Loan Discharge

PLEASE BE ADVISED: Courts have recently issued orders blocking President Biden's one-time student loan debt relief. The federal Department of Education is seeking to overturn those orders, but during this time, applications for debt relief are not being accepted. Updates will be available at the Federal Student Aid site.

You may qualify to cancel some or all of your federal student debt under the limited-time relief plan President Biden announced in August 2022:
  • If you earn less than $125,000 per year ($250,000 for married couples), up to $10,000 ($20,000 for Pell Grant borrowers) of your federal loans could be forgiven (canceled).
  • The government has extended the program for COVID-19 emergency relief and federal student aid. Repayment of loans will begin sixty days after the federal Department of Education has resolved its litigation regarding the one-time debt relief, or, if not resolved by June 30, 2022, sixty days after that.
  • You may be able to reduce the amount you owe on your student loan under an income-driven payment plan.
  • Read more about these opportunities on our FAQ page or the Federal Student Aid site.

Loan Discharge

Loan discharge means that some or all of your federal student loan is cancelled for certain reasons, including:

  • your school closes or
  • your school does something illegal

Visit Federal Student Aid to see which federal loans qualify.

If you have private loans, contact your loan service provider to learn more about your discharge options.

You school closed before you finished your program

This type of discharge, called closed-school discharge, can happen if your school closes either while you are enrolled or soon after you withdraw. If you cannot finish your program of study because your school closed, you could qualify for a 100% discharge of the federal loans you took to attend the school.

Note that you will not qualify for a loan discharge if you transfer your credits to another school and complete a similar program.

Learn more about closed-school discharge and how to apply at Federal Student Aid.

Your school breaks a state law

This type of discharge, called borrower-defense loan discharge, can happen if your school victimized you by violating a state law. This applies to Federal Direct Loans that you took to attend the program.

Your school could have violated state law by making false or misleading statements about:

  • the value of an educational program
  • financing needed to pay for the program
  • job-placement rates of graduates of the program

Learn more about borrower-defense loan discharge and how to apply at Federal Student Aid.

Other types of loan discharge

You could have your loan discharged for other reasons, such as:

  • You are totally and permanently disabled
  • You declare bankruptcy
  • You find that your school made a false statement about you, your loan, or your job prospects.

Learn more about the different types of loan discharge at Federal Student Aid.