The student loan debt crisis that has been gripping our country for the last few years has opened the eyes of many to the insurmountable burden that these loans have placed on hard-working Americans. Stuck in a cycle of never-ending payments with high interest rates, many borrowers are looking for relief. Thankfully, loan service providers and the U.S. Department of Education have started paying attention to the impending crisis by providing lifelines to those who are most in need. Some of the more popular forms of student loan debt relief are forgiveness and cancellation. These programs, which are available to a wide range of borrowers, contain provisions that provide a viable path towards financial freedom. Here’s a brief overview of student loan debt forgiveness, cancellation and discharge.

Student Loan Forgiveness

Student loan forgiveness typically occurs as the result of making a set number of payments while working in a field that has been deemed eligible for total or partial loan forgiveness. The Public Service Loan Forgiveness Program allows for all borrowers who have worked in the public sector (government and not-for-profit jobs) who have made 120 on-time monthly student loan payments to obtain forgiveness on their remaining student loan balance. It is important to understand that not all student loans are eligible for forgiveness under this plan and that the Department of Education must certify your employer as public interest. Additionally, you must be a full-time employee and repayment must occur under a qualifying repayment plan.

Teacher Loan Forgiveness

Similar to the Public Service Loan Forgiveness Program, the Teacher Loan Forgiveness Program provides loan forgiveness for qualifying educators that have taught five consecutive years at a low-income school or an education service agency. The program allows for forgiveness of up to $17,500 in qualifying student loans upon completion of five consecutive years of teaching. Your loans must not be in default in order to receive forgiveness.

Perkins Loan Cancellation

Federal Perkins Loans may be eligible for cancellation under certain qualifying circumstances. Certain educators, public defenders, law enforcement agents, nurses, and those in certain other professions are eligible for cancellation of their Federal Perkins Loans. The requirements and the amount of cancellation that you may be eligible for depends on your profession and the origination dates of the loans.

Student Loan Discharge And Bankruptcy

Certain eligible borrowers who have petitioned for bankruptcy may be eligible for discharge of their student loan debt. Bankruptcy filers historically have been unable to have their student loans discharged except in extreme cases. Recently, bankruptcy courts have expanded the allowance of student loan discharge if the borrower can prove that repayment of the loans will create an undue hardship on the borrower. To determine if you qualify for student loan discharge through bankruptcy, consult with an experienced bankruptcy attorney.

Your student loans may also be discharged if you have experienced a total and permanent disability. In order to qualify for a total permanent disability discharge (TPD), you have to complete and submit a TPD discharge application along with documentation showing that you meet the requirements for being considered totally and permanently disabled. You will need verification of your disability from a licensed physician or via documentation from the United States Department of Veterans Affairs (VA) or Social Security Administration (SSA) showing that you are totally and permanently disabled.

Additional Considerations

Student loan debt can be crippling. With compound interest, your overall student loan debt can continue to climb if you do not take control of it. While not all student loan debt is eligible for forgiveness or cancellation, it is recommended that you contact your loan servicing provider to see if you are eligible. Additionally, there are many options that you can take advantage of if you are struggling to make your payments. Forbearances and deferments may provide you with the necessary breathing room to get a handle on your payments. Lastly, if you feel that you’ll have no chance of repaying your loans, then you may want to consult with an experienced bankruptcy attorney to see if you qualify for a student loan discharge.

Florida Bankruptcy Attorneys To The Rescue

The Bankruptcy Team, PLLC helps clients resolve financial dilemmas through bankruptcy or other legal avenues so that our clients get the fresh starts that they are entitled to. Our lawyers have spent years refining our practice and staying up to date on recent developments within the bankruptcy sphere. We will carefully review your case to determine what the best option is for you and will vigorously pursue all available pathways toward a fresh financial start. While not all debtors will be eligible for discharge of student loan debt, we will ensure that we do everything that we can to put you in the best position to handle your financial affairs. To consult with The Bankruptcy Team, PLLC, call or contact us today.