Cancel or Discharge a Student Loan
Student loans may be discharged if you have a total and permanent disability (TPD). The Department of Education considers you to have a TPD if you are unable to work and earn money because of an injury or illness that is expected to continue indefinitely or result in death.
The following will help you navigate the discharge process:
• The TPD process is complex and will take a significant amount of time; the time varies depending on the dates of disability and TPD application.
• TPD applications must be reviewed first by the loan holder and guaranty agency. If approved by them, the Department then reviews the applications. You and your physician may be contacted at each level of the review.
• The Department of Education’s TPD requirements are different from the disability eligibility requirements for Social Security, Veteran’s Affairs, or any other federal agency.
• A doctor of medicine or osteopathy, authorized to practice in the United States, must describe and certify your TPD status on the TPD application form [see link below].
• You must provide each loan holder with a separate TPD application with your original signature and the doctor’s signature. The doctor’s signature may be either an original or a photocopy, but may not be a stamp.
• You are not eligible for TPD discharge if you were totally and permanently disabled before receiving the last disbursement on any federal student loans, other than a consolidation loan.
• You will be asked to provide income verification through the I.R.S. for a period of at least three years following the date of disability.
• If you receive final TPD approval, the Department should also review your eligibility for refund of payments made after the date of disability.
School Closure
If you received a student loan at a school that closed before you completed your studies, you may be eligible for discharge of your loan. A federal student loan can be discharged for school closure if you were enrolled when the school closed and could not complete the program of study because of the closure. If you were on an approved leave of absence, you are considered to have been enrolled at the school. If the school closed within 90 days after you withdrew, you are also considered eligible for discharge.
Please bear in mind that you are not eligible for the discharge if you are completing a comparable educational program at another school. If you complete a comparable program of study at another school after your loan is discharged, you may have to pay back the amount of discharge. If you haven’t received a diploma or certificate but have completed all of the coursework for the program, you are not eligible for the discharge.
Ability to benefit
Your loan can be discharged if the school admitted you based on your ability to benefit from the training but you weren’t properly tested to measure that ability or you failed the test. You may also be eligible for this type of discharge if you did not meet the physical or legal requirements of your state to enroll in the program or work in the career for which you were training, regardless of whether you had a high-school diploma or General Education Diploma (GED).
Student loans cannot be discharged because you feel your institution provided a poor education or had unqualified instructors or inadequate equipment. The U.S. Department of Education does not endorse the school’s educational programs or guarantee that the school will deliver the services for which a student contracted. Therefore, this discharge cannot be granted if the school did not provide job placement or other services that it promised, or if you were not able to find a job in your field of study.
Child and Family Services Cancellation
According to federal law, a borrower is eligible to receive a child or family services cancellation if they are solely “providing or supervising the provision of services to high-risk children who are from low-income communities and the families of these children” (Section 674.56(b) of the Perkins regulation). You may also be providing these services to adults, but these services must be secondary to the services provided to high-risk children. To qualify for this cancellation, you must provide services only to high-risk children from low-income communities.