School & Education
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May 2025 update: On May 5, 2025, involuntary collection actions will restart on federal student loans that are in default. This means your loan holder can start collecting your loan by taking money from your wages or federal payments, such as tax refunds, Social Security, or other benefit payments. The Department of Education recommends that borrowers visit their Default Resolution Group website. You can also visit the Federal Student Aid website to learn more about getting out of default and how student loan debt is collected.
March 2025 update: A federal court has stopped the US Department of Education from implementing the Savings on a Valuable Education (SAVE) plan and parts of other income-driven repayment (IDR) plans. Because of this, the IDR and online loan consolidation applications were temporarily unavailable. As of March 26, 2025, the online IDR and loan consolidation applications are available again. This is a changing area of law. For more information, visit the Federal Student Aid website.
Federal student loan forgiveness programs
You must pay your student loan even if:
- You can’t find a job,
- Do not finish your education,
- Were a minor when you signed your promissory note or received the loan, or
- Are not happy with the education you received.
There are special situations and programs that allow your loans to be forgiven, canceled, or discharged. Student loan forgiveness, cancellation, and discharge generally mean the same thing: you won't have to pay back some or all of your loan.
Loan repayment programs can also help with student loans.
Learn about student loan forgiveness and repayment options below.
Public Service Loan Forgiveness
March 2025 update: The US Department of Education is reviewing a recent executive order about the Public Service Loan Forgiveness (PSLF) program. The Federal Student Aid website says that there are no changes to PSLF right now. This is a changing area of law. Visit the Federal Student Aid website for more information.
If you work for a government or nonprofit organization, you might be eligible for the PSLF program. PSLF forgives the remaining balance of your Direct Loans if you make the equivalent of 120 qualifying payments while working full time for an eligible employer. Find out if your employer is eligible for the PSLF Program.
If you reach 120 months of qualifying employment, you may have the option to buy back months that didn't count as qualifying payments because of ineligible deferment or forbearance status. Learn more about Public Service Loan Forgiveness buyback.
Closed school discharge
You may qualify for closed school discharge if:
- Your school closes while you were enrolled or soon after you withdraw, and
- You have a Direct Loan, Federal Family Education Loan, or Federal Perkins Loan.
Note: A federal court delayed the effective date of the latest regulations in this area. The US Department of Education is still accepting applications and will process applications using earlier rules. This is a changing area of law. Learn more on the Federal Student Aid website.
Total and permanent disability (or death) discharge
If you are totally and permanently disabled (TPD), you may qualify for discharge of:
- Your federal student loans, and/or
- Your Teacher Education Assistance for College and Higher Education (TEACH) grant services requirement.
If you get a TPD discharge, you won't have to repay the following types of loans:
- Direct Loan,
- Federal Family Education Loan, and
- Federal Perkins.
Learn more about TPD discharge.
The loan may also be discharged if the borrower dies. Your loan may be removed if you are a parent and a loan borrower, and you or the student dies. Learn more about discharge due to death.
Discharge in bankruptcy (in rare cases)
Cancellation is possible only if the court rules that repayment would be an undue hardship for the borrower.
Learn about what you must do to ask the court to discharge your federal student loan in bankruptcy.
False certification of student eligibility
You may be eligible for discharge of your Direct Loan or Federal Family Education Loan if a school falsely certifies your eligibility to receive a loan. You may also be eligible for identity theft discharge or forgery discharge if your name was forged on a loan document. Learn more about false certification loan discharge.
Unpaid refund discharge
If you withdrew from school after receiving a Direct Loan or Federal Family Education Loan, the school may have needed to return some or all of the loan money to your lender. If your school did not return the funds to the lender, the amount canceled would be the amount the school was required to return. Learn more about unpaid refund discharge.
Teacher loan forgiveness
You may be eligible for loan forgiveness of up to $17,500 if:
- You teach full time for five consecutive years in a designated school or agency serving low-income students, and
- You have a Direct Loan or Federal Family Education Loan.
