PLUS Loan Forgiveness or Cancellation
Student loan forgiveness is a cancellation of the remaining portion of your student loans under certain circumstances. Forgiveness is available to some borrowers for a variety of reasons such as teaching in a low-income area, working in public service, or even serving in the military. Since there are many different paths to forgiveness, eligibility can be determined through each specific program.
Paths to Forgiveness
There are different types of loan forgiveness available to some borrowers. Public Service Loan Forgiveness is one common type, where the remaining balance of student loans (after 120 payments) is forgiven for public service employees.
To take advantage of a forgiveness program, borrowers must select a repayment plan where the loan term is more than 10 years. This is because under a standard 10-year plan, the loan will have been paid in full by the time the loan becomes eligible for forgiveness. Repayment plans for this include Extended Repayment or any consolidation plan that is not based on income.
Teacher loan forgiveness is not available for Parent PLUS loans.
Circumstances and Conditions for Loan Discharge
If you have taken out a PLUS Loan to help pay for your child's education, all or part of it may be cancelled (discharged) for several reasons. Cancellation is different from forgiveness in that forgiveness is an incentive for borrowers working in certain fields. Cancellation relieves the borrower from repayment obligation for extenuating circumstances. You may qualify for total or partial loan discharge if:
- The school closed within 90 days of your child's enrollment and they were unable to finish their program of study.
- The school did not properly qualify your child's status before they began studies.
- You did not receive a refund that was due to you.
- Your signature was forged.
- The school did not properly evaluate your child's ability to benefit from the coursework before beginning studies.
- You become totally and permanently disabled.
- If you or the dependent for whom the loan was borrowed, dies
- Your loan is discharged due to bankruptcy. (Typically, student loans cannot be discharged in a bankruptcy.) Consult your legal counsel regarding your particular situation.
Your loan cannot be discharged solely because you believe that the school your child attended did at least one of the following:
- Provided poor training, had unqualified instructors, or inadequate equipment
- Did not provide job placement or other services that it promised; or
- Engaged in fraudulent activities (other than falsely certifying the loan)
- If you believe you are eligible for loan forgiveness, contact the holder of your loan.
Check Your Account
You can view most of your federal financial aid history, including Stafford loans, in the National Student Loan Data System if you have a Personal Identification Number (PIN). If you don't have one, you can request one at the PIN site.
Consolidating your PLUS Loans can help to ease the repayment of the loan. Consolidation can stretch the repayment term from 10 years to a maximum of 30 years, making the monthly impact on your cash flow much lower. Click here for PLUS Loan Consolidation.
Contact the Department of Education for more details.