How Do I Cancel Student Loan Debt?

by A. Elizabeth Freeman, Demand Media

    Despite the formation of an online group in 2009 urging the United States government to cancel all student loans in an effort to boost the economy, many young college graduates struggle to pay the amount due on their loans each month. While getting your student loans canceled or forgiven is not the easiest of tasks, it can be done, provided you are willing to make certain career choices.

    Step 1

    Work in a public service job for a period of 10 years. Under the Public Service Loan Forgiveness Program, eligible jobs include teaching at a public high school or college, working as a nurse or doctor, and working in law enforcement. You must make 120 monthly, on-time payments of your loan made under the William D. Ford Federal Direct Loan Program, called a Direct Loan, while you are employed in a public service job; you cannot default or miss a payment. At the end of the 10-year period, the government will cancel any outstanding Direct Loans you have, provided you are still employed in a public service job when you apply for and receive forgiveness. Payments must have been made on a Direct Loan after October 1, 2007 to qualify for the Public Service Loan Forgiveness.

    Step 2

    Serve in the U.S. Armed Forces. If you receive a National Defense Student Loan, which is currently part of the Federal Perkins Loan Program, the government will forgive a portion of the loan after you serve for a certain period of time. If you serve for a year in the U.S. Army, Navy, Air Force, Marine Corps or Coast Guard in a dangerous area, you can receive partial cancellation of your National Defense Student Loan.

    Step 3

    Teach for at least five years in a low-income school district or in an underserved subject area. After five years, you can cancel a portion of your Federal Family Education or Direct loan, or up to 100 percent of a Perkins loan. Complete the Teacher Loan Forgiveness application and mail it to the holder of your loan. If you have several loans, you will have to complete a separate application for each. You will need to contact the holder of your Perkins loan to obtain the appropriate cancellation forms.

    Tips

    • If you become permanently disabled and are unable to work, you can cancel your loans. You must complete a Total and Permanent Disability discharge application, have a certified doctor verify your disability and provide proof of income before your loans will be canceled.
    • Generally, student loans cannot be canceled in bankruptcy. You can get your loans discharged if you can provide proof that repaying them will cause you "undue hardship," according to the Department of Education. The definition of undue hardship varies from jurisdiction to jurisdiction, though.
    • If you are making payments on a Direct loan on the Income Based Repayment plan, any loan amount remaining after 25 years will be forgiven.
    • To qualify for the Public Service Loan Forgiveness Program, you can hold multiple public service jobs through the course of 10 years. For instance, you can serve on the Peace Corps or on Americorps full time for one year, then get another full time public service job in the subsequent nine years.
    • While the 120 payments do need to be on time, they do not need to be consecutive. For instance, you can serve in the Peace Corp for one year, take a year off and continue to pay your loan, then work in another public service job for the next nine years and still qualify for loan forgiveness.

    About the Author

    Based in Pennsylvania, A. Elizabeth Freeman has been writing professionally since 2007, when she started writing theater reviews for OffOffOnline.com and Theater Talk's New Theater Corps blog. Since then, she has written for Phillyist, TheNest, ModernMom and "Rhode Island Home and Design" magazine, among others. Freeman has an Master of Fine Arts in dramaturgy/theater criticism from CUNY/Brooklyn College.