Benefits with Commonwealth of Virginia Members

Student Loan Forgiveness

Understanding Loan Forgiveness

In certain situations, you can have your federal student loans forgiven, canceled, or discharged. Forgiveness, cancellation, or discharge of your loan means that you are no longer required to repay some or all of your loan. Find out more about the types of forgiveness, and whether you qualify due to your job or other circumstances, in the sections below.

Differences Between Forgiveness, Cancellation, and Discharge

The terms forgiveness, cancellation, and discharge mean nearly the same thing, but they're used in different ways. If you're no longer required to make payments on your loans due to your job, this is generally called forgiveness or cancellation. If you're no longer required to make payments on your loans due to other circumstances, such as a total and permanent disability or the closure of the school where you received your loans, this is generally called discharge.

It's important to remember that outside of the circumstances that may qualify you to have your loans forgiven, canceled, or discharged, you remain responsible for repaying your loan—whether or not you complete your education, find a job related to your program of study, or are happy with the education you paid for with your loan. Even if you were a minor (under the age of 18) when you signed your promissory note or received the loan, you are still responsible for repaying your loan.

Types of Forgiveness, Cancellation, and Discharge

The summaries below offer a quick view of the types of forgiveness, cancellation, and discharge available for the different types of federal student loans.

Public Service Loan Forgiveness (PSLF)

If you are employed by a government or not-for-profit organization, you may be able to receive loan forgiveness under the PSLF Program. PSLF forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

Teacher Loan Forgiveness

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 Loan or Federal Family Education Loan (FFEL) Program loans.

Note: You may not receive a benefit for the same qualifying payments or period of service for Teacher Loan Forgiveness and PSFL.

Closed-School Discharge

If your school closes while you're enrolled or soon after you withdraw, you may be eligible for discharge of your federal student loan. This is available for Direct Loans, FFEL Program loans, and Perkins Loans.

Perkins Loan Cancellation and Discharge

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.

Total and Permanent Disability (TPD) Discharge

If you're totally and permanently disabled, you may qualify for a discharge of your federal student loans and/or Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation. This is available for Direct Loans, FFEL Program loans, and Perkins Loans.

Discharge Due to Death

Federal student loans will be discharged due to the death of the borrower or of the student on whose behalf a Parent Loan for Undergraduate Students (PLUS) loan was taken out. (This is available for Direct Loans, FFEL Program loans, and Perkins Loans.)

Discharge in Bankruptcy (in rare cases)

In some cases, you can have your federal student loan discharged after declaring bankruptcy. However, discharge in bankruptcy is not an automatic process. (This is available for Direct Loans, FFEL Program loans, and Perkins Loans.)

Borrower Defense to Repayment

This is available for Direct Loans. You may be eligible for discharge of your federal student loans based on borrower defense to repayment if you took out the loans to attend a school and the school did something or failed to do something related to your loan or to the educational services that the loan was intended to pay for. The specific requirements to qualify for a borrower defense to repayment discharge vary depending on when you received your loan.

False-Certification Discharge

You might be eligible for a discharge of your federal student loan if your school falsely certified your eligibility to receive a loan. (This is available for Direct Loans and FFEL Program loans.)

Unpaid-Refund Discharge

If you withdrew from school and the school didn't make a required return of loan funds to the loan servicer, you might be eligible for a discharge of the portion of your federal student loan(s) that the school failed to return. (This is available for Direct Loans and FFEL Program loans.)

Eligibility for Parent Borrowers

As with loans made to students, 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. 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 pay a refund of your loan money that it was required to pay under applicable laws and regulations.

Contact your loan servicer for more information: Link opens in a new windowhttps://studentaid.gov/manage-loans/repayment/servicers#your-servicer.

How to Apply for Forgiveness

Contact your loan servicer if you think you qualify. If you have a Perkins Loan, you should contact the school that made the loan or the loan servicer the school has designated.

Are you looking for a loan forgiveness or discharge form? View loan forgiveness and discharge forms here: Link opens in a new windowhttps://studentaid.gov/repayment-forms.

Loan Payments During the Application Review Period

Depending on the type of forgiveness, cancellation, or discharge you're applying for, you may have to make payments during your application review. Check with your loan servicer to find out whether you must continue making payments during the application review period.

Your Application Was Approved

If you qualify for forgiveness, cancellation, or discharge of the full amount of your loan, you are no longer obligated to make loan payments. If you qualify for forgiveness, cancellation, or discharge of only a portion of your loan, you are responsible for repaying the remaining balance.

If you qualify for certain types of loan discharge, you may also receive a refund of some or all of the payments you made on the loan, and any adverse information related to your delinquency or default on the loan may be deleted from your credit record. If the loan was in default, the discharge may erase the default status. If you have no other defaulted loans, you would regain eligibility for federal student aid.

Your Application Was Denied

If your application was denied, you'll remain responsible for repaying your loan according to the terms of the promissory note that you signed. Talk to your loan servicer about repayment options if you have a Direct Loan or FFEL Program loan.

If your loan is in default, visit this page to find out how to begin repaying your loan and your options for getting out of default: Link opens in a new windowhttps://studentaid.gov/manage-loans/default/get-out.

If you believe that your application was denied in error, contact your loan servicer for more information.