Student Loan Forgiveness, Cancellation, and Discharge

Managing your student loans can be overwhelming, but in certain situations, your federal student loans may be reduced, or even eliminated through federal programs that offer forgiveness, cancellation or discharge. Below you will find an overview of what each term means and the types of relief that may be available to you.

 

    Forgiveness Programs

    Public Service Loan Forgiveness (PSLF):

    Forgives remaining balance on a borrower's Direct Loans after the borrower has made 120 qualifying monthly payments under a qualifying repayment plan while working full time for a qualifying employer.  

    • For PSLF purposes, full time is considered an average equal to at least 30 hours per week.
    • The 120 qualifying payments do not need to be consecutive. 
    Ombudsman Tip: Certify your employment every year and whenever you change employers to stay on track for loan forgiveness under PSLF.

    To apply or learn more about PSLF.



    Teacher Loan Forgiveness:

    For teachers working full-time in a low-income elementary or secondary school, or educational service agency.

    • Must teach for full-time for five complete and consecutive years
    • Meet other qualifications.
    • May forgive up to $17,500 on Direct Subsidized and Unsubsidized loans.
    Ombudsman Tip: You cannot receive credit toward Teacher Loan Forgiveness and PSLF for the same period of teaching. It is important to consider which program best fits your long-term financial goals before applying.


    To apply or learn more about Teacher Loan Forgiveness. 



    Income Driven Repayment (IDR) Forgiveness:

    Remaining balances on student loans that are repaid under an IDR Plan are forgiven after borrowers make a certain number of payments. 

    • IDR plans base your monthly student loan payment amount on your income and family size, which in return may reduce your monthly payment.
    • Loan forgiveness timeline and monthly payment depend on which IDR Plan the borrower chooses.
    • Forgiven balance may be taxable depending on IRS rules at the time.
    Ombudsman Tip: You must remember to recertify your income and family size each year to stay eligible. You can also recertify or ask for a plan recalculation when your income or family size changes before your recertification date.


    To apply or learn more about IDR Forgiveness.

     

     

      Discharge Programs

      Borrower Defense to Repayment:

      • If your school misled or engaged in misconduct related to your loan or education
      • Approved applications can lead to partial or full discharge of your federal student loans.

      Ombudsman Tip: Provide thorough documentation of your communications, enrollment, and any promises made by your school to strengthen your application. Include as much detail and information as possible to your application.

      Learn more about BDTR.


      Total and Permanent Disability (TPD) Discharge:

      • Available if you are unable to work due to a permanent disability.
      • Provide documentation from either the U.S. Department of Veterans Affairs (VA), the Social Security Administration (SSA), or an authorized medical professional.

      Learn more about TPD Discharge.



      Closed School Discharge:

      • If your school closes while you are enrolled or shortly after you withdraw.
      • You have Direct Loan, Federal Family Education (FFEL) Program loan, or Federal Perkins Loan.

      Learn more about Closed School Discharge.



      Bankruptcy Discharge:

      • Student loan discharge through bankruptcy is rare but possible, usually requiring you to prove "undue hardship" in court. 
      • The process often involves filing an adversary proceeding (a separate lawsuit within your bankruptcy case).
      • Even if full discharge isn't granted, courts may allow for a partial discharge or modified repayment terms. 

      Learn more about Bankruptcy Discharge. 



      Death Discharge:

      • If the borrower or the student on whose behalf a PLUS loan was taken out passes away.
      • Applies to Direct Loan, Federal Family Education Loan (FFEL) Program loan, or Federal Perkins Loan.

      Learn more about discharge due to death and what documentation the loan servicer would need.

       

       

        If You Are a Parent Borrower

        A Parent PLUS Loan can also be forgiven or discharged if:

        • The borrower passes away.
        • The student on whose behalf the PLUS loan was taken out for passes away.
        • The borrower or student on whose behalf the loan was obtained for becomes totally and permanently disabled.
        • The student on whose behalf the loan was obtained for couldn’t complete their program because the school closed.
        • Your eligibility to receive the loan was falsely certified by the school.
        • The student on whose behalf the loan was obtained for withdrew from school, but the school didn’t refund your loan money that it was required to pay under applicable laws and regulations.
        • You reach 25 years in repayment on a Direct Consolidation Loan on the Income-Contingent Repayment (ICR) plan.
        • You work in public service and apply for Public Service Loan Forgiveness (PSLF)

          Financial Freedom is Possible

          Stay Safe from Potential Scams!

          There are many legitimate federal student loan forgiveness programs, but they all require an official application, program requirements, and long processing times. Legitimate programs are free, and some require years of qualifying payments or service. Always apply through Studentaid.gov.

          • Never pay upfront fees for student loan forgiveness.
          • Be cautious of calls, texts, or emails promising “instant” or “special” forgiveness.
          • No one can guarantee faster processing.
          • Only use official websites ending in .gov for legitimate information.
          • If it sounds too good to be true, it probably is.

           

            Still Have Questions?

            Contact the Student Loan Ombudsman directly here.