on the other hand, suppose you’re not being required to repay your loans due to different circumstances, like an unavoidable disability or the closing of the institution where you got the Loan. In that case, it’s typically referred to as Discharge.
It is essential to keep in mind that regardless of the conditions that might permit for your Loan to be canceled, forgiven, or discharged, you are responsible for the repayment of the Loan, irrespective of whether or not you finish your studies, get employment that is related to the program you’re studying or are content with the education you received by borrowing. Even when you were an underage person (under 18) when you made the promissory note or took out the Loan, you’re still responsible for the repayment of the Loan.
Kinds of Forgiveness, Cancellation, and Discharge
The following summaries provide an overview of the forgiveness and Dischargdischarge types for other Federal student loans.
The Public Service Loan Repayment
is available to direct Loans*
Suppose you’re employed by an agency that is a not-for-profit or government. You might be eligible for loan forgiveness under the Public Service Forgiveness (PSLF) Programme.
PSLF will pay off the amount of the Direct Loans when you’ve completed 120 qualifying monthly payments in an eligible repayment plan working full-time for a qualified employer.
* Federal Family Education Loan (FFEL) Program loans and Perkins Loans may become eligible for PSLF when combined into Direct Loan Program.
Teacher Loan Forgiveness
is available for Direct Loans as well as the FFEL Loans and Program loans
If you have taught full-time for five consecutive academic years at the lowest-income elementary school, secondary school, or educational service agency and are eligible for forgiveness amounting to $17,500 for your Direct Loan or FFEL Program loans.
Note It is impossible to benefit from the same qualifying payment or time of service Teachers Loan Forgiveness or Public Service Loans Forgiveness.
Closed School Discharge
It is available in Direct Loans, FFEL Program loans, and Perkins Loans.
If your school is closed during your enrollment or shortly after your withdrawal from the school, you may be eligible for a discharge on your Federal student loans.
Perkins Loan Cancellation and Discharge
Only available in conjunction with Federal Perkins Loans
You could be eligible to get all or a part or all of the Perkins Loan canceled (based on your volunteer or employment) or dismissed (under particular conditions). This includes the Perkins Loan Teacher Cancellation.
Permanent and Total Disability Discharge
It is available for Direct Loans, FFEL programs, and Perkins Loans.
If you’re entirely and permanently disabled, you could qualify for a waiver of federal student loans or the Teacher Education Assistance College and Higher Education (TEACH) Grant service obligation.
Discharge Due to Death
It is available to Direct Loans, FFEL Program loans, and Perkins Loans.
Federal student loans are disbursed upon an individual’s death or of the student on behalf of whom the PLUS loan was taken out.
Discharge in Bankruptcy (in rare cases)
It is available for Direct Loans, FFEL programs, and Perkins Loans.
In certain situations, you may be able to get the federal Loan for student loans canceled following the Bankruptcy. But bankruptcy discharge isn’t an automatic procedure.
The Borrower Defense for Repayment
is available to direct Loans*
You could be eligible to get a discharge from a Federal student loan based on the borrower’s defense to repayment in case you borrowed the funds to attend school and the school did or did something that was connected to your Loan or the educational services that the Loan was designed to be used for. The requirements for qualifying as a borrower’s defense repayment discharge differ based on the date you received the Loan.
False Certification Discharge
is available for Direct Loans as well as FFEL Loans from Programs
You could be qualified for disbursement from your Federal student loans if your school did not verify your eligibility to receive a loan.
Unpaid Refund Discharge
is available for Direct Loans as well as FFEL Loans from Programs
If you resigned from the school but did not return the Loan’s funds in full to your lender, You could be qualified to discharge the amount that was a federal loan(s) you didn’t return.
Forgery Discharge
available for Direct Loans, FFEL Program loans, and Federal Perkins Loans held in the U.S. Department of Education.
Forgery is the act of creating fake documents or the modification of an actual copy in an attempt to defraud fraudulently. Identity theft victims are often also victims of fraud.
If you believe you were the victim of fraud, You may be qualified for a disbursement of the federal student loan(s) fraudulently arranged under your name.
Parents are eligible for Parent Loans.
Like loans given to students or parents, the parent PLUS Loan can be discharged if you pass away, if the borrower (not the student on behalf of whom you took out the Loan) is wholly and permanently disabled, or if your Loan is discharged as a result of Bankruptcy. The parent PLUS Loan could also be released if the child on behalf of whom you took out the Loan dies.
Additionally to that, the whole or a portion of the parent PLUS Loan can be repaid under any of the following circumstances:
- The student you borrowed money from couldn’t finish their program because the school was closed.
- Your eligibility for the Loan was not correctly certified by the institution.
- Your eligibility to get the Loan was not correctly certified by identity fraud.
- The student resigned from the school. However, the school did not make a payment of the loan funds, which it was required to pay according to the applicable laws and regulations.
Contact your lender to find out more.
How to Apply for Reparations
Get in touch with the Loan servicer If you believe you are eligible. If you’ve got a Perkins Loan and are eligible, call the school that issued loans or the lender that the school has appointed.
The Loan Payments are due during the Review Period.
By the kind of cancellation, forgiveness, or discharge you’re seeking, You may be required to pay a fee during the application review. Contact your lender to determine if you must continue making payments throughout the review time.
My Application Was Accepted
If you’re eligible for forgiveness or cancellation of the entire sum of your Loan, you’re no longer required to pay loan installments. However, if you are eligible to be forgiven, canceled, or discharge only the loan amount, you’ll be accountable for the remainder.
If you’re eligible for certain kinds of loan discharges, you might qualify for a refund of all or some of the loan payments on the Loan. Additionally, any adverse information related to the delinquency or default on a loan could be erased from your credit report. The release could be erased from any defaulted status when the debt was in default. If you do not have any other defaulted loans, you can apply for federal assistance for student loans.
My Application Was Denied
Suppose you were denied your application and cannot pay the Loan’s repayment according to the conditions of the promissory notes you signed. Speak with the Loan servicer regarding the repayment options available if you use Direct Loan or FFEL Program loan. Explore the repayment options.
If you are defaulting on your Loan, go to the page Getting out of default to learn how to begin to repay your Loan and your options to avoid Bankruptcy.
If you think your application was rejected in error, please get in touch with your loan provider for more details.