Department of Education School Loan Discharge
Taking out student loans to pay for your education is essentially a necessity. Most college and university programs are so expensive that gift aid alone cannot cover the entire expense. Taking out a Department of Education school loan also means a lengthy repayment term and monthly installments, most of the time. There are cases where you can have your Department of Education school loan discharged or cancelled in part or as a whole. The circumstances surrounding a loan cancellation have to meet certain strict requirements and have the paperwork to prove the merit of cancelling the loan.
Total and Permanent Disability (TPD)
If you are completely unable to work and earn the money you need to live off of and repay your Department of Education school loan, it can be cancelled. The process is usually quite lengthy and you will require a deferment for the outstanding payments. You have to put in an application for cancellation for TPD as well as the paperwork from medical professionals that state the cause of your disability and reasons you are unable to continue to work.
The paperwork will be reviewed a number of times and your doctor will be contacted directly for questioning regarding your case. Your eligibility will be determined by the doctor’s statements, completed application, income verification and time of disability in relation to date of final loan disbursement. If you are found to be totally and permanently disabled, your loan will be discharged.
Teacher Loan Cancellation
A Department of Education school loan issued under the FFEL or Direct loan programs benefits from the possibility of partial cancellation for teachers. The program was created to encourage people to enter the teaching profession by offering up to $5,000 in loan forgiveness for teaching full time. You have to teach full time for at least five consecutive years at a low income designated school and be in current status on repayment. Some “highly qualified” teachers can benefit from up to $17,500 in loan cancellation after five years of full time teaching.
Death
If you die before you finish repaying your Department of Education school loan it will be discharged. The holder(s) of your estate will not be burdened with the repayment of your federal education loans.
Other Causes of Cancellation of Department of Education School Loan
Forged Signature – if you believe your signature was forged on any part of the loan application, promissory note or funds transfer, your loan may qualify for discharge. The burden of proof is on you which means you have to prove that the signatures on the papers are not yours using dated documents from a year before and after the date of the loan application.
Child/Family Services – if you are providing care or supervision to high risk children or adults from low income families, you can qualify for a loan cancellation.
School Closure – if your school closed within 90 days of your withdrawal from a school that closed or if your school closed and you were unable to complete your education program, the loan can be cancelled.
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