Can Student Loans Be Discharged?

Student loans can be discharged, but only in certain circumstances. When federal student loans are discharged, your requirement to pay back some or the entire remaining amount of your debt due is eliminated.

Total and Permanent Disability Discharge

Veterans may be eligible for student loan discharge if they can provide paperwork from the VA demonstrating they either have a disability that is 100% disabling due to their service, or are totally disabled due to an individual unemployability rating.


Student Loan Discharge Due to Death

Federal student loan discharge may also be granted if the borrower dies. Parents who have taken out Parent PLUS loans on behalf of a student may also have these loans forgiven if the student dies.


Declaring Bankruptcy and Discharging Student Loans

Filing for bankruptcy does not automatically cancel or discharge your student loans. In fact, your federal student loans will only be possibly eligible for discharge during bankruptcy if you file a separate “adversary proceeding.”


Closed School Discharge of Loans

For a 100% discharge of certain loan types, including Direct Loans, FFEL and Federal Perkins loans, you can also show that you were unable to complete your degree program because your school closed.


False Certification Discharge

In very rare circumstances, you may be eligible for a discharge if loans were issued but they should not have been given out to you in the first place.


Unpaid Refund Discharge

If you leave school after getting a loan, your school may also be required to return part of your loan money. You can become eligible for a partial discharge if you withdraw from school and the college did not return the portion it was required to under the law.


As you can see, it is possible to discharge student loans, but only in unique life circumstances, such as disability or false certification. If you do qualify, that could result in some or all of your student loans going away, though you may have to pay taxes on the discharged balance.


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