Student Loan Forgiveness: What It Is, How It Works, and How to Qualify

If you're facing student loan debt and you meet certain criteria, you might qualify for a cancellation of your federal student loans.

These days, it’s common to be facing overwhelming student loan debt. If you’re eligible, though, you can get rid of your federal student loans through a forgiveness program. To qualify for a particular forgiveness program, you must meet specific criteria, take specific steps, and meet certain conditions.

But the stress of trying to qualify for forgiveness can drive you to make mistakes, either by doing the wrong thing or failing to act at all. Because your actions are vitally important when it comes to getting loan forgiveness, it’s essential that you to learn who qualifies for loan forgiveness, how to get loan forgiveness, and pitfalls you should avoid when seeking loan forgiveness.

Who Qualifies for Student Loan Forgiveness

If you qualify for one of the following programs, your federal student loans will be forgiven, canceled, or discharged.

Public Service Loan Forgiveness

Under this program, the remaining balance on your eligible loans is forgiven after you make 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

Teacher Loan Forgiveness

If you work as a teacher, full-time for five complete and consecutive academic years in a low-income school or educational service agency—and you meet other qualifications—you might qualify to have up to $17,500 forgiven.

Perkins Loan Cancellation (including teacher cancellation)

You might be eligible to have all or a portion of your Federal Perkins Loan canceled based on your employment (like if you teach in a qualifying school) or volunteer service (like if you serve in the Peace Corps).

Total and Permanent Disability Discharge

If you're totally and permanently disabled, you might qualify for a discharge.

Death Discharge

A student’s death wipes out any outstanding amount owed on federal student loans, including PLUS loans.

Bankruptcy Discharge

Though this kind of discharge is rare, if you can prove that repaying your student loans would cause an undue hardship, you can have your student loans discharged by filing for bankruptcy.

Closed School Discharge

You might qualify for a closed school discharge if you couldn’t complete your program because your school closed and you were enrolled when the school closed, you were on an approved leave of absence when the school closed, or the school closed within 120 days after you withdrew.

False Certification Discharge

If your school falsely certified your eligibility to receive a loan and you meet other eligibility requirements, you can qualify for a discharge.

Borrower Defense to Repayment

If your school misled you or engaged in other misconduct in violation of certain state laws that convinced you to enroll or remain enrolled—and you can prove it—you can qualify for a discharge of the federal student loans you took out to attend the school.

Unpaid Refund Discharge

You can generally cancel all or a portion of your loans if you never attended the school or withdrew from the school, but the school didn’t refund the loan money.

(For more general information on these programs, see Student Loan Relief: Canceling Your Loans)

How to Get Student Loan Forgiveness

To apply for federal student loan forgiveness, cancellation, or discharge, contact your loan servicer. You can also 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. (Discharges for totally and permanently disabled veterans are automatic, unless the veteran opts out.)

Your servicer can give you information about different options. But be aware that your 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 Federal Student Aid website to get extensive information about each type of available program.

Pitfalls to Avoid

If you’re planning on getting loan forgiveness, you need to make sure your loans qualify. You must have federal—not private—student loans. Also, for certain loan forgiveness programs, you must have specific kinds of federal student loans. For example, if you want to qualify for public service loan forgiveness, you must have Direct Loans.

Some programs, such as public service loan forgiveness, require you to make payments under a qualifying repayment plan. Also, for certain programs, only payments you make while employed for a qualifying employer will count toward loan forgiveness. So, you need to become very familiar with program requirements and make sure you strictly adhere to them.

You also need to keep an eye out for changes in loan forgiveness programs because eligibility criteria and requirements could change.

Getting Help

If you have questions about your loans, forgiveness programs, and how to apply for them, contact your servicer. You can also get detailed information about federal student loans, forgiveness programs, and other ways to manage your student loan debt on the U.S. Department of Education’s Federal Student Aid website. (To learn about different options if you’re struggling to pay your student loans, see How to Get Out of Student Loan Debt.)

If you need assistance in dealing with your servicer or need help understanding the different repayment, deferment, forbearance, and forgiveness options for federal student loans, consider consulting with a student loan attorney or debt negotiation attorney.

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