Student Loan Discharge is a type of Repayment. Loan discharge is possible under very rare circumstances.
It is a solution for borrowers who want their student loans to be canalled and be released from all legal obligation to repay the borrowed funds.
The most important student loan is the one with lowest interest rate.
Student Loans Quick Link List:
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| Discharge - Forgiveness Condition | Amount Discharged/Forgiven | Notes |
| Borrower's total and permanent disability or death | 100 percent | For a PLUS Loan, includes the death, but not disability, of the student for whom the parents borrowed. |
| Full-time teacher for five consecutive years is a designated elementary or secondary school serving students from low-income families. Must meet additional eligibility requirements. |
Up to $5,000 (up to $17,500 for teachers in certain specialties) of the total loan amount outstanding after completion of the fifth year of teaching.
Under the Direct and FFEL Consolidation Loan programs, only the portion of the consolidation loan used to repay eligible Direct Loans or FFEL Loans qualifies for loan forgiveness. |
For Direct and FFEL Stafford Loan borrowers with no outstanding balance on a Direct or FFEL Loan on Oct. 1, 1998, or on the date they received a loan on, or after that date.
PLUS Loans are not eligible. At least one of the five consecutive years of teaching must occur after the 1997-98 academic year. To find out whether your school is considered a low-income school, go to www.FederalStudentAid.ed.gov. Click on "Students, Parents and Counselors". Or call 1-800-4-FED-AID (1-800-433-3243). |
| Bankruptcy (in rare cases) | 100 percent | Cancellation is possible only if the bankruptcy court rules that repayment would cause undue hardship. |
| Closed school (before student could complete program of study) or false loan certification. | 100 percent | For loans received on or after Jan. 1, 1986. |
| False loan certification now includes identity theft. | 100 percent | Effective July 1,2006 |
| School does not make required return of loan funds to the lender. | Up to the amount that the school was required to return. | For loans received on or after Jan. 1, 1986 |
| Loan forgiveness for public service employees. | 100 percent of the remaining outstanding balance on an eligible Direct Loan. | For a borrower not in default and who makes 120 monthly payments on the loan after Oct. 1, 2007. |
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Student Loan Tips |
Q: Take Out Student Loans As The Last Resort
When you try to get all types of Financial Aid and you do not receive anything or if the amount of money is not enough try borrowing money by taking out loans.
Q: Use Your Grandparents
Everyone talks about parents, but very rarely do we hear Grandparents. They can take out a Loans and help you store some of the assets.
Q: Apply For Student Loans On the Same Day
We are not sure if this tip is valid, but if you have to apply for more than one student loan (different banks) do it on the same day. This will prevent the second bank to see your first loan on the credit history and it will be easier to get qualified.
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Important Questions |
Q: What is the best student loan?
Difficult question. There is no such thing as the ultimate best loan, because every student has a different requirement. Sometimes the best student loan could be the one you get, if no other
financial aid is provided. Federal student loans carry low interest rates and can be forgiven. Some of them do not need to be repaid while you're in school.
Q: Do Student Loans Cover Off-Campus Housing?
Yes, in general student loans can be used for anything you want related to college. That's why it's a loan. Grants and scholarships on the other hand have to be used for tuition and books only.
Q: Possible to get a student loan without a co-signer?
Most of the federal student loans do not need a co-signer since they are geared towards young students without long credit history. With private loans you will need a co-signer. With peer to peer
loans it will be on case by case basis. Some investors could provide a loan without a co-singer for a higher interest rate.
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Student Loans are a core part of Financial Aid. Both
Federal Government and Private Investors offer student loans.
They could be for Students and Parents.
Student loans are also available for Undergraduates and
Graduates.
Students start applying for Federal Student Loans by submitting the FAFSA Application.
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