Loan Cancellation/Forgiveness/Discharge Conditions: Detailed Explanations
Closed School Cancellation
Your loan will be cancelled if you (or the student for whom you borrowed a Direct or Federal PLUS Loan) received, on or after Jan. 1, 1986, a portion or the entire loan to attend a school that closed before you completed your program of study. You must have been unable to complete the program because:
- the school closed while you were enrolled,
- the school closed while you were on an approved leave of absence or you withdrew within 90 days of the school closing, and
- you were unable to transfer credits or hours earned at the closed school.
Death Cancellation
Your loan will be cancelled if you (or the student for whom you borrowed a Direct or Federal PLUS Loan) die. A certified death certificate is required.
Disability Cancellation
Your loan may be cancelled if you become totally and permanently disabled. Certification and documentation requirements differ depending on your loan type. Contact your loan holder for more details.
Educational Component of Head Start Program Staffer Cancellation
Fifteen percent of your original principal loan amount - plus the interest that accrued during the year - will be cancelled for each complete school year you are a full-time staff member, regularly employed in a full-time professional capacity to carry out the educational part of a Head Start program. The program must operate for a full academic year or its equivalent, and your salary may not be more than that of a comparable employee working in the local educational agency.
False Certification by School Cancellation
Your loan will be cancelled if the school falsely certified your eligibility for the loan. To qualify for a false certification loan cancellation, you (or the student for whom you received a Direct or Federal PLUS Loan) must have received funds for a loan disbursed, in whole or in part, on or after January 1, 1986, and:
- the school admitted you when you did not meet the requirements for admission on the basis of your ability to benefit from the education, or
- at the time the school certified the loan, you had a condition that prevented you from meeting the legal requirements for employment in your state of residence in the occupation for which the program was intended, or
- the school signed your name on the application and/or promissory note without your authorization, and you did not receive the benefit of the loan proceeds, or
- the school endorsed your name on the loan check or signed the authorization for electronic funds transfer or master check without your consent, and you did not receive the benefit of the loan proceeds.
False Certification Due to Identify Theft Cancellation
Effective July 1, 2008, your loan may be cancelled if it was disbursed on or after January 1, 1986 and falsely certified as a result of a crime of identity theft. To qualify for an identity theft cancellation, you must provide your loan holder with a copy of a local, state, or federal court verdict or judgment that conclusively names you (or the loan’s endorser) as the victim of a crime of identity theft by a perpetrator named in the verdict or judgment.
Fire Fighter Cancellation
Your loan will be cancelled if you serve full time as a fire fighter for service to a local, state, or federal fire department or fire district.
Law Enforcement or Corrections Officer Cancellation
Your loan will be cancelled if you serve full time as a qualifying law enforcement or corrections officer. To establish eligibility, the school must determine that your:
- employing agency is eligible; i.e., a local, state, or federal agency that is publicly funded and its activities pertain to crime prevention, control, or reduction or to the enforcement of the criminal law and
- position is essential to the agency's primary mission; i.e., you are a sworn officer or person whose principal responsibilities are unique to the criminal justice system.
Legal Assistance Attorney Cancellation
Your loan may be cancelled if you are employed full time as an attorney, providing civil legal assistance and continually licensed to practice law. To be eligible, you must be a full-time employee of one of the following:
- A nonprofit organization that provides legal assistance for civil matters to low-income individuals at no cost
- A protection or advocacy system or clients assistance program that provides legal assistance for civil matters and receives funding under one of the following:
- Subtitle C of Title I of the Developmental Disabilities Assistance and Bill of Rights Act of 2000
- Sections 112 or 509 of the Rehabilitation Act of 1973
- Part A of Title I of the Protection and Advocacy for Individuals with Mental Illness Act of 1986
- Section 5 of the Assistive Technology Act of 1998
- Section 1150 of the Social Security Act
- Section 1253 of the Public Health Service Act
- Section 291 of the Help American Vote Act of 2002
To be eligible, you must enter into a written agreement to remain employed as a civil legal assistance attorney for a period of service not less than three years, unless involuntarily separated from that employment (for reasons other than misconduct).
Eligibility for this program is subject to available federal funds.
Librarian Cancellation
Your loan will be cancelled if you serve as a librarian, you have a master's degree in library science, and you are employed in either:
- an elementary school or secondary school that is eligible for assistance under Part A of Title I of the Elementary and Secondary Education Act of 1965 or
- a public library that serves a geographic area that contains one or more schools eligible for assistance under Part A of Title I of the Elementary and Secondary Education Act of 1965.
Military Service Cancellation
You are entitled to cancellation of up to 50 percent of your loan for full-time, active duty service in the U.S. Armed Forces in an area of hostilities or an area of imminent danger that qualifies for special pay under Section 310 of Title 37 of the U.S. Code. The cancellation rate for every complete year of qualifying service is 12.5 percent of the original principal loan amount, plus any interest that accrued during the year.
Nurse or Medical Technician Cancellation
Your loan will be cancelled if you serve full time as a nurse or medical technician providing health care services.
