Student Loans: Other Types of Forgiveness, Cancellation, and Release
By: Charlestien Harris
Student loan forgiveness is a very hot topic these days. The October 31st Public Service Loan Exemption Scheme (PSLF) deadline is fast approaching, so submit your application as soon as possible. If you do not qualify for the Special Waiver Program, you may consider checking to see if you qualify for other loan forgiveness options.
Here are some alternative programs to explore.
Teacher loan forgiveness is available for direct loans and Federal Family Education Loan (FFEL) program loans. If you teach full-time for five full, consecutive academic years at a low-income elementary school, high school, or educational services agency, you may be eligible for a rebate of up to $17,500 on your direct or FFEL. Previously, you would not have been able to receive a benefit for the same payments or period of service eligible for teacher loan relief and public service loan relief at the same time. However, the limited PSLF waiver temporarily removes this restriction for people who have already received teacher loan forgiveness.
School outing closed is available for direct loans, FFEL program loans and Perkins loans. The Biden administration has forgiven student loan debt for borrowers who attended a handful of for-profit colleges. It also settled a class action lawsuit that automatically approves 200,000 borrower defense claims against 155 other for-profit colleges. If your school closed while you were enrolled or shortly after you withdrew, you may be eligible for federal student loan discharge. There are certain eligibility requirements to be eligible for a closed school outing; you must request the removal of your loan obligation.
Visit www.studentaid.gov/manage-loans/forgiveness-cancellation/closed-school for more detailed information.
You can also find a list of closed schools eligible for loan release at www.bestcolleges.com/news/for-profit-college-student-loan-forgiveness-list/.
Perkins Loan Cancellation and Release is only available for federal Perkins loans. You may be eligible to have all or part of your Perkins loan forgiven (depending on your employment or voluntary service) or discharged (under certain conditions). This includes Perkins Loan Professor Cancellation. You may be eligible for up to 100% forgiveness of a federal Perkins loan if you served full-time in a public or nonprofit elementary or secondary school system as:
- teacher in a school serving students from low-income families
- specialist teacher, including teachers of infants, toddlers, children or young people with disabilities
- teacher in the fields of math, science, foreign language, or bilingual education, or any other area of expertise determined by a state education agency to have a shortage of qualified teachers in that state
A teacher’s eligibility for cancellation is based on the duties presented in an official job description, not the job title. To receive a cancellation, you must be directly employed by the school system. There is no provision for canceling federal Perkins loans for education in post-secondary schools. Visit www.studentaid.gov/manage-loans/forgiveness-cancellation/perkins for more information.
Total and Permanent Disability Leave (TPD) is available for direct loans, FFEL program loans and Perkins loans. If you are totally and permanently disabled, you may be eligible for a discharge from your federal student loans. You can verify that you qualify for a TPD waiver by providing documentation from one of three sources:
- the US Department of Veterans Affairs (VA)
- the social security administration (ASS)
- a physicist
Visit www.studentaid.gov/manage-loans/forgiveness-cancellation/disability-discharge for more information.
Release due to death is available for direct loans, FFEL program loans and Perkins loans. Federal student loans will be canceled due to the death of the borrower or student on whose behalf a PLUS loan was issued. If you die, your federal student loans will be discharged upon submission of the required proof of death. Visit www.studentaid.gov/manage-loans/forgiveness-cancellation/death for more information.
Borrowing parents also have options. A parent PLUS loan can be terminated 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 terminated in bankruptcy (which is rare). Your parent PLUS loan can also be canceled if the child you borrowed for dies. Additionally, all or part of a parent PLUS loan may be canceled under any of the following circumstances:
- The student you borrowed for was unable to complete their program because the school closed
- Your eligibility to receive the loan has been falsely certified by the school
- Your eligibility to receive the loan has been falsely certified by identity theft
- The student has dropped out of school, but the school has not issued the repayment of your loan money that they were required to pay under applicable laws and regulations
Applying for a student loan forgiveness program may seem like a complicated process, but it doesn’t have to be. With a little effort and research, you can learn how to navigate the available resources and gather the information you need to qualify for one of the student loan forgiveness programs.
For more information on this and other financial topics, email me at [email protected], or call me at 662-624-5776.
Until next week — stay financially fit!
Charlestien Harris is a financial contributor to DeSoto County News. She is a financial expert with Southern Bancorp Community Partners whose articles appear in a number of publications in the region. You’ll see his columns weekly on the DeSoto County News website and on our social media channels.