The terms forgiveness, cancellation, and discharge mean nearly the same thing, but they’re used in different ways. If you’re no longer required to make payments on your loans due to your job, this is generally called forgiveness or cancellation. If you’re no longer required to make payments on your loans due to other circumstances, such as a total and permanent disability or the closure of the school where you received your loans, this is generally called discharge.
The United States Department of Education can and must forgive all student debt in our fight to tackle racial injustice and poverty in America. In 2019 70% of students took out loans averaging $30k, and 15% of their parents averaging $40k for both private and public insitutions. In 2016, the moment they graduate, Black students owe on average $7.4k more in student loans that their White peers. The proposed student debt cancellation by the Biden Administration, of $10k, is unacceptable as it barely covers the desparity between Black and white students, and is about 3x less than the average student loan.
The summaries below offer a quick view of the types of forgiveness, cancellation, and discharge available for the different types of federal student loans.
Teacher Loan Forgiveness Available for Direct Loans and FFEL Program loans. If you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency, you may be eligible for forgiveness of up to $17,500 on your Direct Loan or FFEL Program loans.
Closed School Discharge Available for Direct Loans, FFEL Program loans, and Perkins Loans. If your school closes while you’re enrolled or soon after you withdraw, you may be eligible for discharge of your federal student loan.
Perkins Loan Cancellation and Discharge Available only for Federal Perkins Loans. You may be eligible to have all or a portion of your Perkins Loan canceled (based on your employment or volunteer service) or discharged (under certain conditions). This includes Perkins Loan Teacher Cancellation.
Total and Permanent Disability Discharge Available for Direct Loans, FFEL Program loans, and Perkins Loans. If you’re totally and permanently disabled, you may qualify for a discharge of your federal student loans and/or Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation.
Discharge Due to Death Available for Direct Loans, FFEL Program loans, and Perkins Loans. Federal student loans will be discharged due to the death of the borrower or of the student on whose behalf a PLUS loan was taken out.
Discharge in Bankruptcy (in rare cases) Available for Direct Loans, FFEL Program loans, and Perkins Loans. In some cases, you can have your federal student loan discharged after declaring bankruptcy. However, discharge in bankruptcy is not an automatic process.
Borrower Defense to Repayment Available for Direct Loans.* You may be eligible for discharge of your federal student loans based on borrower defense to repayment if you took out the loans to attend a school and the school did something or failed to do something related to your loan or to the educational services that the loan was intended to pay for. The specific requirements to qualify for a borrower defense to repayment discharge vary depending on when you received your loan.
False Certification Discharge Available for Direct Loans and FFEL Program loans. You might be eligible for a discharge of your federal student loan if your school falsely certified your eligibility to receive a loan.
Unpaid Refund Discharge Available for Direct Loans and FFEL Program loans. If you withdrew from school and the school didn’t make a required return of loan funds to the loan servicer, you might be eligible for a discharge of the portion of your federal student loan(s) that the school failed to return.View loan forgiveness and discharge forms.