A borrower is qualified for student loan forgiveness in the event of attending school closure, total and permanent disability, death, and in rare cases, bankruptcy, according to the U.S. Department of Education. Teacher loan forgiveness and public service loan forgiveness programs are also available.
A borrower is required to repay outstanding loans whether or not their education is completed, even if they are unable to find work related to the original field of study or are unhappy with the education received, states the U.S. Department of Education.
In some circumstances, a discharge of student loans may be issued. These discharges are based on employment, disability, the closure of a school, or other circumstances. Loans eligible for discharge include Direct Loans, Federal Family Education Loans (FFEL) and Perkins Loans, according to the U.S. Department of Education.
For loan discharges due to total disability, a borrower must be able to show that they are totally and permanently disabled in one of three ways. Veterans can submit documentation from the U.S. Department of Veterans Affairs stating that they are unemployable due to service-related disability. A borrower can also submit a certification from a physician stating that they are totally and permanently disabled, and unable to engage in any substantial gainful activity due to the disability. Lastly, if a borrower is receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, they can submit a Social Security Administration notice of award stating that the next scheduled disability review is within five to seven years from the date of the most recent SSA disability determination, states the U.S. Department of Education.
If a borrower passes away before repaying the entirety of the loan, the loan is discharged, according to the U.S. Department of Education. A PLUS loan will be discharged if the parent borrower dies before repayment or if the student on whose behalf the loan was obtained dies.