Can You Get Your Student Loan Written Off?

Student loans can be a significant financial burden, and many borrowers wonder if they can get their loans written off. The good news is that there are several avenues to explore when it comes to loan forgiveness, discharge, and cancellation. However, the process is complex and eligibility requirements vary depending on the type of loan, the borrower's occupation, and other factors. In this comprehensive guide, we'll explore the different options available for getting your student loan written off, including Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness, income-driven repayment plan forgiveness, disability discharge, and more.

Public Service Loan Forgiveness (PSLF)

One of the most well-known options for getting student loans forgiven is the Public Service Loan Forgiveness (PSLF) program. This program is designed for borrowers who work in public service jobs, such as government or non-profit organizations. To qualify for PSLF, you must make 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

Eligibility Criteria for PSLF

To be eligible for PSLF, you must:

1. Have Direct Loans (or consolidate other federal loans into a Direct Loan).
2. Be enrolled in a qualifying repayment plan, typically an income-driven repayment plan.
3. Work full-time for a qualifying public service employer, such as a government agency or a 501(c)(3) non-profit organization.
4. Make 120 qualifying monthly payments (10 years of payments).

Recent Changes to PSLF

The U.S. Department of Education has made temporary changes to the PSLF program, allowing borrowers to receive credit for payments that previously did not qualify. This is part of the Limited PSLF Waiver, which temporarily expands eligibility for forgiveness.

Teacher Loan Forgiveness

Teachers who work in low-income schools or educational service agencies may qualify for Teacher Loan Forgiveness. This program can forgive up to $17,500 of your Direct or FFEL Subsidized and Unsubsidized Loans after five consecutive years of full-time teaching.

Eligibility Criteria for Teacher Loan Forgiveness

To qualify, you must:

1. Work as a full-time teacher for five consecutive academic years.
2. Be employed at a school or educational service agency that serves low-income students.
3. Have Direct or FFEL Subsidized and Unsubsidized Loans.
4. Meet other qualifications, such as being a "highly qualified teacher" in certain subject areas.

Income-Driven Repayment Plan Forgiveness

Income-driven repayment plans, such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE), can provide loan forgiveness after 20 or 25 years of qualifying payments. The amount forgiven is the remaining balance on your loan after this period.

Types of Income-Driven Repayment Plans

1. Income-Based Repayment (IBR): Payments are capped at 10-15% of your discretionary income, with forgiveness after 20-25 years.
2. Pay As You Earn (PAYE): Payments are 10% of discretionary income, with forgiveness after 20 years.
3. Revised Pay As You Earn (REPAYE): Payments are 10% of discretionary income, with forgiveness after 20 years for undergraduate loans and 25 years for graduate loans.

Total and Permanent Disability Discharge

If you become totally and permanently disabled, you may qualify for a Total and Permanent Disability (TPD) discharge, which can wipe out your federal student loans.

Eligibility for TPD Discharge

To be eligible for a TPD discharge, you must provide documentation of your disability from one of the following:

1. The U.S. Department of Veterans Affairs (VA).
2. The Social Security Administration (SSA).
3. A physician.

Application Process for TPD Discharge

The application process involves submitting proof of your disability, and if approved, your loans will be discharged, and you will no longer be required to make payments.

Closed School Discharge

If your school closes while you're enrolled or soon after you withdraw, you may be eligible for a Closed School Discharge, which forgives 100% of your federal student loans.

Eligibility for Closed School Discharge

To qualify, you must meet one of the following criteria:

1. Your school closed while you were enrolled and you did not complete your program.
2. You were on an approved leave of absence when the school closed.
3. You withdrew within 120 days before the school closed.

Borrower Defense to Repayment

Borrowers who were misled by their school or who experienced a violation of state law by the school may qualify for loan forgiveness through the Borrower Defense to Repayment program.

Eligibility for Borrower Defense to Repayment

To qualify, you must prove that your school engaged in misconduct, such as making false promises about your education or career prospects.

Bankruptcy Discharge

In rare cases, student loans can be discharged in bankruptcy, but this is difficult to achieve. You must prove that repaying your loans would cause "undue hardship".

Undue Hardship Standard

Courts use different tests to determine whether you meet the undue hardship standard, such as the Brunner test, which requires you to prove that:

1. You cannot maintain a minimal standard of living if forced to repay the loans.
2. Your financial situation is unlikely to improve.
3. You have made good faith efforts to repay the loans.

Conclusion

Getting your student loan written off is possible, but it requires understanding the different programs and meeting specific eligibility criteria. Whether you qualify for Public Service Loan Forgiveness, Teacher Loan Forgiveness, an income-driven repayment plan, or other forms of discharge, it's essential to explore all your options and understand the requirements. Always stay informed about any changes to these programs and consult with a financial advisor or loan servicer to ensure you are on the right path to loan forgiveness.