Options for Student Loan Debtors – Part 3: Federal Student Loan Discharge and Forgiveness Options

Student Loan PaymentsIf discharging your student loan indebtedness in a bankruptcy is not a feasible option and your student loan is a federal student loan, you may want to explore the following discharge and forgiveness programs:

  1. Total and Permanent Disability Discharge – If you are unable to engage in gainful employment and expected to remain in that condition for the foreseeable future, you can provide information to the U.S. Department of Education to prove your total and permanent disability and your student loans may be discharged.
  2. Discharge for Some Students – You may be eligible for a discharge of Direct Loan or FFEL Program loans if your school falsely certified your eligibility to receive the loan based on ability to benefit from its training; if you were a victim of identity theft; or if the school certified eligibility, but because of a physical or mental condition, age, criminal record, or other reason you were disqualified from employment in the occupation in which you were being trained.
  3. Teacher Forgiveness – If you are a teacher and did not have an outstanding balance on a Direct Loan or FFEL Program loan on October 1, 1998, and have been teaching full-time in a low-income elementary or secondary school or educational service agency for 5 consecutive years, you may be able to have as much as $17,500 of your subsidized or unsubsidized loans forgiven.
  4. Public Service Loan Forgiveness – If you are employed in certain public service jobs and make 120 timely monthly payments on Direct Loans after October 7, 2007, the remaining balance may be forgiven. This will become more relevant as we approach November 2017, when the first people reach the 120 month mark.
  5. Service Related Discharge and Cancellation – There are various discharge and cancellation programs that may be available to people who have served in AmeriCorps, Peace Corps, Volunteers in Service to America (VISTA), Army National Guard, National Health Service Corps, and Nurse Corps.

For more information on debtor-creditor issues, please contact Charles Smith or Nicole Hughes at Telpner Peterson Law Firm, LLP today at (712) 325-9000.

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