Who qualifies for loan discharge?
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. ED will continue to discharge loans as borrowers reach the required number of months 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. ED will continue to discharge loans as borrowers reach the required number of months for forgiveness.
You may be eligible for income-driven repayment (IDR) loan forgiveness if you've have been in repayment for 20 or 25 years. An IDR plan bases your monthly payment on your income and family size.
Under the law, you may have a borrower defense to repayment if your school engaged in certain misconduct related to the making of a federal loan or the educational services it provided which caused you harm warranting a full discharge of your applicable federal Direct Loans.
- stage IV or terminal cancer.
- chronic fibromyalgia.
- degenerative disc disease (severe back pain)
- major depression.
- bipolar disorder.
Your loans should automatically qualify for forgiveness after you've spent 20 or 25 years in repayment. Reach out to your loan servicer about any steps you may need to take.
When you have your federal student loans discharged, it means: you no longer have further obligation to repay the loan, you will receive a reimbursem*nt of payments made voluntarily or through forced collection, and.
The Biden-Harris Administration announced today the approval of $4.9 billion in additional student loan debt relief for 73,600 borrowers. These discharges are the result of fixes made by the Administration to income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF).
You may notice your former servicer has cleared your loan account. For example, your loan balance may come up as “paid in full” on your former servicer's website or on your credit report. This does not mean you've received loan forgiveness. This is part of the loan transfer process.
- Continue making your monthly payments while your account is being reviewed for forgiveness. ...
- Apply for a forbearance to postpone payments while your account is being reviewed for forgiveness.
How long does borrower defense discharge take?
How Long Does a Borrower Defense Case Take? The timeline to hear back from the Department of Education may vary depending on the case. The department has three years to make a decision after determining whether it is materially complete.
If you believe that you've been defrauded, you can check the Federal Student Aid website to see if you may have a claim. Federal direct loans are the only loans eligible for forgiveness under borrower defense, and your school must have violated a state law or certain federal standards for your claim to be successful.
![Who qualifies for loan discharge? (2024)](https://i.ytimg.com/vi/lYqAtogTnm4/hq720.jpg?sqp=-oaymwEcCNAFEJQDSFXyq4qpAw4IARUAAIhCGAFwAcABBg==&rs=AOn4CLDuc3QO7-xWryJgbVypKfI0W8jQKQ)
You want to include as much detail possible in your answers, including as much information as you can remember about who made promises to you and where and when they made those promises. When telling your story, it is helpful to use names, dates, and as many details as you can.
Permanent disability (PD) is any lasting disability from your work injury or illness that affects your ability to earn a living.
You can qualify for a TPD discharge if you're eligible for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).
What injuries or illnesses are considered TPD? Any physical injury, physical illness or psychological injury that permanently prevents you from working can be considered TPD.
Borrowers should expect that the process may take up to six months, and in some cases, longer.
Incomplete Loan Data Could Result In Some Periods Not Counting Toward Student Debt Forgiveness. Another possible issue for some borrowers could be defective loan data. The Education Department relies on data submitted by loan servicers to a system called the National Student Loan Data System.
The remaining unpaid balance of loans is forgiven after 25 years. Income-Based Repayment (IBR)—Depending on when you first took out loans (before or on or after July 1, 2014), payments are generally 10% or 15% of the borrower's discretionary income, but never more than the 10-year Standard repayment plan amount.
Put simply, Student loan forgiveness, cancellation, or discharge all mean that you are no longer required to repay some or all of your loan balance. While often used interchangeably, there are important distinctions between the terms and when they are applicable.
What is the difference between loan forgiveness and loan discharge?
Student loan forgiveness is usually based on the borrower working in a particular occupation for a period of time. Student loan discharge is usually based on the borrower's inability to repay the debt or the borrower not being responsible for the debt because of fraud.
A debt discharge occurs when a debtor qualifies through bankruptcy court. When debt is discharged, a lender can no longer make attempts to collect the debt and the debtor is no longer responsible for paying it back. Debt discharge often results in taxable income to the debtor unless certain IRS conditions are met.
Forgiveness based on 20 or 25 years of on-time payments is only available to Federal Student loans. Private student loans do not qualify.
Prior to 2021, just 2.5% of borrowers applied for loan forgiveness; less than 0.3% of student loan debt was eventually forgiven. Around 2.6% of applicants for federal student loan forgiveness had the remainder of their student loan payments discharged following several years of required payments.
Having a student loan will affect your credit score. Your student loan amount and payment history are a part of your credit report. Your credit reports—which impact your credit score—will contain information about your student loans, including: Amount that you owe on your loans.
