Loan Forgiveness and Discharge Programs (2024)

FAQs

What is loan forgiveness and discharge? ›

In certain situations, you can have your federal student loans forgiven, canceled, or discharged. That means you won't have to pay back some or all of your loan(s). The terms “forgiveness,” “cancellation,” and “discharge” mean essentially the same thing.

For certain types of loan discharge, you may also receive a refund of some or all of the payments you made on the loan, and any adverse information related to your delinquency or default on the loan may be deleted from your credit record. If the loan was in default, the discharge may erase the default status.

If you work full time for a government or nonprofit organization, you may qualify for forgiveness of the entire remaining balance of your Direct Loans after you've made 120 qualifying payments—i.e., 10 years of payments. To benefit from PSLF, you need to repay your federal student loans under an IDR plan.

The Borrower Defense to Repayment Rule (BD Rule) offers students relief from federal loans borrowed based on fraudulent, misleading or illegal acts by their schools. Borrower defense is an established legal right for many forms of consumer credit, and it has been a part of the Higher Education Act for many years.

Student loan forgiveness eliminates part or all of a borrower's federal student loan debt. Only federal direct loans qualify for loan forgiveness, which means private loans aren't covered. You can earn student loan forgiveness by working in public service and making regular payments.

A mortgage discharge is when a mortgage securing your home loan is removed from the title of your property once you have repaid your home loan in full. You'll need to complete a mortgage discharge or release form to release the mortgage over the property you have provided as security to your home loan.

If you're no longer required to make payments on your loan(s) due to other circ*mstances, such as a total and permanent disability or the closure of the school where you received your loans, this is generally called discharge. Learn more about student loan forgiveness, cancellation, and discharge.

Borrowers who reach forgiveness under the account adjustment will get an email notification by the end of 2023; all other borrowers will be notified in 2024. So if you requested a refund, but you've been in repayment for at least 20 to 25 years, you may be free from your student debt — including the refunded amount.

Why did my student loans disappear from my credit report? Your student loan disappeared from your credit report because your loan servicer made a mistake, or you fell into default more than 7 years ago. Remember, even if your loans no longer appear on your credit report, you're still legally obligated to repay them.

If you have loans that have been in repayment for more than 20 or 25 years, those loans may immediately qualify for forgiveness. Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones.

Who is not included in student loan forgiveness? ›

What student loans are not eligible for forgiveness? Private student loans, by definition, are private and are not eligible to be forgiven. These are loans the borrower owes to student loan providers and not the federal government.

Borrowers with federal Perkins loans can have up to 100% of their loans canceled if they work in a public service job for five years. In many cases, approved borrowers will see a percentage of their loans discharged incrementally for each year worked.

Your loan can be discharged only under specific circ*mstances, such as school closure, a school's false certification of your eligibility to receive a loan, a school's failure to pay a required loan refund, or because of total and permanent disability, bankruptcy, identity theft, or death.

If the U.S. Department of Education (ED) approves your application for borrower defense, we will discharge any remaining balance on the federal student loans you took out to attend the school and may also refund loan payments you already made.

Generally speaking a discharge of a loan means you are no longer expected to repay it, and probably no longer owe it.

Discharge (of debts) refers to the process in bankruptcy court, when a debtor is no longer liable for their debts, and the lender is no longer allowed to make attempts to collect the debt.

A mortgage discharge is a signed document from the lender indicating that the mortgage contract has been fulfilled. Discharging the mortgage ends the lender's legal claim to your property.

If you are totally and permanently disabled, you may qualify for a total and permanent disability (TPD) discharge of your federal student loans or TEACH Grant service obligation. If you receive a TPD discharge, you will no longer be required to repay your loans or complete your TEACH Grant service obligation.