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10 Loan Forgiveness Programs to Discharge Student Loans
Higher education is expensive in the United States, and because so many aspiring professionals do not have the funds needed to fully pay for college, student loans are often the next available option aside from grants and scholarships. However, student loan repayment can lead to significant debt, and because of this, many former students seek loan forgiveness or loan cancellation.
While these options are not available to everyone with student loan debt, certain circumstances may qualify an individual for forgiveness, discharge, or cancellation.
Higher education is expensive in the United States, and because so many aspiring professionals do not have the funds needed to fully pay for college, student loans are often the next available option aside from grants and scholarships. However, student loan repayment can lead to significant debt, and because of this, many former students seek loan forgiveness or loan cancellation.
While these options are not available to everyone with student loan debt, certain circumstances may qualify an individual for forgiveness, discharge, or cancellation.
Permanent Disability Discharge
An individual who becomes fully disabled, either mentally or physically, may qualify to have the remaining balance on their student loan canceled. Documentation proving disability must be provided to qualify, and once the loan is discharged, the US government can and may monitor the individual’s finances and disability benefits for three years. If requirements are not met during this monitoring period, the loan may be reinstated. Disabled veterans can typically have their student loans discharged, and the process is usually completed automatically unless the veteran declines due to state tax liabilities.Borrower Defense to Repayment
If a student borrower has been defrauded by the college they attend, the student may qualify for a debt relief program. The individual will first need to complete and file a Borrower Defense to Repayment claim with the Department of Education and if the student qualifies, they may have their loans automatically discharged. If the institution involved was part of a widespread fraud scandal or misrepresentation claim, approval is much more likely to be granted.Institution Closure Discharge
If the student’s college or university closes during their attendance (which must be within 120 days of enrolling or leaving without a degree), the student might qualify for student loan discharge. If the conditions are met, the student should then contact the company servicing their loan, explain the situation, and begin the discharge application process. Once approved, the student will no longer be expected to make loan payments and in some cases, may even be refunded for some of their past loan payments.Perkins Loan Cancellation
Student borrowers who have Perkins loans may have up to the complete balance canceled if they are employed in a public service position for greater than five years. In most situations, a borrower who has been approved can expect to see their loan discharged as a percentage for each year the borrower has worked in their position. Additionally, there is a teacher’s benefit for Perkins borrowers who work full-time as teachers in low-income public schools or those who teach specific subjects. Qualifying individuals may have their loan discharged.Teacher Loan Forgiveness
Along with the Perkins teaching benefit, teachers who have been employed full-time in low-income schools for more than five years can have up to $17,000 in federal loans forgiven. However, this forgiveness program applies only to teachers who took out student loans after October 1998.Loan Forgiveness for Public Service
Borrowers who are working as a public service professional may qualify for loan forgiveness if certain conditions are met. Typically, if a public service employee makes more than 120 payments on their student loans, they may become eligible to have the remaining loan balance forgiven. This program works alongside an income-driven repayment program, and enrollment in the program is required for this type of loan forgiveness.Nursing Loan Forgiveness
A borrower who has become a nurse may have several options when it comes to student loan forgiveness. The individual can look into any of the following forgiveness programs to determine eligibility.- NURSE Corps Loan Repayment– This program may pay up to 85% of a nurse’s unpaid student debt if qualified
- Perkins Loan Cancellation
- Public Service Loan Forgiveness– Typically, the same criteria that applies to other public service professionals will apply to nurses. This route is most common, being that not very many nurses have Perkins loans and the NURSE Corps program is difficult to qualify for.
