Private Student Loan Forgiveness
The average price of a 4-year degree in the United States is now $127,000 (and rising). The amount of debt that students are graduating with has become a national crisis. Many grads are unable to get a job and start paying back their loans. Fortunately, many services offer Student Loan Forgiveness Programs for borrowers who meet specific criteria. At the same time, it’s important to note that this program only applies to private student loans and Federal student loans have their own set of programs, including the Public Service Loan Forgiveness Program (PSLF), which is available to all federal loan borrowers.
Discharge due to school closing prior to completion of the loan
If you are a student who has completed a loan and the school closes before you can receive all of your coursework, you may be eligible for discharge. The same is true if the school closes while the student is still enrolled. If your school closes and you are unable to complete your education there, then once you have transferred to another school, will be eligible for discharge as well.
You should also know that if a student leaves a program before completing it and then returns later on in life (at least three years after leaving), they may be able to get their loans discharged as well.
Discharge due to death
If you are a borrower and one of the following occurs:
- Death of borrower
- Death of cosigner
- Death of spouse, dependent, or parent (in this case, the loan may be eligible for discharge if it was used to assist with education expenses of at least one person who died)
- Legal guardianship ceases due to death. An example would be when a parent is no longer able to pay for their child’s tuition and decides to apply for student loan forgiveness through this option instead. If the student does not have enough funds to pay his or her loans on their own yet continues school without them in order for someone else (the guardian) to take over as his/her new legal guardian (the person who will now be responsible for paying off any debts), then it could qualify under this category too.
Discharge due to disability
Discharge due to disability is one of the most common types of student loan forgiveness, and it can be confusing. The Department of Education defines total and permanent disability (TPD) as a medical condition that prevents you from working. To qualify for discharge due to TPD, your medical provider must certify in writing that:
- You’re unable to engage in any substantial gainful activity;
- That your impairment has lasted or will last at least one year; and
- That the cause of this impairment is physical or mental.
Discharge due to bankruptcy
- Bankruptcy is a legal process that allows you to discharge your debts. It’s not a quick or easy process, and it’s definitely not something you should do on a whim. If you’re considering bankruptcy, consult with an attorney to ensure that this action is right for you.
- If your student loans are discharged after the bankruptcy proceedings have been concluded, this will be considered private student loan forgiveness.
Student Loan Forgiveness Program is something you may want to review if you have student loans.
The Student Loan Forgiveness Program is a government program that helps people with student loans. The program pays off the debt for those who qualify, and it can be an attractive option for those who think they might not be able to pay them back.
We encourage you to read more about these different options and find out which one is right for you. There may be specific requirements you have to meet in order to be eligible, but that shouldn’t stop you from looking into this information before making any rash decisions on your loans.