The high cost of a college education has left many people with outstanding debt that stays with them for years. Unfortunately, some economic hardships, such as losing a job or not making enough money, has made many people default on their student loans. Fortunately, if you are having problems repaying your student loans, you may be able to get your debt forgiven, discharged or cancelled.
Types of Loan Discharges
There are several ways in which you may be able to get your student loans discharged. You may qualify for a discharge because of:
- Schools that have Closed
- A Total, Permanent Disability
- Filing for Bankruptcy
- False Certification of Student Eligibility or an Unauthorized Payment
- Refunds that were Not Paid
In most of these cases, you have to apply to have your loan discharged and many of these discharges only apply to loans that were made on or after January 1, 1986. Usually, the entire amount of the loan will be discharged if your application is approved. However, for refunds, the college is only liable to pay any amounts they did not refund you.
Types of Loan Forgiveness
Your student loans can also be forgiven instead of discharged or cancelled. Usually, student loans are forgiven if you are:
Working in Public Service
There are certain qualifications that have to be made in order for your loan to be forgiven. For teachers, they must work in a low-income elementary or secondary school for five consecutive years. If approved, only $17,500 can be forgiven from their debt on a Direct Loan or a FFEL Program loan that were made on or after October 1, 1998.
For certain public service workers, the remaining balance of their loan can be forgiven if they have already made 120 payments under certain repayment plans. The forgiveness only applies to a Direct Loan that was made after October 1, 2007.
If you took out a Perkins Loan to pay for your education, you may be able to have it cancelled if you are having a difficult time paying the balance you owe. However, to qualify for a cancellation, you need to be employed as:
- A Teacher
- A Nurse
- A Medical Technician
- Work in the fields of either law enforcement or corrections
- Be employed by Head Start
- Work in the fields of children or family services
- Work as a professional in the field of early intervention
- Serve in the armed forces and be stationed a hostile area
- Be a Peace Corps, VISTA or ACTION volunteer
For each year you worked in one of these fields, a certain percentage of the loan may be cancelled. The percentage forgiven is also dependent on the type of service you’ve done. Unlike a loan discharge or forgiveness, there isn’t an application for a Perkins Loan cancellation. You have to contact the school you attended where you were given the loan.
If you are having difficulties paying back your student loans, contact an attorney at SM Law Group with questions about having your loans discharged, forgiven or cancelled.