In some circumstances, you can get rid of your federal student loans through loan cancellation, which is also sometimes called "student loan discharge" or "student loan forgiveness." In order to cancel your loans, you must meet certain conditions.
Below are several ways to cancel federal student loans.
For-profit schools are well known for using glowing descriptions of future careers and high salaries to convince potential students to take out loans in order to attend, only to have the schools close before the students can finish the programs. If this sounds like something that happened to you, you might be able to discharge your loans.
You can cancel a FFEL Program Loan, a Direct Loan, or a Perkins Loan if you were unable to complete a program because a school closed:
You aren’t eligible for this kind of cancellation in the following circumstances, even if the school closed.
If the school didn’t make sure you were qualified to attend the program—or you fall into any of the other categories described below—you might be able to cancel your federal student loans.
Typically, FFEL Program Loans and Direct Loans can be discharged in the following situations:
You can generally cancel all or a portion of FFEL Program Loans and Direct Loans if you never attended the school or withdrew from the school, but the school failed to refund the loan money. In addition, some states have funds to reimburse students who didn’t get refunds due them.
You can cancel federal student loans if you're totally and permanently disabled. (Learn more about this type of discharge in Canceling Your Student Loans: Permanent Disability.)
You might be able to cancel your Direct Loans if you work in public service, like for a government organization or a not-for-profit organization. To qualify for this kind of forgiveness, you must make 120 qualifying payments while employed full-time by a qualifying employer or employers and you must make your payments through a qualifying repayment plan, which include all of the income-driven repayment plans (plans that base your monthly payment on your income). You also have to be working for a qualifying employer when you submit the application for forgiveness and when the remaining balance on your loan is forgiven.
If you're planning on applying for this kind of discharge, it’s a good idea to complete and submit an Employment Certification form to the Department of Education annually and whenever you change employers to make sure you’re on track to receive forgiveness. Also, be aware that this forgiveness option is on the chopping block under the PROSPER Act, which was introduced in the U.S. House of Representatives in December 2017. This bill might not be passed into law, but if it does, new borrowers after a certain date (perhaps starting in 2019) won't be able to get this kind of discharge.
Those who do certain kinds of public service or are employed in specific occupations—like as a volunteer in the Peace Corps or in the military—might qualify for a Perkins Loan cancellation. Depending on the type of loan you have, and when that loan was taken out, you may be eligible to cancel part or all the loan.
A student’s death wipes out any outstanding amount owed on federal student loans, including PLUS loans. (Learn more about this type of discharge in Canceling Your Student Loans: Death.)
To apply to cancel your student loans—or to find out more about whether you qualify—call your loan servicer or you may download the forms here. If you have a Federal Perkins Loan, contact the school that made the loan or contact the loan servicer the school has designated.
Be aware that your loan servicer might not tell you about all the available forgiveness programs. For this reason, it pays to learn about your options before you call. Go to the U.S. Department of Education’s Federal Student Aid website to get extensive information about each type of available discharge.