Student Loans: Other Types of Forgiveness, Cancellation, and Discharge

By: Charlestien Harris

Student loan forgiveness is a very hot topic these days. The Public Service Loan Forgiveness (PSLF) Waiver program deadline of Oct. 31 is fast approaching, so get your application in as soon as possible. If you don’t qualify for the special waiver program, you may want to consider checking to see if you are eligible for other loan forgiveness options. 

Here are a few alternative programs for you to explore.

Teacher Loan Forgiveness is available for Direct Loans and Federal Family Education Loan (FFEL) program loans. If you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency, you may be eligible for forgiveness of up to $17,500 on your Direct or FFEL loans. Previously, you would not have been able to receive a benefit for the same qualifying payments or period of service for Teacher Loan Forgiveness and Public Service Loan Forgiveness at the same time. But, the limited PSLF waiver temporarily removes this restriction for individuals who previously received Teacher Loan Forgiveness. 

Closed School Discharge is available for Direct Loans, FFEL program loans, and Perkins Loans.  The Biden administration has canceled student loan debt for borrowers who attended a handful of for-profit colleges. It also settled a class-action lawsuit that automatically approves 200,000 borrower defense claims against another 155 for-profit colleges. If your school closed while you were enrolled or soon after you withdrew, you may be eligible for discharge of your federal student loan. There are certain eligibility requirements to qualify for a Closed School Discharge; you must apply to get your loan obligation removed. 

Visit www.studentaid.gov/manage-loans/forgiveness-cancellation/closed-school for more detailed information. 

You can also find a list of the closed schools eligible for loan discharge at www.bestcolleges.com/news/for-profit-college-student-loan-forgiveness-list/.  

Perkins Loan Cancellation and Discharge is only available for Federal Perkins Loans. You may be eligible to have all or a portion of your Perkins Loan canceled (based on your employment or volunteer service) or discharged (under certain conditions). This includes Perkins Loan Teacher Cancellation. You may qualify for cancellation of up to 100% of a Federal Perkins Loan if you have served full time in a public or nonprofit elementary or secondary school system as a:

• teacher in a school serving students from low-income families
• special education teacher, including teachers of infants, toddlers, children, or youth with disabilities
• teacher in the fields of mathematics, science, foreign languages, or bilingual education, or in any other field of expertise determined by a state education agency to have a shortage of qualified teachers in that state

Eligibility for teacher cancellation is based on the duties presented in an official position description, not on the position title. To receive a cancellation, you must be directly employed by the school system. There is no provision for canceling Federal Perkins Loans for teaching in postsecondary schools. Visit www.studentaid.gov/manage-loans/forgiveness-cancellation/perkins for more information.

Total and Permanent Disability (TPD) Discharge is available for Direct Loans, FFEL program loans, and Perkins Loans. If you’re totally and permanently disabled, you may qualify for a discharge of your federal student loans. You can verify that you qualify for a TPD discharge by providing documentation from one of three sources:

• the U.S. Department of Veterans Affairs (VA)
• the Social Security Administration (SSA)
• a physician

Visit wwwstudentaid.gov/manage-loans/forgiveness-cancellation/disability-discharge for more information. 

Discharge Due to Death is available for Direct Loans, FFEL program loans, and Perkins Loans. Federal student loans will be discharged due to the death of the borrower or of the student on whose behalf a PLUS loan was taken out. If you die, then your federal student loans will be discharged after the required proof of death is submitted. Visit www.studentaid.gov/manage-loans/forgiveness-cancellation/death for more information.

Parent borrowers also have options. A parent PLUS loan can be discharged if you die, if you (not the student on whose behalf you obtained the loan) become totally and permanently disabled, or if your loan is discharged in bankruptcy (which is rare). Your parent PLUS loan may also be discharged if the child for whom you borrowed dies. In addition, all or a portion of a parent PLUS Loan may be discharged in any of these circumstances:

• The student for whom you borrowed could not complete his or her program because the school closed
• Your eligibility to receive the loan was falsely certified by the school
• Your eligibility to receive the loan was falsely certified through identity theft
• The student withdrew from school, but the school didn’t issue a refund of your loan money that it was required to pay under applicable laws and regulations

Applying for student loan forgiveness programs can seem like a complicated process, but it doesn’t have to be. With a little effort and research, you can learn to navigate the resources available and gather the information you need to qualify for any of the student loan forgiveness programs. 

For more information on this and other financial topics, email me at Charlestien.Harris@southernpartners.org, or call me at 662-624-5776.  

Until next week — stay financially fit!

Charlestien Harris is a financial contributor to DeSoto County News. She is a financial expert with Southern Bancorp Community Partners whose articles are seen in a number of publications around the region. You’ll be seeing her columns weekly on the DeSoto County News website and our social media channels.