Professional Provider of Early Intervention Services for the Disabled Cancellation
Your loan will be cancelled if you are a full-time, qualified professional provider of early intervention services in a public or other nonprofit program under public supervision. Early intervention services are defined as developmental services that:
- are provided at no cost, except where federal or state law provides for a system of payments by families, including a schedule of sliding fees;
- are designed to meet the developmental needs of an infant or toddler with a disability in one or more of the following areas: physical development, cognitive development, communication development, social or emotional development, or adaptive development;
- meet the standards of the state in which they are provided;
- are provided by special educators; speech and language pathologists and audiologists; occupational therapists; physical therapists; psychologists; social workers; nurses; nutritionists; family therapists; orientation and mobility specialists; and pediatricians and other physicians;
- to the maximum extent appropriate, are provided in natural environments, including the home and community settings in which children without disabilities participate; and
- are provided in conformity with an individualized family service plan adopted in accordance with Section 636 of the Individuals with Disabilities Education Act.
Public or Non-Profit Child or Family Services Agency Employee Cancellation
Your loan will be cancelled if you serve as a full-time employee of an eligible public or private nonprofit child or family service agency providing or supervising the provision of services to both high-risk children who are from low- income communities and the families of such children.
Loan Forgiveness for Public Service Employees with Direct Loans
You may be eligible to have the interest and principal of your non-defaulted Direct Loans forgiven if you:
- made 120 monthly payments on eligible loans after October 1, 2007 and
- are employed in a public-service job at the time of such forgiveness and have been employed in a public-service job during the 120-month period (excluding time served as a Member of Congress).
Public-service jobs:
- Emergency management
- Government
- Military service
- Public safety
- Law enforcement
- Public health
- Public education
- Social work in a public child or family service agency
- Public interest law services
- Early childhood education
- Public services for individuals with disabilities or for the elderly
- Public library sciences
- School-based library sciences and other school-based services
- Faculty member at a Tribal College or University and other faculty teaching in high-needs subject areas or areas of shortage
- Early childhood educators
- Nurses:
- in a clinical setting or
- as a member of the nursing faculty at an accredited school of nursing.
- Foreign language specialists who:
- have obtained a undergraduate or advanced degree in a critical foreign language and
- are employed:
- in an elementary school or secondary school as a teacher of a critical foreign language,
- in an agency of the United States government in a position that regularly requires the use of such critical foreign language, or
- in an institution of higher education as a faculty member or instructor teaching a critical foreign language.
- Librarians who are employed:
- in a public library that serves a geographic area within which the public schools have a combined average of 30 percent or more of the schools’ total student enrollments composed of children meeting a measure of poverty under the Elementary and Secondary Education Act of 1965 or
- by a school that qualifies for loan cancellation for Perkins loan recipients who teach in such a school.
- Highly qualified teachers serving students who are:
- limited English proficient,
- from low-income communities, or
- from underrepresented populations.
- Child welfare workers who:
- have obtained a degree in social work or a related field with a focus on serving children and families and
- are employed in public or private child welfare services.
- Speech-language pathologists and audiologists who are employed in an eligible preschool program or a school that qualifies for loan cancellation for Perkins loan recipients who teach in such a school.
- School counselors, as defined by the Elementary and Secondary Education Act of 1965, working in a school that qualifies for loan cancellation for Perkins Loan recipients who teach in such a school.
- Public sector employees employed full-time in one of the following areas:
- Public safety
- First responder
- Firefighter
- Police officer
- Other law enforcement or public safety officer
- Emergency management
- Emergency medical technician
- Public health (including professionals engaged in health care practitioner occupations and health care support occupations, as such terms are defined by the Bureau of Labor Statistics)
- Public interest legal services:
- Prosecution
- Public defense
- Legal advocacy in low-income communities at a nonprofit organization
- Nutrition professionals who are:
- licensed, certified, or registered dieticians with a degree in a relevant field and
- employed as a dietician with an agency of the Special Supplemental Nutrition Program for Women, Infants, and Children under the Child Nutrition Act of 1996 (commonly known as “WIC”).
- Medical specialists who have been accepted to, or currently participate in, a full-time graduate medical education program or fellowship (or both) to provide health care services (as recognized by the Accreditation Council for Graduate Medical Education) that:
- require more than five years of total graduate medical training and
- have fewer United States medical school graduate applicants than the total number of positions available in such program or fellowship.
- Mental health professionals who:
- have at least a Masters Degree in social work, psychology, or psychiatry and
- are employed providing mental health services to children, adolescents, or veterans.
- Dentists who:
- have a degree from an accredited dental school (as accredited by the Commission on Dental Accreditation);
- have completed a residency training in pediatric dentistry, general dentistry, or dental public health; and
- are employed as a dentist or as a member of the faculty at a program or school accredited by the Commission on Dental Accreditation.
- STEM employees (employment in applied sciences, technology, engineering, or mathematics)
- Physical therapists providing services to children, adolescents, or veterans
- Superintendents, principals, and other administrators who are employed in a local educational agency, including an educational service agency in which 30 percent or more of its schools qualify for loan cancellation for Perkins Loan recipients who teach in the schools
- Occupational therapists providing services to children, adolescents, or veterans
- You must not have had an outstanding balance on a Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Program loan as of October 1, 1998 or on the date you obtained a FFEL Program or Direct Loan after October 1, 1998.
