Student Loan Debt Forgiveness

student loan forgiveness

Student loan debt forgiveness is rare, but it does exist in certain situations. 

"I can’t pay for my loans" is not a valid reason to seek and qualify for loan forgiveness from your lender. If you want to have your student loan responsibility discharged, you first need to make sure you fit into one of the pre-established categories that qualify you for loan forgiveness.

Circumstances for Debt Forgiveness

If you're employed in certain public service professions and have a Federal Perkins loan, you might qualify for partial or total debt forgiveness.

The rules vary depending on your profession, your status (full or part time), the type of loan you have, and many other factors. Therefore, it's important that you talk with a qualified loan officer before you make any filings or applications.

Occupations that qualify include law enforcement, nursing, U.S. armed forces employees, some child and family worker positions, and volunteer work in the Peace Corps.

Teachers might also qualify for a student loan debt forgiveness program if they have been employed by a low-income school for at least five years. They must also meet several other requirements, including being current on payments.

Loan forgiveness for qualifying teachers is partial. For example, elementary teachers may receive up to $5,000 in loan forgiveness, while special education and secondary teachers may receive up to $17,500 in loan forgiveness.

Total and Permanent Disability (TPD) Discharge is another reason for loan forgiveness. Yet, you’ll have to meet some stiff requirements, such as proving that the illness or disability has lasted or will last for at least 60 months or that it will result in death.

You will have to show that this disability will prevent you from performing any type of work – and this needs to be verified by a physician. Veterans can qualify for TPD discharge if their disability is confirmed by the Secretary of Veterans Affairs.

Student Loans and Bankruptcy

In some cases, you might be able to include your student loans in your bankruptcy filings. The key word here is "some," as qualifying for loan discharge through bankruptcy is no easy task.

First, you will have to prove extreme hardship – which means showing that if you continue to pay your loans, you won’t be able to maintain a very basic standard of living.

Also, you’ll have to show that you’re up to date on payments and that you’ve made a sincere effort to pay off those loans. According to the Federal Student Aid website, that usually means you have been repaying your student loans for at least five years without defaulting.

For more information on student loans, please see the articles below.

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