:: Can My Loans Be Discharged or Forgiven? ::
Under certain circumstances, all or a portion of your federal student loan debt may be discharged (canceled) or forgiven. Your loan can’t be discharged because you didn’t like the school or the program of study, or because you didn’t find a job after completing the program of study.
Remember that your student loan is your obligation. Unless forbearance has been granted, you must continue to make payments until you receive written confirmation that discharge or forgiveness has been approved. There are several types of discharge and forgiveness and each one has specific requirements and guidelines. For further information on the following options, contact your loan servicer or speak to one of our specialists.
Student Loan Discharge & Forgiveness
Total and Permanent Disability Discharge
Your federal student loan debt may be discharged if you become permanently disabled. Effective July 1, 2013, a single discharge application must be submitted to the U.S. Department of Education (ED) to discharge all Title IV loans and/or TEACH Grant service obligations.
To begin this process, you can apply online at www.disabilitydischarge.com or contact ED at 888.303.7818 (seven days a week from 8:00 a.m. to 8:00 p.m. Eastern) or by email at DisabilityInformation@Nelnet.net. ED will provide you with the information and forms necessary to file for discharge, and will notify your loan servicer(s) regarding your discharge application.
You may demonstrate total and permanent disability in one of three ways:
- If you've been determined by the Secretary of Veterans Affairs (VA) to be unemployable or 100 percent disabled due to a service-connected condition, you may submit a discharge application with documentation from the VA.
- If you are receiving Social Security Disability Insurance (SSDI) program or Supplemental Security Income (SSI) program benefits with the next scheduled disability review within five to seven years from the date of your most recent Social Security Administration (SSA) disability determination, you may submit a discharge application with documentation of this status from the SSA.
- You may submit a discharge application certified by your doctor and submitted within 90 days of the doctor's certification.
If your loans are discharged based on documentation from the SSA or a doctor's certification, they will be assigned to the U.S. Department of Education before your debt is permanently canceled.
If you receive a loan that was certified before the date your physician certified the discharge application, any proceeds of the loan that will be disbursed after the physician's certification must be canceled. If the disbursement was already made, it must be returned to the loan servicer within 120 days of the disbursement date for you to maintain your discharge eligibility.
Your student loan debt, as well as any PLUS loans your parents took out on your behalf, will be canceled if documentation of your death is submitted to your loan servicer. Acceptable documentation is an original death certificate, a certified copy of the original death certificate or an accurate and complete photocopy of the original or certified copy of the death certificate.
School Closure Discharge
If you received a student loan at a school that closed before you completed your studies, you may be eligible for discharge of your loan. A federal student loan can be discharged for school closure if you were enrolled when the school closed and couldn't complete the program of study because of the closure. If you were on an approved leave of absence, you are considered to have been enrolled at the school. If the school closed within 90 days after you withdrew, you are also considered eligible for discharge.
You aren't eligible for a discharge if you are completing a comparable educational program at another school. If you complete a comparable program of study at another school after your loan is discharged, you may have to pay back the amount of the school closure discharge. If you haven't received a diploma or certificate but have completed all of the coursework for the program, you aren't eligible for the discharge.
False Certification Discharge (Disqualifying Status, Ability to Benefit & Identity Theft)
Your loan can be discharged if you didn't have a high school diploma or its equivalent and the school didn't properly test you to measure your ability to benefit from the training, or you failed the test.
You may also be eligible for false certification discharge if you had a disqualifying status that prevented you from meeting the legal requirements of your state to enroll in the program or work in the career for which you were training, regardless of whether you had a high-school diploma or equivalent.
A loan may also be discharged if it was falsely certified in your name as a result of identity theft. To prove identity theft, you'll need to present reasonably persuasive evidence to the loan servicer. (There isn't an identity theft discharge application yet. We recommend you complete and submit the Federal Trade Commission’s ID Theft Affidavit PDF. Contact your loan servicer for information about the specific documentation they require.
Unpaid Refund Discharge
You may qualify for partial discharge of a student loan if your school failed to pay a tuition refund required under federal law. Only the amount of the unpaid refund will be discharged. You may qualify for this discharge regardless of whether the school is closed or open.
Forged Signature Discharge (Unauthorized Signature)
If you believe someone forged your signature on the loan application, promissory note or authorization for electronic funds transfer, you may qualify for a loan discharge. You must provide five different samples of your signature, with at least two of the samples on documents that are clearly dated within a year before or after the date of the contested signature.
Spouses and Parents of Sept. 11, 2001 Victims
Spouses or parents of a victim of the Sept. 11, 2001 terrorist attacks may be eligible to have any of the loans owed on Sept. 11, 2001 discharged. Consolidation loans received after Sept. 11, 2001 to pay off loans received prior, may also be eligible for discharge.
Bankruptcy (Undue Hardship) Discharge
Bankruptcy doesn't automatically discharge your student loan debt. Your loans may only be discharged in a separate proceeding in the bankruptcy court called an Adversary Proceeding. The grounds for such a discharge require you to prove in a trial to the court that payment of your loans will result in an undue hardship on you and/or your dependents.
