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Loan discharge and forgiveness

Overview

In certain circumstances, you may have your Federal student loan discharged or forgiven. Discharge of your student loan means that you are no longer expected to repay your loan. Forgiveness of your student loan means that you may not be required to repay part or all of your student loan depending on specific requirements. 

Your loan servicer will be able to help determine if you qualify for a discharge or forgiveness of your Federal student loan. If you do not know who your loan servicer is, please sign on to NSLDS. Once you have signed into your NSLDS account, click on each loan to find your loan servicer contact information. 

After you submit a discharge or forgiveness application and any required documentation, be sure to follow up to verify the status of your request. Keep making payments on your loan until you receive a notice that the discharge or forgiveness has been approved. Also, it is important that you keep copies of all forms, documents, and correspondence concerning your request.

Discharge and forgiveness summary chart

The chart below lists the types of discharge and forgiveness options available for Federal student loans.

Discharge and Forgiveness Options Chart

Discharge
Condition

Eligible Loans

Eligibility
Requirements

To Apply

Closed School Discharge 

  • 100% amount discharged 

  • Direct Loans

  • Federal Family Education Loan (FFEL) Program Loans

  • Perkins Loans

  • Your school closes while you’re enrolled, and you do not complete your program because of the closure. If you were on an approved leave of absence, you are considered to have been enrolled at the school.

  • Your school closes within 120 days after you withdraw.

 

For more information and to apply, contact your loan servicer.

Total and Permanent Disability Discharge (TPD)

  • 100% amount discharged

 

 

  • Direct Loans 

  • Federal Family Education Loan (FFEL) Program Loans 

  • Perkins Loans

  • If you are a veteran, submit documentation from the U.S. Department of Veterans Affairs (VA) showing that the VA has determined you are unemployable due to a service-connected disability.

  • If you are receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, 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.

  • You may submit certification from a physician that you are totally and permanently disabled. Your physician must certify that you are unable to engage in any substantial gainful activity by reason of 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.

For more information and to apply for a TPD discharge, go to Total and Permanent Disability Discharge.

 

Death Discharge

  • 100% amount discharged

 

  • Direct Loans 

  • Federal Family Education Loan (FFEL) Program Loans 

  • Perkins Loans 

  • If you, the borrower, die, then your Federal student loan will be discharged.

  • If you are a parent PLUS loan borrower, your loan may be discharged if you die or if the student on whose behalf you obtained the loan dies.

For more information, contact your loan servicer.

Discharge in Bankruptcy (in rare cases)

  • 100% amount discharged

  • Direct Loans

  • Federal Family Education Loan (FFEL) Program Loans

  • Perkins Loans

  • If you file Chapter 7 or Chapter 13 bankruptcy, you may have your Federal student loan discharged in bankruptcy only if the bankruptcy court finds that repayment would impose undue hardship on you and your dependents. 

  • To determine hardship, you must meet each of the following criteria:

    • If you are forced to repay the student loan, you would not be able to maintain a minimal standard of living.

    • There is evidence that this hardship will continue for a significant portion of the loan repayment period.

    • You made good faith efforts to repay the student loan before filing bankruptcy (usually this means you have been in repayment for a minimum of five years).

For more information, contact your loan servicer.

False Certification of Student Eligibility or Unauthorized Payment Discharge

  • 100% amount discharged

  • Direct Loans

  • Federal Family Education Loan (FFEL) Program Loans

  • Your school falsely certified your eligibility to receive a Federal student loan based on your ability to benefit from its training, and you did not meet the ability to benefit student eligibility requirements.

  • The school signed your name on the application or promissory note without your authorization or the school endorsed your student loan check or signed your authorization for electronic funds transfer without your knowledge, unless the proceeds of the loan were delivered to you or applied to charges owed by you to the school.

  • Your student loan was falsely certified because you were a victim of identity theft.

  • The school certified your eligibility, but because of a physical or mental condition, age, criminal record, or other reason, you are disqualified from employment in the occupation for which you were being trained.

For more information and to apply, contact your loan servicer.

Unpaid Refund Discharged

  • Discharge amount is up to the amount that the school was required to return.

  • Direct Loans

  • Federal Family Education Loan (FFEL) Program Loans

  • If you withdrew from school, but the school did not pay a refund that was owed to the U.S. Department of Education for a Direct Loan or to the lender for a FFEL Program loan.

For more information and to apply, contact your loan servicer.

Perkins Loan Cancellation and Discharge (includes Teacher Cancellation)

  • The total percentage that can be canceled depends on the type of service performed. 

  • Perkins Loans

  • Federal Perkins Loan Program cancellations apply to individuals who perform certain types of public service or are employed in certain occupations. 

  • For each complete year of service, a percentage of the loan may be canceled.

For more information and to apply, contact the school that you were attending when you received the student loan.

Teacher Loan Forgiveness

  • The total amount that can be forgiven depends on the type of teaching service performed.

 

  • Direct Loans

  • Federal Family Education Loan (FFEL) Program Loans

  • If you teach full time for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families, and meet other qualifications, you may be eligible for forgiveness of up to a combined total of $17,500 on your Federal student loan.

  • You must not have had an outstanding balance on Direct Loan or Federal Family Education Loan (FFEL) Program loans as of Oct. 1, 1998, or on the date that you obtained a Direct Loan or FFEL Program loan after Oct. 1, 1998.

  • If you are in default on a Federal student loan, you are not eligible for forgiveness of that loan unless you have made satisfactory repayment arrangements with the loan servicer of the defaulted loan.

  • The student loan for which you are seeking forgiveness must have been made before the end of your five academic years of qualifying teaching service.

  • You must have been employed in an elementary or secondary school that is listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits.

  • Your teaching service may qualify if the consecutive five-year period includes qualifying service performed after the 2007–08 academic year at an eligible educational service agency.

  • If your school meets the above requirements for at least one year of your teaching service, but does not meet these requirements during subsequent years, your subsequent years of teaching at the school may be counted toward the required five complete and consecutive academic years of teaching.

For more information and to apply, contact your loan servicer.

Public Service Loan Forgiveness

  • Discharge amount is 100% of the remaining outstanding balance on an eligible Direct Loan. 

 

  • Direct Loans

  • You must work in public service and make 120 qualifying payments while employed full time by a public service employer.

  • Your required 120 payments must be made under one of the following repayment plans:

    • Income-Based Repayment Plan

    • Income-Contingent Repayment Plan 

    • Pay As You Earn Repayment Plan

    • Standard Repayment Plan

 

For more information, please click here.

Chart adapted from Studentaid.ed.gov