11 Programs for Federal Student Loan Forgiveness and Discharge from Chase Bank USA

 

If you are among the Americans who owe over $1.6 trillion in student loan debt, you might be curious about the options for student loan forgiveness. Programs like the Public Service Loan Forgiveness and the Total and Permanent Disability Discharge Forgiveness could help eligible borrowers eliminate some or all of their federal student loans.

Eligible participants may include teachers, government employees, nonprofit workers, medical professionals, and individuals with disabilities, among others. Those who have faced issues like forgery or deception may also qualify for certain programs.

However, these programs often come with specific eligibility criteria, such as requiring several years of work before you can qualify for student loan forgiveness.

Let’s explore the available student loan forgiveness plans for federal loans and the eligibility requirements associated with them.

What Is Federal Student Loan Forgiveness?

Federal student loan forgiveness occurs when the government cancels part or all of your student loan balance. Only federal student loans qualify for these programs, excluding loans from private lenders such as banks, credit unions, or fintech companies. Nevertheless, some private student loan borrowers might find forgiveness options through their lenders.

List Of Federal Student Loan Forgiveness And Discharge Programs

Here’s a list of current public student loan forgiveness programs you might be eligible for.

1. Income-Driven Repayment (IDR) Forgiveness:

An income-driven repayment plan sets your monthly payment based on your income and family size. The latest IDR plan, the Saving on a Valuable Education (SAVE) plan, was introduced by the Biden-Harris Administration in August 2023 and offers forgiveness to eligible low-balance borrowers.

The federal government may forgive your remaining balance if you initially borrowed $12,000 or less and have made 120 payments on your loans. For every additional $1,000 borrowed over that $12,000 limit, you'll need to make 12 more payments before your loan balance can be forgiven. To see if you qualify, visit StudentAid.gov and submit your application if eligible.

2. Teacher Loan Forgiveness:

If you've taught at a low-income school or educational service agency for five consecutive years and meet other eligibility criteria, you could qualify for up to $17,500 in student loan forgiveness. Check the Federal Student Aid office's Teacher Cancellation Low Income (TCLI) Directory to find out if your elementary school, secondary school, or educational service agency is eligible.

Other requirements include that if you've taught for five consecutive years, at least one of those years must have been after the 1997-98 academic year. Additionally, you cannot have an outstanding balance on your Direct Subsidized or Unsubsidized Loans or Federal Family Educational Loans (FFEL) as of October 1, 1998, or on the date you received a Direct Loan or FFEL after that date.

It's important to note that you cannot receive credit for both Teacher Loan Forgiveness and Public Service Loan Forgiveness during the same period.

3. Public Service Loan Forgiveness (Pslf):

According to the Federal Student Aid office, the government has forgiven nearly $34 billion in student debt through its PSLF program. So, what is this program, and who qualifies?

If you work for a government or nonprofit organization, you may be eligible for the PSLF program.

Eligibility requirements include being a non-defaulted federal Direct Loan borrower who has made 120 qualifying payments under an accepted repayment plan (whether consecutive or non-consecutive) on their loan and still has a remaining balance.

You need to have made 120 payments while working for an eligible employer for at least 30 hours a week. Eligible employers include:

- U.S. government organizations at any level (federal, state, local, or tribal), including the military

- Nonprofit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code

- Other nonprofit organizations that primarily employ full-time staff to provide certain qualifying public services.

Is your job eligible for PSLF? You can check the Federal Student Aid office's PSLF Help Tool to see if your employer is listed in the database. If your employer isn't listed, it might still qualify.

Pslf For Military Service Members

Have you served in the military for ten years and still have student loans? You could be eligible for PSLF. While your loan servicer may inform you of your eligibility, you can also reach out to them directly to confirm.

Pslf For Americorps Participants

If you have served in AmeriCorps, a U.S. agency that connects people with volunteer opportunities, you might qualify for student loan forgiveness. To be eligible, you must be a current AmeriCorps member or have served after 2007, as your service counts towards the ten years of public service required for PSLF.

4. Total And Permanent Disability Discharge:

If you are disabled, you might be eligible for federal student loan forgiveness. To qualify, you need to be recognized as totally and permanently disabled, which means you cannot engage in any "substantial gainful activity" due to a physical or mental condition.

You should consider filling out a total and permanent disability discharge application and submitting documentation from a physician, the U.S. Department of Veterans Affairs, or the Social Security Administration to support your claim.

