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No matter under what circumstances you have borrowed federal education loans, you must repay them. However, if you are unable to repay the entire loan, you need not worry. The U.S. Department of Education offers student loan forgiveness, cancellation, and discharge programs through which you can get your complete or some part of the loan forgiven.

To qualify for these programs, you must meet several eligibility requirements. Below we have listed various education loan forgiveness, cancellation, and discharge programs and their eligibility criteria. Scroll down and check out which option best suits your needs. But before that, understand what the difference between loan forgiveness, cancellation, and discharge programs is.

What Is The Difference Between Loan Forgiveness, Cancellation, And Discharge Programs?

When you are not required to make any payments on your education loans due to your job is called a forgiveness or cancellation program. If you are not required to make any payments on your loans due to situations like the school’s closure from where you received your loans or have a total and permanent disability condition, such programs are called loan discharge.

Note that these programs hold good only if you have borrowed federal education loans and not private loans.

Student Loan Forgiveness Programs

Most student loan forgiveness programs are designed to help borrowers who work in education, health care, public service, and other specific fields for a certain period of time. Qualifying for these programs means that you need not repay some or all of your loan amount. You can apply for :

Income-Driven Repayment Forgiveness

This forgiveness program is the best option if you cannot afford to make your payments under a 10-year standard loan repayment plan. Under the Income-Driven Repayment (IDR) plan, you may have 20 or 25 years (depending on your plan) to repay the loan amount. If you haven’t cleared the loan by the end of your repayment period, the remaining amount will be forgiven. However, the forgiven amount may be taxable.

To be eligible for Income-Driven Repayment plan forgiveness, you must qualify for any of the following IDR plans:

  • Pay As You Earn (PAYE)
  • Income-based repayment
  • Income-contingent repayment
  • Revised Pay As You Earn (REPAYE)

Public Service Loan Forgiveness

You can opt for this type of forgiveness program if you are a full-time government or non-profit employee with federal education loans. Under this program, you can have your loan forgiven after making 120 monthly loan payments. Loans forgiven under this program are not considered as taxable income.

To qualify for Public Service Loan Forgiveness (PSLF), you must meet the following requirements:

  • Work full-time for a federal, state, local, or tribal government or non-profit organization
  • Have Direct Loans or consolidate other loans into a Direct Loan
  • Repay loans under an Income-Driven Repayment plan
  • Make 120 qualifying payments

Teacher Loan Forgiveness

You can be eligible for this forgiveness program if you are a teacher with a full-time job in a low-income public elementary or secondary school. Through this program, you have up to $17,500 in Stafford or direct loans forgiven.

To qualify for teacher loan forgiveness, you must meet the following requirements:

  • You must not have had an outstanding balance on Federal Family Education Loan (FFEL) Program loan or Direct Loans as of October 1, 1998, or on the date that you got an FFEL Program loan or Direct Loan after October 1, 1998.
  • You must have a job at an elementary school, secondary school, or educational service agency that serves students from low-income families.
  • You must be a full-time, competent teacher for five complete and consecutive academic years, and at least 1 of those years must have been after the 1997-1998 academic year.
  • The loan(s) must have been made before completing your five academic years of teaching service.

Loan Cancellation Program

The U.S. Department of Education offers a loan cancellation program known as the Perkins Loan cancellation. Under this program, you can get a 100% federal Perkins Loan canceled, provided you worked in a public or non-profit elementary or secondary school system as a:

  • Teacher in a school serving students belonging to low-income families
  • Special education teachers, including teachers of infants, toddlers, children, or disabled youths
  • Teachers in the fields of science, mathematics, bilingual education, foreign languages, or in any other field that a state education agency determines to have a shortage of skilled and qualified teachers in that state

Some of the non-teaching professions also stand a chance to qualify for the program, such as:

  • Firefighters
  • Law enforcement officers
  • Members of military service
  • Public defenders
  • Nurses or medical technicians
  • Early childhood education providers
  • Faculty members at a tribal college or university
  • Employees at a child or family services agency
  • Librarians with a master’s degree at Title I schools
  • Speech pathologists with a master’s degree at Title I schools
  • Professional providers of early intervention (disability) services

Loan Discharge Programs

You can apply to get your loan discharged if you cannot continue making payments due to other circumstances (typically unforeseen situations or those out of your control). The loan discharge programs are listed below:

Closed School Discharge

You could be eligible for 100% loan discharge if your school closed while still enrolled or 120 days after you withdrew. You can qualify for this program if you have borrowed only the following types of loans:

  • Direct Loans
  • FFEL Program Loans
  • Perkins Loans

Note that you will need to continue making payments while your application is being processed. Once you are approved for this program, you will no longer be required to make payments, and also, all or some past payments that you made may be refunded.

Discharge Due To Death

If you die under unfortunate circumstances, your federal education loan will be discharged (regardless of whether you borrowed the loan yourself or your parents borrowed a PLUS loan to pay your college bills). You can qualify for this program regardless of the type of federal loan.
Note that the loans will be discharged only after the submission of the death certificate.

Total and Permanent Disability Discharge

You can be eligible for this program if you are totally and permanently disabled (physically or mentally) and you have documentation from the U.S. Department of Veterans Affairs (VA) or the Social Security Administration (SSA), or a physician.

You can qualify for this program if you have borrowed any of the following loans:

  • William D. Ford Federal Direct Loan (Direct Loan) Program Loan
  • Federal Family Education Loan (FFEL) Program Loan
  • Federal Perkins Loan
  • TEACH Grant

Discharge In Bankruptcy

Under rare circumstances, your federal education loan may be discharged after declaring bankruptcy. Note that this only happens if you file a separate action known adversary proceedings and prove that repaying the loan would impose an undue hardship on you and your family.

This type of discharge program is available only for the following types of federal education loans:

  • Direct Loans
  • FFEL Program Loans
  • Perkins Loans

Borrower Defense To Loan Repayment

If your school misled you or violated state laws, you can be eligible for borrower defense to loan repayment (or borrower defense). Note that you should prove that your school misled you, failing to which you will have to repay your federal education loan. This program is available only if you have borrowed Direct Loans.

False Certification Discharge

You can be eligible for this program if your school falsely certified your eligibility for loans or you were a victim of identity theft. To qualify for this program, you must have obtained any of the following loans:

  • William D. Ford Federal Direct Loan (Direct Loan) Program
  • Federal Family Education Loan (FFEL) Program

Unpaid Refund Discharge

Your loan will be partially discharged if you withdrew from school after receiving a loan and your school didn’t pay a refund owed to the loan lender. You will be eligible for this program if you have obtained any of the following loans:

  • William D. Ford Federal Direct Loan (Direct Loan) Program
  • Federal Family Education Loan (FFEL) Program
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