Do You Qualify for Student Loan Forgiveness, Loan Cancellation or Loan Discharge?

With all the misinformation out there and predatory companies that make it appear as though anyone can qualify for forgiveness, cancellations or discharges on student loans, it can be very difficult to see if any of these options will work in your situation.

To simplify the process, we developed the following at-a-glance reference chart to help you determine if you qualify for any of the five most common options.

Five Most Common Loan Forgiveness, Cancellation and Discharge Options At-A-Glance

GENERAL NOTES

OPTIONS ARE AVAILABLE FOR individuals who meet the criteria and provide the required qualification proof.  Please note that some loan forgiveness, cancellations and discharges may require payments, some options leave you responsible for paying taxes on the forgiven loan balance and most require documentation to support your qualifications.

OPTIONS ARE NOT AVAILABLE FOR individuals who are unable to obtain work in their field of study,  loan borrowers who are unhappy with the school or their education, or individuals who did not complete their education (exception for school closure) and were denied a full or partial refund from the school.

BEWARE IF a company advertises that they can get your loans discharged or forgiven for a fee you should avoid them.  Do your research. If you qualify for any of the following options, these can be done through your loan servicer at no additional charge.

 

START HERE

Do you have a federal student loan?

Yes? Click on the tabs below to explore the five most common options at-a-glance.

No?  Stop here.  Private loans do not qualify for ANY federal student loan forgiveness programs, cancellations or discharges.  Contact your loan servicer for options.

Unsure? Find out at NSLDS OR contact your loan servicer.

Public Service Loan Forgiveness (PSLF) 

The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer (payments and employment do not have to be consecutive).

1. Are you currently directly employed full time (30+ hours week) at one of these three types of organizations?

  • Government at any level (federal, state, local or tribal)
  • A 501(c)(3) tax-exempt not-for-profit organization
  • A not-for-profit that is not tax-exempt but has a primary purpose of providing certain types of qualifying public services such as emergency, military, public safety, law enforcement, public health, etc.

(Not sure if you work for a qualified employer?  Contact your servicer to confirm. Don’t know who your servicer is?  Check here.

Yes?   Continue to number 2.

No? You do not qualify for this option.

2. Have you made 120 qualifying payments in qualifying repayment plan?

  • Qualified payments do not have to be consecutive and are payments made after Oct. 1, 2007, under a qualifying repayment plan that are made for the full billed amount and submitted no later than 15 days after due date.
  • Qualified repayment plans: Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Graduated, Extended, Income-Sensitive. Standard 10-year (NOTE: 120 monthly payments = 10 years, so there may be $0 left to forgive).

Yes? Begin your PSLF application here.

No? You do not qualify for this option.

Income Driven Repayment (IDR) Remaining Loan Balance Forgiveness

Depending on when you first borrowed and the IDR plan you choose, you can become eligible for student loan forgiveness on the remaining loan balance AFTER 20–25 years of on-time payments.

1. Is your loan currently in any IDR plan?


IDR plans include IBR (Income-Based Repayment), ICR (Income-Contingent Repayment), PAYE (Pay As You Earn) and REPAYE (Revised Pay As You Earn).

YES? Continue to number 2.

NO? You do not qualify for this option.

Don’t know or want to enter an IDR plan? Contact your servicer for details.  Don’t know who your servicer is?  Check here.

2. The IDR plan of your loan will determine the steps for you to proceed with forgiveness. Find the loan balance forgiveness timeframe for your plan below and continue to number 3.

IBR Depending on when your loan was disbursed, you need to make regular on-time payments for 20 to 25 years before remaining balance is forgiven.  Forgiven loan balance may be taxable as income.

ICR After 25 years of on-time payments, any remaining balance is forgiven.  Forgiven loan balance  may be taxable as income.

PAYE After 20 years of regular on-time payments, any remaining balance is forgiven.  Forgiven loan balance may be taxable as income.

REPAYE For undergraduate loans, after 20 years of regular on-time payments, any remaining loan balance is forgiven and may be considered taxable income.  For graduate loans, after 25 years of regular on-time payments, any remaining loan balance is forgiven and may be considered taxable.

3. Have you made all required payments in the 20 to 25-year timeframe for your IDR plan?

YES? Contact your servicer to confirm and inquire about loan balance forgiveness.  Don’t know who your servicer is?  Go here.

NO? Continue with your IDR plan until the required number of payments have been met.

NOTES

  • If you are on an IDR Plan, mark your calendar to renew your plan yearly and provide any required supporting documentation.
  • The forgiven remaining loan balance will likely be taxed as income for the year it is forgiven, meaning you may have to pay taxes on the forgiven amount.

Teacher Loan Forgiveness Program

The Teacher Loan Forgiveness Program forgives up to $17,500 on subsidized and unsubsidized Direct and Federal Stafford Loans.  This option is available to qualified teachers who have worked full-time for a minimum of five consecutive academic years in a qualified low-income school or educational service agency, and who meet other qualifications.  Full qualifications are here.

1. Do you meet the above criteria?

Yes? Begin your application here.

No? You do not qualify for this program.

Closed School Discharge

You may be eligible for a 100% discharge of your Direct Loans, Federal Family Education Loan (FFEL) Program, or Federal Perkins Loans if the school you took out the loan to attend closes while you’re enrolled or closes within 120 days from your withdrawal.

1. Has the school you took out a federal student loan closed or announced closure?

YES? Continue to number 2.

NO?  You do not qualify for this option.

2. Are currently enrolled or has it been 120 days or less since your withdrawal?

YES? Continue to number 3.

NO? You do not qualify for this option.

3. Are you completing a teach-out agreement with the school, transferring credits or hours earned at this school to another school?

YES? Stop here.  You do not qualify for this option.

NO? Continue to number 4.

4. Have you completed ALL coursework for the program (even if you have not received a diploma or certificate)?

YES? Stop here.  You do not qualify for this option.

NO? Contact your loan servicer for the Closed School Discharge application.  Don’t know who your servicer is?  Check here.

Total and Permanent Disability Discharge (TPD)

To receive a total and permanent disability (TPD) discharge you must have a qualified total and permanent disability.

1. Can you submit certification from a physician that you are totally and permanently disabled?


Physician must certify you are unable to engage in any substantial gainful activity due to a medically determinable physical or mental impairment that can be expected to result in death, has lasted for a continuous period of not less than 60 months, or can be expected to last for a continuous period of not less than 60 months.

YES? Visit disabilitydischarge.com to begin the process.

NO? Continue to number 2.

2. Are you a disabled veteran that can submit documentation from the U.S. Department of Veterans Affairs (VA) showing that the VA has determined that you are unemployable due to a service-connected disability?

YES? Visit disabilitydischarge.com to begin the process.

NO? Continue to number 3.

3. Are you are receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits and can submit a Social Security Administration (SSA) notice of award for SSDI or SSI benefits stating that your next scheduled disability review will be within five to seven years from the date of your most recent SSA disability determination?

YES? Visit disabilitydischarge.com to begin the process.

NO? You do not qualify for this option.

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