In some situations, you can have your federal student loans forgiven, canceled, or discharged.
Please note that you must pay your student loan even if you can’t find a job, do not finish your education, or are not happy with the education that you paid for with your loan. There are certain situations however that would allow your loan to be forgiven, canceled, or discharged. Below are possible types of forgiveness, cancellation, and discharge:
Closed school discharge
For borrowers who could not complete their program because the school closed while they were enrolled or borrowers who withdrew from school not more than 90 days before the school closed.
Total and Permanent Disability (or death) Discharge
A total and permanent disability (TPD) discharge release you from having to repay the following loans:
- William D. Ford Federal Direct Program loan
- Federal Family Education Loan (FFEL)
- Program loan
- Federal Perkins Loan
- Read more information about this
If the borrowers die, then the loan may be discharged. If you are a parent and a loan borrower, your loan may be removed if you die, or if the student on whose behalf you obtained the loan dies.
Discharge in Bankruptcy (in rare cases)
Cancellation is possible only if the bankruptcy court rules that repayment poses an undue hardship to the borrower.
False Certification of Student Eligibility or Unauthorized Payment Discharge
If a school falsely certifies a borrower's eligibility to receive a loan.
Unpaid Refund Discharge
If the school does not make the required return of loan funds to the lender. The amount canceled would be the amount the school was required to return.
Teacher Loan Forgiveness
For full-time teachers for five consecutive years, teaching in a designated elementary or secondary school, or educational service agency serving students from low-income families. (Must meet additional eligibility requirements.)
Public Service Loan Forgiveness
For borrowers who are not in default and who make 120 qualifying payments on the loan. See more details about the program.
Perkins Loan Cancellation and Discharge (includes Teacher Cancellation)
Details available in the Federal Perkins Loan Cancellation and Discharge Summary Chart.
Borrow Defense Discharge
Borrowers may be eligible for forgiveness of the federal student loans used to attend a school if that school misled them or engaged in other misconduct in violation of certain laws.
U.S. Armed Forces
Most branches of the U.S. Armed Forces have loan repayment programs. Specific details can be found at their respective websites or from your local recruiter.
Additional Resources within Illinois
ISAC (Illinois Student Assistance Commission)
The State of Illinois offers help with student loans for residents who qualify. It usually requires an obligation to work in Illinois for a specified period in a field with a shortage of workers such as teaching or nursing. The following awards made available through various programs administered by ISAC must be approved every year by the Illinois General Assembly and the Governor of Illinois by approving the necessary program funding. Applications are encouraged as soon as possible to ensure that the deadline is not missed, however processing of applications does not begin until the program funds have been approved. Some of these programs are not currently funded due to the state budget. Read the Loan Forgiveness and Repayment Programs page for a full description of the programs, eligibility requirements, and how to apply, and then visit the page regularly for the latest updates regarding the status of the budget and program funding for:
Updated: February 2018