Teacher Loan Forgiveness Program
All or a portion of your student loan debt may be repaid if you're eligible for the Teacher Loan Forgiveness Program. Congress created the program in 1998 to encourage individuals to enter into and continue the teaching profession within designated educational service agencies, and elementary and secondary schools that serve low-income families.
Child Care Provider Loan Forgiveness Program
No new applications are being accepted for this program because no additional funding has been provided. Applications for renewal benefits are available if you have previously been granted forgiveness under this program.
All of your student loan obligations may be forgiven if you're eligible for the Child Care Provider Loan Forgiveness Program. You must be a new borrower on or after October 1, 1998, and meet the required criteria. If you qualify, the Department of Education will pay on a first-come, first-served basis, subject to the availability of funds.
Other Repayment and Forgiveness Options*
*These programs are not administered by OCAP.
Army Chaplaincy Loan Repayment Program
The Army Chaplaincy Loan Repayment Program pays up to $20,000 over three years toward qualified loans incurred while pursuing the professional degree which qualifies a person for the chaplaincy. For further information, visit the Army Chaplain Corps website or call 866.684.1571.
Civil Legal Assistance Attorney Student Loan Repayment Program
The Civil Legal Assistance Attorney Student Loan Repayment Program (CLAARP) encourages qualified individuals to enter and continue employment as civil legal assistance attorneys. Under CLAARP, a Perkins, Federal Family Education Loan (FFEL) or Direct Loan (DL) Program borrower with one or more eligible loans, can sign a Dept. of Education service agreement and serve as a civil legal assistance attorney for a period of not less than three years to receive up to $6,000 in student loan repayment each year. The aggregate total of payments may not exceed $40,000. Visit the CLAARP site for applications and more information.
Dental Loan Repayment Revolving Fund
A revolving fund has been established by the State Department of Health to be designated as the Dental Loan Repayment Revolving Fund for the purpose of repaying dental student loans. Contact the State Department of Health, Dental Health Services at 405.271.5502 for details.
Faculty Loan Repayment Program
The Faculty Loan Repayment Program (FLRP) pays up to $40,000 for a two-year service obligation to eligible health professions faculty members from disadvantaged backgrounds. Participants should also receive matching funds from their employing educational institution. Visit the FLRP website for applications, deadlines and additional information.
Indian Health Service Loan Repayment Program
The Indian Health Service Loan Repayment Program (IHSLRP) pays up to $24,000 per year for two-years of continuous, full-time service at Commissioned Corps, Civil Service and Direct Tribal Hire facilities or in an approved Indian health program. Visit the IHSLRP website for applications, deadlines and additional information.
National Health Service Corps
The National Health Service Corps (NHSC) Loan Repayment Program pays up to $50,000, tax-free, to primary care medical, dental and mental health clinicians in exchange for two years of service at an approved site in a Health Professional Shortage Area. Visit the NHSC website for applications, deadlines and additional information.
National Institutes of Health Loan Repayment Programs
The National Institutes of Health (NIH) Loan Repayment Programs (LRP) encourage individuals to pursue research careers by repaying up to $35,000 of their qualified student loan debt each year. Visit the NIH LRP website to verify eligibility, view applications and find additional information.
Navy Health Professions Loan Repayment Program
The U.S. Navy's Health Professions Loan Repayment Program (HPLRP) provides a maximum yearly loan repayment of $40,000 (minus about 25 percent federal income taxes). Payment is sent directly to the lending institution. More information is available on the HPLRP website.
Nursing Education Loan Repayment Program
The Nursing Education Loan Repayment Program (NELRP) aims to alleviate the critical shortage of registered nurses in non-profit health care facilities. The program pays 60 percent of an eligible participant's qualifying education loan balance for two years of service. For an optional third year, participants receive an additional 25 percent of their original qualifying education loan balance. Visit the NELRP website for applications, deadlines and additional information.
Public Service Loan Forgiveness Program
The Public Service Loan Forgiveness Program was created to encourage individuals to enter and continue working full-time in public service jobs. Under this program, you may qualify for forgiveness of the remaining balance due on your eligible federal student loans after you have made 120 payments on loans under certain repayment plans while employed full time by certain public service employers. More information is available on the Public Service Loan Forgiveness site.
SEMA Loan Forgiveness Program
The Specialty Equipment Market Association (SEMA) loan forgiveness program aids recent graduates who have worked in the automotive industry for at least one year, work for a SEMA-member company and have outstanding student loans. Additional information is available on the SEMA Loan Forgiveness Program page.
Veterinary Medicine Loan Repayment Program
The Veterinary Medicine Loan Repayment Program (VMLRP) pays up to $25,000 each year towards qualified educational loans of eligible veterinarians who agree to serve in National Institute of Food and Agriculture (NIFA) designated veterinarian shortage situations for three years. Visit the NIFA Loan Repayment Program website for applications, deadlines and additional information.
Who do I contact about loan discharge or forgiveness?
If you think your loans are eligible for discharge or forgiveness and have questions, contact our Default Prevention department at WeCanHelp@ocap.org, 800.833.4973 (toll free) or 405.234.4352.