Student Loans in Default Logo

Student Loan Cancellation Process

The cancellation (discharge) of your student loan obligation is possible under certain circumstances and, if granted, releases you from all obligations to repay the student loan.

Stafford Loans

Perkins Loans

Up Stafford up - Cancellation/Discharge

Cancellation Conditions

Amount Forgiven

Notes

Borrower's total permanent disability or death

100%

For a PLUS Loan, includes death but not disability of the student for whom the parents borrowed.

Full-time teacher for five consecutive years in a designated elementary or secondary school serving students from low-income families

Up to $5,000 of the aggregate loan amount that is outstanding after completion of the fifth year of teaching. A borrower might qualify for loan forgiveness under the Direct Consolidation and the FFEL Consolidation Loan Programs. Only the portion of the consolidation loan that was used to repay Stafford student up qualifies.

For Direct and FFEL Stafford student up received on or after October 1, 1998, by a borrower with no outstanding loan balance as of that date. The five consecutive years of teaching must all occur after the 1997-98 academic year. (To find out whether your school is considered a low-income school, visit www.ed.gov/studentaid/payback.html or call 1-800-4-FED-AID.)

Bankruptcy (in rare cases)

100%

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%

For student up received on or after January 1, 1986.

School does not make required return of loan funds to the lender

Up to the amount that the school was required to return

For student up received on or after January 1, 1986.

Up Perkins student up - Cancellation/Discharge

Cancellation Conditions

Amount Forgiven

Notes

Borrower's total and permanent disability or death

100%

 None

Full-time teacher in a designated elementary or secondary school serving students from low-income families

Up to 100%

Service qualifies for deferment also.

Full-time special education teacher (includes teaching children with disabilities in a public or other nonprofit elementary or secondary school)

Up to 100%

Service qualifies for deferment also.

Full-time qualified professional provider of early intervention services for the disabled

Up to 100%

Service qualifies for deferment also.

Full-time teacher of math, science, foreign languages, bilingual education, or in other fields designated as teacher shortage areas

Up to 100%

Service qualifies for deferment also.

Full-time employee of a public or non-profit child- or family-services agency providing services to high-risk children and their families from low-income communities

Up to 100%

Service qualifies for deferment also.

Full-time nurse or medical technician

Up to 100%

Service qualifies for deferment also.

Service as a full-time law enforcement or corrections officer

Up to 100%

Service qualifies for deferment also.

Full-time staff member in the education component of a Head Start Program

Up to 100%

Service qualifies for deferment also.

Vista or Peace Corps volunteer

Up to 70%

Service qualifies for deferment also.

Service in the U.S. Armed Forces

Up to 50% in areas of hostilities or imminent danger

Service qualifies for deferment also.

Bankruptcy (in rare cases)

Up to 100%

Cancellation is possible only if the bankruptcy court rules that repayment would cause undue hardship.

Closed school (before student could complete program of study)

100%

For student up received on or after January 1, 1986.

Up NOTE: As of October 7, 1998, all Perkins Loan borrowers are eligible for all cancellation benefits regardless of when the loan was made or the terms of the borrower's promissory note. However, this new benefit is not retroactive to services performed before October 7, 1998.

More information on Cancellation/Deferment Options for Teachers