Student Loan Discharge
The federal student loan COVID-19 payment pause has been extended into 2023. The repayment pause is now extended until 60 days after the federal Department of Education is permitted to implement the one-time debt relief program or its litigation is resolved. If the one-time debt relief program has not been implemented and the litigation has not been resolved by June 30, 2023 — payments will resume 60 days after that. For the latest information, please visit Federal Student Loan COVID-19 page.
There are also new options for loan forgiveness for those in public service, even if they previously did not qualify for the PSLF program. For the latest information, please visit the Federal Student Loan PSLF Limited Waiver page.
Under certain circumstances, you may be eligible to have some or all of your federal student loans discharged, meaning that the loans are erased and you are no longer obligated to pay. The primary circumstances that allow for discharge are when your school closes or your school engages in illegal conduct. These discharges are called “Closed School Discharge” and “Borrower Defense to Repayment,” respectively. There are also additional types of discharges that are available based on your individual circumstances.
The discharge options outlined below are applicable to various types of federal loans. Visit Federal Student Aid to see whether your loans qualify.
If you have private loans, contact your loan service provider to learn more about your discharge options.
Closed School Discharge
If you are unable to complete your program of study because your school closed either while you were enrolled or within 120-180 days of your withdrawal, you may be eligible for a 100% discharge of certain types of federal loans obtained to attend the closed school. Students who transfer credits to another school and complete a comparable program of study are not eligible.
For more information on the eligibility requirements and to apply, visit Federal Student Aid.
Borrower Defense to Repayment
If you were a victim of fraud or another violation of state law by your school, you may be eligible for a full or partial loan discharge of one type of federal student loans, Federal Direct Loans, obtained to attend the program.
Examples of school actions that constitute such violations include making false or misleading statements about the value of an educational program, the financing needed to pay for a program, or the job placement rate of graduates of the program.
To learn more about discharge based on the school’s misconduct and to apply, visit Federal Student Aid.
Other Grounds for Discharge
In addition to schools closing or engaging in unlawful conduct, borrowers can discharge their loans for a variety of individual circumstances such as having a total and permanent disability; entering bankruptcy; or discovering that your school made a false authorization or certification about you, your loan, or your job prospects.
For a full list of grounds for discharge and the associated applications, visit Federal Student Aid.