References
- https://studentaid.gov/help-center/answers/article/how-to-apply-to-have-loans-discharged
- https://www.quora.com/Does-FAFSA-only-cover-4-years
- https://studentaid.gov/help-center/answers/article/what-does-federal-student-loans-discharged-mean
- https://studentaid.gov/help-center/answers/article/determined-eligible-for-tpd-discharge-subject-to-three-year-post-discharge-monitoring-period
- https://www.mohela.com/pslf
- https://monacosolicitors.com.au/faq/what-qualifies-as-a-total-and-permanent-disability/
- https://www.consumerfinance.gov/ask-cfpb/do-student-loans-affect-my-credit-score-en-581/
- https://studentaid.gov/help-center/answers/article/what-happens-if-loan-discharge-app-is-approved
- https://www.savingforcollege.com/article/student-loan-forgiveness
- https://www.ppsl.org/sweet-v-cardona-class-members-oldversion
- https://studentaid.gov/help-center/answers/article/borrower-defense-refunds
- https://finaid.umich.edu/managing-your-aid/leaving-u-m/loan-exit-counseling
- https://www.consumerfinance.gov/about-us/blog/initial-fresh-start-program-changes-followed-by-increased-credit-scores-for-affected-borrowers/
- https://studentaid.gov/help-center/answers/article/in-which-cases-can-federal-student-loans-be-discharged
- https://www.pcom.edu/about/departments/financial-aid/financial-literacy/exit-counseling/exit-counseling.html
- https://www.supremecourt.gov/opinions/URLs_Cited/OT2018/18-489/18-489-1.pdf
- https://www.lendingtree.com/student/student-loan-discharge/
- https://efpls.ed.gov/help/faq_exits.html
- https://www.foxbusiness.com/economy/millions-student-loan-borrowers-still-arent-paying-their-bills
- https://www.tateesq.com/learn/what-happens-to-student-loans-after-25-years
- https://www.gulfcoast.edu/tuition-aid/financial-aid/documents-forms/misc/exit-counseling-faq.pdf
- https://studentaid.gov/help-center/answers/article/qualifying-for-borrower-defense
- https://www.calstate.edu/attend/paying-for-college/financial-aid/types/Pages/federal-pell-grants.aspx
- https://www.bestcolleges.com/news/analysis/faq-what-is-borrower-defense-to-repayment/
- https://studentaid.gov/articles/your-loan-was-transferred-whats-next/
- https://www.cnbc.com/2023/12/29/student-loan-borrowers-wont-face-penalties-for-missed-payments.html
- https://sunyjefferson.edu/costs-aid/documents/Student_Loan_Exit_Counseling_Inst.pdf
- https://www.dir.ca.gov/dwc/PermanentDisability.htm
- https://www.unomaha.edu/admissions/financial-support-and-scholarships/tools-and-resources/_docs/entrance_counseling.pdf
- https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics
- https://www.investopedia.com/articles/personal-finance/022416/worst-things-can-happen-if-you-dont-pay-your-student-loans.asp
- https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/forbearance
- https://www.cnbc.com/select/when-to-expect-biden-student-loan-forgiveness/
- https://ncua.gov/regulation-supervision/letters-credit-unions-other-guidance/resumption-federal-student-loan-payments
- https://www.bankrate.com/loans/student-loans/private-student-loan-bankruptcy/
- https://studentaid.gov/manage-loans/default
- https://www.findlaw.com/bankruptcy/after-bankruptcy/how-soon-will-my-credit-score-improve-after-bankruptcy-.html
- https://educationdata.org/student-loan-forgiveness-statistics
- https://www.credible.com/personal-loan/personal-loan-after-bankruptcy
- https://studentaid.gov/announcements-events/sweet-settlement
- https://studentaid.gov/articles/student-loan-forgiveness/
- https://studentaid.gov/manage-loans/forgiveness-cancellation/borrower-defense
- https://www.gao.gov/blog/student-loan-payment-pause-ends-income-driven-repayment-plans-may-help-borrowers
- https://www.investopedia.com/forgiven-student-loans-on-credit-reports-7371496
- https://studentaid.gov/entrance-counseling
- https://www.irs.gov/taxtopics/tc431
- https://www.investopedia.com/what-happens-dont-pay-back-personal-loan-7555464
- https://www.irs.gov/newsroom/what-if-my-debt-is-forgiven
- https://studentaid.gov/help-center/answers/article/what-do-i-need-for-exit-counseling
- https://www.investopedia.com/terms/d/debt-discharge.asp
- https://www.ed.gov/news/press-releases/biden-harris-administration-begins-discharges-804000-borrowers-39-billion-automatic-loan-forgiveness-result-fixes-income-driven-repayment-plans
- https://www.forbes.com/sites/adamminsky/2023/10/19/didnt-get-a-student-loan-forgiveness-email-7-possible-reasons-why/
- https://studentaid.gov/exit-counseling/
- https://studentaid.gov/counseling-selection
- https://studentaid.gov/articles/pay-off-student-loans-faster/
- https://www.credible.com/student-loans/interest-start
- https://educationdata.org/average-student-loan-debt
- https://www.fool.com/research/student-loan-debt-statistics/
- https://www.investopedia.com/what-is-borrower-defense-5214746