You cannot receive credit toward teacher loan forgiveness and PSLF for the same period of service. Learn more about Teacher Loan Forgiveness.
Perkins Loan cancellation and discharge (including teacher cancellation)
You may qualify to have some or all of your Perkins Loan canceled if:
- You’ve completed eligible employment or volunteer service, and
- You’ve experienced certain circumstances, like a school closure or disability .
You may also be eligible for deferment, where your repayment can be postponed while you're teaching. Contact your college or your college’s Perkins Loan servicer for more information on applying for deferment. More information is available on the Federal Student Aid website.
Borrower defense discharge
You might qualify for loan forgiveness if:
- Your school misled you or broke the law, and
- You have a Direct Loan.
Note: Regulations in this area are currently under review. The Department of Education continues to make decisions about borrower defense applications. This is a changing area of law. Learn more on the Federal Student Aid website.
US Armed Forces
Most branches of the US Armed Forces have loan repayment programs. You can find details on their websites or from your local recruiter. Learn more about aid for military families.
Illinois loan forgiveness and repayment programs
Illinois has loan forgiveness and repayment programs for qualifying Illinois residents with student loans. You need to agree to work in Illinois in an understaffed field, like teaching or nursing. Apply as soon as you can to avoid missing the deadline. Some programs might not have funding right now. This is likely because of the state budget. For details on programs, who can apply, and how to apply, check the Illinois Student Assistance Commission (ISAC) website. Check the pages below for updates on the budget and funding:
- Community Behavioral Health Care Professional Loan Repayment Program
- Human Services Professional Loan Repayment Program
- Illinois Teachers Loan Repayment Program
- John R. Justice Student Loan Repayment Program
- Nurse Educator Loan Repayment Program
- School and Municipal Social Work Shortage Loan Repayment Program
- Veterans' Home Medical Providers' Loan Repayment Program
Community Behavioral Health Care Professional Loan Repayment Program
ISAC has a program to help mental health and substance use professionals with their student loans. This is not a loan forgiveness program but instead provides funding to help students repay their loans. To get funding, you must practice in a community mental health center. The center must be located in an underserved area.
To be eligible, you must:
• Be a US citizen or an eligible noncitizen,
• Live in Illinois,
• Have a student loan balance,
• Have worked at least 12 consecutive months as a behavioral health professional in the above-mentioned settings, and
• Have not defaulted on a student loan.
The Illinois Department of Financial and Professional Regulation must have given you your license. This program is for these professions:
- Psychiatrist,
- Psychologist,
- Advanced practice registered nurse,
- Physician assistant,
- Licensed clinical social worker,
- Licensed clinical professional counselor,
- Certified alcohol and drug counselor,
- Licensed marriage and family therapist,
- Certified recovery support specialist,
- Professional possessing a Master's degree in counseling, psychology, social work, or marriage and family therapy, or
- Professional possessing a Bachelor's degree in counseling, psychology, or social work.
To apply, send an application to ISAC. You can get funding for up to 4 years. How much you receive depends on your job and the remaining loan balance. For each year you get help with your loans, you need to work for an extra 12 months as a behavioral health professional. This must be in an underserved area.
Do I need to make loan payments while my application is being reviewed?
Depending on the type of forgiveness, cancellation, or discharge you’re applying for, you may have to make payments while your application is reviewed. Check with your loan servicer to find out whether you must continue making payments during the application review period.
Additional Resources
Federal Student Aid
Learn more about the ways to qualify for loan forgiveness, cancellation, or discharge on the Federal Student Aid website.
Illinois Student Assistance Commission (ISAC)
ISAC has resources for students and parents to help with planning before college and paying during and after college.
National Consumer Law Center Student Loan Toolkit
The Student Loan Toolkit provides a basic overview of the student loan system and offers options for managing student loan debt.
The Institute of Student Loan Advisors (TISLA)
TISLA works to ensure that all student loan borrowers have access to free advice and dispute resolution assistance. They can help answer personal student loan questions by email.
