Loan Discharge
(also known as Loan Cancellation or Forgiveness)
Under certain circumstances, your student loan may be discharged or canceled. In other words, you will not have to repay it.
If you think you are eligible for loan discharge
- Contact your loan holder.
- Do not stop making payments until you receive written notification that your loan has been canceled.
If you are unable to obtain a discharge application from your loan holder, download the form from National Council of Higher Education Loan Programs (NCHELP).
There are a number of reasons why your loan may be discharged:
Disability Discharge
Subsidized and unsubsidized Federal Stafford Loans, Federal PLUS Loans, and Federal Consolidation Loans may be discharged if the borrower becomes totally and permanently disabled (i.e., unable to work and earn money).
Spousal Consolidation Loan Disability Discharge
If one of two borrowers of a spousal consolidation loan becomes totally and permanently disabled, a portion of the consolidation loan, may be discharged.
Death Discharge
Subsidized and unsubsidized Federal Stafford Loans, Federal PLUS Loans, and Federal Consolidation Loans may be discharged if the borrower (or student for whom the parent borrowed a PLUS Loan) dies.
Spousal Consolidation Loan Death Discharge
Upon the death of one of two borrowers of a spousal consolidation loan, a portion of the loan may be discharged.
False Certification Discharge
Subsidized and unsubsidized Federal Stafford Loans and Federal PLUS Loans may be discharged if the school falsely certified the borrower's eligibility for the loan. To qualify for a false certification loan discharge, the borrower (or student for whom the parent borrowed a PLUS Loan) must have received, on or after January 1, 1986, a portion or all of the loan to attend a school that:
- Admitted the student when he or she did not meet the requirements for admission on the basis of his or her ability to benefit from the education,
- Admitted the student when he or she had a condition that prevented him or her from meeting certification requirements necessary to obtain employment in his or her field of study,
- Signed the borrower's name on the application and/or promissory note without the borrower's authorization, or
- Endorsed the borrower's name on the loan check or signed the authorization for electronic funds transfer or master check without the borrower's consent.
Closed School Discharge
Subsidized and unsubsidized Federal Stafford Loans and Federal PLUS Loans may be discharged if the borrower (or student for whom the parent borrowed a PLUS Loan) received, on or after January 1, 1986, a portion or all of the loan to attend a school that closed before the student could complete his or her program of study. The student must have been unable to complete the program because
- The school closed while the student was enrolled,
- The school closed while the student was on an approved leave of absence, or
- The student withdrew within 90 days of the school closing.
Unpaid Refunds Cancellation:
Subsidized and unsubsidized Federal Stafford Loans and Federal PLUS Loans may be canceled if :
- The borrower (or student for whom the parent borrowed a PLUS Loan) received the loan on or after January 1, 1986,
- The student withdrew from, was terminated from, or did not attend the school, and a refund of unearned loan funds should have been made, and
- The refund was not made to the loan holder.
Occupational Loan Forgiveness Programs
These programs exist for certain professionals that might provide alternative options if you are seeking to discharge your loan:
