The Most Common Reasons for a Student Loan Discharge

There are a few ways that a student loan can be discharged. When a loan is discharged, it is cancelled and you no longer have to make payments on it. A discharge is not very common, but a few circumstances warrant discharge:


If the student for whom the loan was taken out dies, the loan is generally cancelled. This is true if the borrower died on or after July 23, 1992. To verify a borrower’s death, the servicing agency should get an original death certificate.

Total and Permanent Disability

If you are totally and permanently disabled, you may be released from your debt . A physician must certify that you are permanently disabled. You must also meet other requirements during a three year conditional discharge period. If you are a veteran, you should provide documentation from the United States department of Veterans Affairs that indicates that you have been determined unemployable due to a service related condition. With this documentation, you will not require a doctor to complete section 4 of the discharge application.

False Certification

You can receive a loan discharge if your loan was falsely certified by your school. False certification can mean  a number of things. Perhaps  your school signed your name without your permission on the loan application or promissory note. Perhaps you have a physical, mental, or legal status condition that would prevent you from getting employed in your field of study. You can also get your loan canceled if you were a victim of identity theft.

Your School Was Closed

You can get your loan canceled if your school was closed and you were not able to finish your course of study. This is called a Closed School Discharge. You are still eligible for this  discharge if you withdrew from the school, or you have an approved leave of absence not more than 90 days before the school closed.

Full Time Teaching

If you become a full time teacher for five years after graduation, you might  be eligible for up to $17,500 in loan forgiveness. The highest amount of loan forgiveness is for certain high need specialties. It can amount to up to $5,000 for other specialties. This is called the Teacher Loan Forgiveness Program.

Military Service

If  you serve in the military after graduation, you may be able to have your loans forgiven. There are a number of such programs. For example, if you served for a year in a hostile area, you might get part of your National Direct Student Loan or Perkins Loan forgiven. In order to find out if you qualify, and you are already out of the military, you should send a copy of your DD214 discharge form to the agency that administered your loan.


As of 1998, you cannot have your student loan automatically forgiven if you declare bankruptcy. You must be able to show you will suffer “undue hardship” if you are forced to pay back your loan.

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