- You must have taught full time at a designated school for five consecutive, complete academic years. At least one of the years of teaching service must have been after the 1997-98 academic year.
- The loan for which you are requesting forgiveness must have been made before the end of your fifth year of qualifying teaching service.
- You must have performed your teaching service at an elementary or secondary school, or at a location operated by an educational service agency, in a low-income school district that is listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits.
- If you performed your teaching service in an elementary school, the chief administrative officer of the school (or educational service agency) where you performed the service must certify that you demonstrated knowledge and teaching skills in reading, writing, mathematics, and other areas of the elementary school curriculum.
- If you performed your teaching service in a secondary school, the chief administrative officer of the school (or educational service agency) where you performed the service must certify that you taught in a subject area that was relevant to your academic major.
- If your teaching service began on or after October 30, 2004, you must meet this additional criteria: The chief administrative officer of the school (or educational service agency) where you performed your service must certify that you meet the definition of "highly qualified" in the No Child Left Behind Act of 2001.
- You must have been either (1) employed full time as a highly qualified mathematics or science teacher in an eligible secondary school, or (2) employed full time as a highly qualified special education teacher whose primary responsibility was to provide special education to children with disabilities in an eligible elementary or secondary school.
- The chief administrative officer of the school (or educational service agency) where you performed your service must certify that you meet the definition of "highly qualified" in the No Child Left Behind Act of 2001.
- teacher in a school serving students from low-income families;
- special education teacher, including teachers of infants, toddlers, children, or youth with disabilities; or
- teacher in the fields of mathematics, science, foreign languages, or bilingual education or in any other field of expertise that is determined by a state education agency to have a shortage of qualified teachers in that state.
- you (or the student for whom you borrowed a PLUS Loan) received funds for a loan disbursed, in whole or in part, on or after Jan. 1, 1986,
- you withdrew from, were terminated from, or did not attend the school, and a refund of Title IV funds should have been made, and
- the refund was not made.
- 15 percent of the original principal loan amount - plus any interest that accrued during the year - for each of the first and second 12-month periods of service; and
- 20 percent of the original principal loan amount - plus any interest that accrued during the year - for each of the third and fourth 12-month periods of service.
Loan Forgiveness for Service in Areas of National Need
For each school, academic, or calendar year of full-time employment in an area of national need (described below) you complete on or after August 14, 2008, up to $2,000 of your outstanding student loan balance will be forgiven, limited to $10,000 total and five years of service. NOTE: This program is subject to federal funding allocation and availability.
Eligible employment in areas of national need:
Speech-Language Pathologist Cancellation
Your loan will be cancelled if you serve as a full-time speech language pathologist, you have a master's degree, and you are working exclusively with schools that are eligible for assistance under Title I of the Elementary and Secondary Education Act of 1965.
Spouses and Parents of September 11, 2001 Victims and Public Servants Cancellation
Survivors of victims of the September 11, 2001 terrorist attacks may be eligible for discharge of their entire outstanding student loan balance. No refunds are granted on payments made prior to discharge. Documentation of the victim's presence at the September 11, 2001 terrorist attacks, public servant status, or death or permanent disability may be required.
Teacher Loan Forgiveness
Certain teachers who have outstanding Direct Subsidized or Unsubsidized Loans / Federal Stafford Loans (subsidized or unsubsidized) or Direct Consolidation Loans / Federal Consolidation Loans may be eligible to have a portion of their loans forgiven (in other words, they won't have to repay that portion of their debt). There are two different teacher loan forgiveness maximums–$5,000 and $17,500–each with their own set of eligibility criteria (provided below).
To qualify for teacher loan forgiveness up to $5,000, teachers must meet all of the following criteria:
To qualify for up to $17,500 in forgiveness, you must meet of the criteria above and the following additional criteria:
To apply for teacher loan forgiveness or for more information about the program for these loan types, contact your loan holder.
Certain teachers who have outstanding Federal Perkins Loans may be eligible to have up to 100 percent of their loans cancelled (in other words, they won't have to repay their loan debt). To qualify for these provisions, you must serve full time in a public or non-profit elementary or secondary school system, which can include employment by an educational service agency, as a:
Contact the school you attended to inquire about teacher loan forgiveness in the Federal Perkins Loan Program.
Tribal College or University Faculty Cancellation
Your loan will be cancelled if you serve as a full-time faculty member at a Tribal College or University.
Unpaid Refund Cancellation
A portion of your loan (and applicable interest and fees) will be cancelled if:
Note: You may not apply for this cancellation if you currently are attending the school. In addition, if the school currently is open, you may not apply for this type of cancellation unless you have first contacted the school and attempted to resolve the issue. If the issue is not resolved, you may then apply.
Vista or Peace Corps Volunteer Cancellation
Up to 70 percent of your loan will be cancelled if you serve as a Peace Corps or ACTION volunteer. Schools apply cancellation for volunteer service in the following increments: