Student Loan Forgiveness or Cancellation
What is Student Loan Forgiveness?
Depending on what type of student loans you have and under certain circumstances, the Government has a program(s) that can cancel discharge, or 'forgive' part, or even in some cases all of your student loan debt. The first step is to find out what type of student loans you have.
Check Your Account
You can view most of your federal financial aid history, including Stafford loans, in the National Student Loan Clearinghouse System if you have a Personal Identification Number (PIN). If you don't have one, you can request one at the PIN site.
Circumstances and Conditions for Loan Forgiveness
If you have taken out a loan to help pay for your education, all or part of it may be cancelled (forgiven) for several reasons. You may qualify for total or partial loan forgiveness if:
- The school closed within 90 days of your enrollment and they were unable to finish their program of study.
- The school did not properly qualify your status before they began studies.
- You did not receive a refund that was due to you.
- Your signature was forged.
- The school did not properly evaluate your ability to benefit from the coursework before beginning studies.
- You become totally and permanently disabled.
- If you or the dependent for whom the loan was borrowed, dies
- Your loan is discharged due to bankruptcy. (Typically, student loans cannot be discharged in a bankruptcy.) Consult your legal counsel regarding your particular situation.
Your loan cannot be discharged solely because you believe that the school your child attended did at least one of the following:
- Provided poor training, had unqualified instructors, or inadequate equipment
- Did not provide job placement or other services that it promised; or
- Engaged in fraudulent activities (other than falsely certifying the loan)
- If you believe you are eligible for loan forgiveness, contact the holder of your loan.
Circumstances for Loan Forgiveness / Cancellation
Under certain circumstances, the federal government will cancel all or part of an educational loan. This practice is called Loan Forgiveness. To qualify, you must:
- Perform public service
- Perform volunteer work
- Perform military service
- Teach or practice medicine in certain types of communities
- Meet other criteria specified by the forgiveness program
Public Service Loan Forgiveness
The Public Service Loan Forgiveness Program was created to encourage individuals to enter and continue to work 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.
Volunteer Forgiveness Programs
These volunteer organizations offer loan forgiveness:
AmeriCorps. Serve for 12 months and receive up to $7400 in stipends plus $4725 to be used towards your loan. Call 1-800-942-2677.
Peace Corps. Volunteers may apply for deferment of Stafford, Perkins and Consolidation loans and partial cancellation of Perkins Loans (15% for each year of service). Volunteers make a real difference in the lives of real people with two years of service in more than 70 developing countries. Contact the Peace Corps at 1111 20th St., NW, Washington, DC 20526 or call 1-800-424-8580 or 1-202-692-1845.
Volunteers in Service to America (VISTA). Volunteer with private, non-profit groups that help eradicate hunger, homelessness, poverty and illiteracy. Provide 1700 hours of service and receive $4725. Call 1-800-942-2677 or 1-202-606-5000.
Students who are in the Army National Guard may be eligible for their Student Loan Repayment Program, which offers up to $10,000. (Note, the military and veterans' associations provide many scholarships and tuition assistance programs. See the section on Military Aid for details.)
Teacher Loan Forgiveness
Students who become full-time teachers in an elementary or secondary school that serves students from low-income families can have a portion of their Perkins Loan forgiven under The National Defense Education Act. This program forgives 15% of your loan for the first and second years of teaching service, 20% for the third and fourth, and 30% for the fifth. Contact your school district's administration to see which schools are eligible.
Students who majored in education and teach in Mississippi may be eligible for the William Winter Teacher Scholar Loan. This program forgives one year of your loan in exchange for one year of service (it forgives two years of your loan if you teach in a shortage area). Contact the Mississippi Office of State Student Financial Aid, 3825 Ridgewood Rd., Jackson, MS 39211-6453; 1-601-982-6663.
Legal and Medical Forgiveness
Many law schools forgive the loans of students who serve in public interest or non-profit positions. Contact the National Association for Public Interest Law (1666 Connecticut Ave., Suite 424, Washington, DC, 20009; 1-202-466-3686).
Similarly, groups like the National Health Service Corps offer forgiveness programs to physicians who agree to practice for a set number of years in areas that lack adequate medical care (including remote and/or economically depressed regions). If you're a California resident, contact the Office of Statewide Health Planning and Development (State Loan Repayment Program, Primary Care Resources and Community Development Division, 1600 Ninth St., Room 440, Sacramento, CA 95814; 1-916-654-1833), or a similar agency in your state.
Many hospitals and private healthcare facilities use loan forgiveness to recruit occupational and physical therapists. Contact the American Physical Therapy Association (1111 North Fairfax St., Alexandria, VA 22314-1488; 1-800-999-2782) or the American Occupational Therapy Association (P.O. Box 31220, 47200 Montgomery Lane, Bethesda, MD 20824-1220; 1-301-652-2682)
Other Paths to Forgiveness
Students who receive the Michael Murphy Loan to study law enforcement, law, probation and parole, penology, or other related fields are eligible to work off one-fifth per year as a State Trooper (or related law enforcement official) in Alaska. Contact the Alaska State Troopers, Director's Office Scholarship Fund, 5700 East Tudor Rd., Anchorage, AK 99507; 1-907-269-5511.
Maryland state and local government employees who earn less than $40,000 gross annually may be eligible for a loan assistance/repayment program to study law, nursing, physical and occupational therapy, social work and education. Contact the Maryland State Scholarship Administration, 16 Francis St., Annapolis, MD 21401; 1-410-974-2971 x146.
Perkins loans can be cancelled for full-time service as a teacher in a designated elementary or secondary school serving students from low-income families, special education teacher (includes teaching children with disabilities in a public or other nonprofit elementary or secondary school), qualified professional provider of early intervention services for the disabled, teacher of math, science, foreign languages, bilingual education, or other fields designated as teacher shortage areas, employee of a public or non-profit child or family service agency providing services to high-risk children and their families from low-income communities, nurse or medical technician, law enforcement or corrections officer, staff member in the educational component of a Head Start Program, service as a Vista or Peace Corps Volunteer and service in the Armed Forces (up to 50% in areas of hostilities or imminent danger).
See also the U.S. Department of Education's pages on Cancellation/Deferment Options for Teachers and Cancellation for Childcare Providers at www.ed.gov