- https://www.tateesq.com/learn/student-loan-forgiveness-disability
- https://www.forbes.com/advisor/student-loans/student-loan-forgiveness-faqs/
- https://www.forbes.com/sites/adamminsky/2022/12/22/when-will-you-receive-student-loan-forgiveness-timelines-for-4-programs/
- https://www.sparrowfi.com/blog/fafsa-requirements-everything-you-need-to-know
- https://www.investopedia.com/more-student-loan-borrowers-are-getting-debt-discharged-through-bankruptcy-8403729
- https://money.com/consequences-not-paying-student-loans/
- https://www.bankrate.com/personal-finance/debt/debts-discharged-in-bankruptcy/
- https://ofas.uci.edu/paying-for-uci/loans/loan-tools/exit-counseling.php
- https://www.newhaven.edu/admissions/financial-aid/undergraduate/repaying/grace-period.php
- https://www.smc.edu/admission-aid/financial-aid-scholarships/loan-counseling.php
- https://www.tateesq.com/learn/defaulted-student-loans-not-on-credit-report
- https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/discharge-bankruptcy-bankruptcy-basics
- https://smartasset.com/student-loans/how-does-student-loan-forgiveness-affect-your-finances
- https://studentaid.gov/entrance-counseling/
- https://nylag.org/wp-content/uploads/2022/03/NYLAG_FSLBDTR_ApplicationGuide.pdf
- https://studentaid.gov/understand-aid/types/loans/interest-rates
- https://www.bankrate.com/loans/student-loans/never-pay-student-loans/
- https://www.nerdwallet.com/article/loans/student-loans/what-happens-next-if-student-loans-are-forgiven-2
- https://studentaid.gov/help/save-fafsa-info
- https://studentaid.gov/help-center/answers/article/how-do-i-know-what-loans-i-have
- https://caflatfee.com/can-your-loan-be-denied-after-closing/
- https://www.debt.org/students/loan-forgiveness/
- https://www.credible.com/refinance-student-loans/student-loan-forgiveness-20-years
- https://www.ed.gov/news/press-releases/biden-harris-administration-announces-additional-49-billion-approved-student-debt-relief
- https://www.lendingtree.com/student/pay-off-student-loans-early/
- https://www.investopedia.com/articles/personal-finance/101014/disadvantages-stafford-loans.asp
- https://studentaid.gov/manage-loans/forgiveness-cancellation/disability-discharge
- https://financialaid.lmu.edu/generalinformation/financialliteracy/loanexitcounseling/
- https://www.clevelandbankruptcyattorney.com/bankruptcy-debt-relief/student-loans/student-loan-discharge-vs-student-loan-forgiveness/
- https://lendedu.com/blog/student-loan-references/
- https://www.tateesq.com/learn/repayment-plan-questions
- https://finance.yahoo.com/personal-finance/tax-on-student-loan-forgiveness-182343895.html
- https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2023-2024/vol8/ch2-direct-loan-counseling
- https://www.nerdwallet.com/ca/mortgages/mortgage-discharge-what-it-is-how-it-works
- https://www.investopedia.com/terms/f/federal-direct-student-loan-program.asp
- https://studentaid.gov/debt-relief-announcement
- https://studentaid.gov/articles/financial-aid-not-enough/
- https://www.tandfonline.com/doi/pdf/10.1080/10835547.2008.12091635
- https://upsolve.org/learn/student-loan-forgiveness-dropped-out/
- https://studentaid.gov/help-center/answers/article/borrower-defense-case-updates
- https://www.consumerfinance.gov/ask-cfpb/what-is-a-federal-direct-loan-en-1553/
- https://geltfinancial.com/commercial-mortgage/what-is-an-exit-fee-in-a-commercial-mortgage-or-loan/
- https://www.consumerfinance.gov/paying-for-college/student-loan-forgiveness/
- https://www.capitalone.com/learn-grow/money-management/how-long-does-bankruptcy-stay-on-your-credit-report/
- https://www.wtaxattorney.com/tax-problems/forgiven-liabilities/
- https://studentaid.gov/help-center/answers/article/how-long-is-my-grace-period
- https://www.collegeraptor.com/paying-for-college/articles/student-loans/are-student-loan-funds-sent-directly-to-the-student-or-the-school/
- https://studentaid.gov/announcements-events/default-fresh-start
- https://studentaid.gov/manage-loans/repayment
- https://studentaid.gov/help-center/answers/article/loan-discharge
- https://www.ucas.com/student-finance-england/repaying-your-student-loan
- https://studentaid.gov/announcements-events/borrower-defense-update
- https://www.investopedia.com/what-happens-when-your-student-loans-are-forgiven-7152753
- https://fortune.com/education/articles/how-does-student-loan-debt-forgiveness-impact-borrowers-and-the-economy/
- https://loans.ucla.edu/loan-grace
- https://www.savingforcollege.com/article/what-is-a-master-promissory-note
- https://studentaid.gov/help-center/answers/article/status-of-entrance-counseling
- https://www.cnbc.com/2023/12/27/millions-of-student-loan-borrowers-still-arent-making-payments-.html
- https://answerconnect.cch.com/topic/5762b86e7c6b1000871890b11c2ac4f102/discharge-of-debt
- https://studentaid.gov/manage-loans/forgiveness-cancellation