Additional requirements include having a Direct Loan, FFEL, or a Federal Perkins Loan. You can apply for a total and permanent disability discharge here.

6. Closed School Loan Discharge:

The federal government may forgive your loans if you have Direct Loans, FFEL loans, or Federal Perkins Loans and meet one of three conditions:

1. You were an enrolled student when your school closed.

2. You were on a qualified leave of absence when your school closed.

3. Your school closed within 180 days (about six months) after you withdrew.

Your loan servicer may automatically discharge your loans or send you an application if any of these situations apply. However, you can also reach out directly if you find yourself in one of these circumstances. Keep in mind that you won't be eligible for loan discharge if you have already completed your program at the closed school.

6. Borrower Defense Loan Discharge:

You might be eligible for Borrower Defense Loan Discharge if you can show that you "enrolled in a school or continued to attend a school based on misleading information from the school or other misconduct covered by the regulation, and suffered a detriment that is of a nature and degree warranting a full discharge of your applicable federal loans," according to StudentAid.gov.

If you think you qualify, check out StudentAid.gov for details on eligibility requirements.

If your application is approved, the federal government could discharge your existing federal student loans, and some borrowers might also receive a refund for any payments made previously, depending on the loan servicer's discretion.

7. False Certification Discharge:

If you were falsely certified as a graduate by your high school or if there was an unauthorized signature on your student loan application, you could be eligible to have your loans discharged.

You may also qualify if someone stole your identity and took out a loan in your name. Both Direct and FFEL loans can be discharged under these circumstances.

8. Unpaid Refund Discharge:

Have you experienced a situation where your school did not process your request for a tuition refund?

If so, you might qualify for the federal government's partial refund loan discharge. The government will forgive the amount you are owed in a refund from your student loan balance.

9. Forgery Discharge:

If an outside party, such as an individual or institution, issued a student loan in your name without your permission, you might qualify for a discharge of those loans. This applies in cases where your signature was forged or your personal information was misused without your consent.

This type of forgiveness is available for borrowers with Direct, FFEL, or Perkins loans. If you submit a request for this discharge and the U.S. Department of Education approves it, not only will your remaining balance be reduced to zero, but you will also receive a refund for any payments you have made. You can complete the form here to make this request if you believe you qualify.

10. Discharge Due To Death:

If you or someone who took out student loans on your behalf passes away, the U.S. Department of Education will discharge those loans once proof of death is submitted to the loan servicer. Acceptable proof typically includes an original death certificate or a certified copy of one.

In cases where a parent took out a Parent Plus Loan to help their undergraduate child pay for college and then passes away, those loans may also be eligible for discharge under this policy. However, it's important to note that this discharge does not apply if a co-signer passes away.

11. Perkins Loan Cancellation And Discharge:

If you are an eligible borrower who received a Perkins loan while studying as an undergraduate or graduate student, you may qualify for loan forgiveness.

Eligibility requirements include working in fields such as education, law, nonprofits, the military, and healthcare. You must have begun your work in these areas on or after October 17, 1998. If the U.S. Department of Education approves your loan cancellation, it may not happen all at once but rather in increments over five years.

The federal government may forgive 100 percent of your Perkins loans if you have experienced bankruptcy, a school closure, or a service-connected disability, among other circumstances.

Things To Be Cautious About When Seeking Student Loan Forgiveness:

While there are various federal student loan forgiveness options for eligible borrowers, it's important to ensure that any options you consider come from a reliable source. You can verify the credibility of a program by checking the U.S. Department of Education's website.

Here are some signs that may indicate student loan forgiveness scams, as noted by the U.S. Department of Education, which you should be cautious of:

Programs that use aggressive marketing tactics

Programs that ask for a recurring fee

Requests for your StudentAid.gov username and password

Emails from senders with "no reply" in the address

Phone calls from individuals claiming to represent the U.S. Department of Education or other federal agencies

Final thoughts:

A 2023 study conducted by Western Governors University WGU Labs and Savi, a social impact technology startup, revealed that only 28% of student loan borrowers are aware of flexible Repayment plans or the possibility of having their debt discharged.

Consider contacting Federal Student Aid or your loan servicer to find out if any student loan forgiveness options are available to you. Even if you don't qualify, there may be ways to defer or partially reduce your debt based on your situation.