Do You Qualify for Student Loan Cancellation?

In recent years, student loan cancellation has become part of the national dialogue. But student loan cancellation has existed for years for borrowers who meet certain criteria.

Programs for federal borrowers include cancellation, discharge, and forgiveness. But if you don’t qualify for any of the current programs, the Biden administration’s student loan debt relief plan—still held up in the Supreme Court—could provide thousands of dollars of relief to many borrowers.

Here’s everything you need to know about student loan cancellation—types of programs, qualification requirements, and how to apply.

In this guide:

What is student loan cancellation?
Difference between cancellation, forgiveness, and loan discharge
Which student loans can be canceled?
Student loan cancellation for low-income borrowers
Can you discharge student loans in bankruptcy?
How to cancel student loans
What to do while your request for student loan cancellation is reviewed
What happens after student loan cancellation?
What if you don’t qualify for student loan cancellation?
FAQ

What is student loan cancellation?

In most cases, student loan cancellation means the borrower is released from repaying the remaining balance on their loans.

This most often applies to federal loans. Because of that, it’s important to know your loan type. The two types of student loans are federal and private.

What type of loans do I have?

Federal student loans: These loans are funded by the government, and the terms and conditions are set by law. You can check the National Student Loan Data System, which lists all federal loans. Log in using your Federal Student Aid (FSA) ID. If you need additional help, you can call the FSA Information Center at 1-800-433-3243.

Private student loans: These loans are funded by private companies or corporations including banks and credit unions. Each company sets the terms and conditions for the loans. You can find your private student loans listed on your credit report and then contact the loan provider.

Do you qualify for federal student loan cancellation?

To qualify for student loan forgiveness through the federal government, you first need to confirm you have federal loans. If so, you might qualify for student loan cancellation via Public Service Loan Forgiveness (PSLF). (More about PSLF below.)

You may qualify for student loan cancellation if you work in one of the following fields:

Emergency management
Military
Public safety
Law enforcement
Public health
Public education
Social work
Public service for elderly, children, or adults with disabilities
Nonprofit organizations
Government (not members of Congress)

You might also qualify for student loan cancellation if you work in a profession ineligible for PSLF but have completed an income-based repayment plan. (This often involves making payments for at least 20 years.)

Student loan cancellation differs from student loan discharge. Student loan discharge is based on extenuating circumstances such as school closure, bankruptcy, death, or disability.

The program you apply for—especially PSLF or an income-based repayment plan—determines how and when your loans are canceled. Remember, you can’t cancel student loans because you didn’t finish school, don’t like your degree, or can’t find a job in your field.

These programs are separate from the Biden administration’s one-time federal student loan debt relief that proposes $10,000 to $20,000 of student loan forgiveness based on loan type and income.

Do you qualify for private student loan cancellation?

Unlike federal student loans, which come with cancellation protection and qualify for several repayment options, your private student loans are unlikely to have cancellation options. Private loans also do not qualify for any forgiveness plans proposed by the federal government.

However, some private loan companies offer forbearance, deferment, and interest-only payment options for limited periods. The options available depend on your lender, and the best way to get more information is to contact your loan servicer.

In extreme circumstances, such as death or disability, a borrower with private loans might qualify for student loan discharge that waives the entire balance. It is also possible to discharge private student loans through bankruptcy. The borrower must prove undue hardship and file an adversary hearing, which is a separate action.

>> Read more: Private Student Loan Forgiveness

What’s the difference between cancellation, forgiveness, and student loan discharge?

Student loan cancellation, forgiveness, and discharge seem similar, and you may hear them used interchangeably. Two are identical, but one is distinct.

Cancellation: This term refers to when the remaining balance on your loan is erased due to your income or your having fulfilled the government’s requirements for a student loan forgiveness program, such as the Public Service Loan Forgiveness (PSLF) program for borrowers working in public service jobs.

Forgiveness: Student loan forgiveness is the same as cancellation. It’s tied to certain federal programs in which student loan balances are forgiven based on job type and tenure.

Discharge: This term refers to student debt being absolved when borrowers cannot make payments. This relates to situations including death, disability, bankruptcy, and the closure of the school.

Which student loans can be canceled?

A variety of programs cancel student loans, and it can be confusing to navigate. The easiest way to figure out whether your loans can be canceled is to browse by program.

Once you find a cancellation or discharge option that applies to your situation, you can confirm whether your federal loan type is eligible.

Public Service Loan Forgiveness

Tied to employment type and length of time at a qualifying job, this federal loan forgiveness program requires an application.

Loan type	Length of time	Conditions
Direct Loans	120 qualifying payments	Must work full-time for a qualifying employer (often a nonprofit or the government)

Teacher Loan Forgiveness

Like the name implies, this federal loan forgiveness program only applies to teachers. To cancel student loans, a teacher must work at a low-income school. Borrowers cannot receive benefits for both PSLF and Teacher Loan Forgiveness for the same payments.

Loan type	Length of time	Conditions
Direct Loans, Federal Family Education Loans	5 years of teaching full-time for up to $17,500 forgiven	Must teach at a low-income school and complete the application

Perkins Loan Cancellation

This type of federal loan cancellation only applies to a specific type of loan—Perkins Loans. Teaching employment requirements exist for this program, and cancellation occurs as a percentage each year.

Loan type	Length of time	Conditions
Perkins Loans	A portion of the loan is canceled after each year of qualifying full-time employment (i.e., 15% after years 1 and 2)	Must work full-time in qualifying education roles

Total and Permanent Disability Discharge

Borrowers who are permanently or totally disabled might qualify for disability discharge through a documentation and application process.

Loan type	Length of time	Conditions
Direct Loans, Federal Family Education Loans, Perkins Loans	None	Must complete application and disability documentation process

Discharge due to Death

Student loan death discharge occurs when the borrower dies.

Loan type	Length of time	Conditions
Direct Loans, Federal Family Education Loans, Perkins Loans, PLUS Loans (if the student dies)	None	Family member or other representative must complete application and documentation process

Bankruptcy Discharge

Student loan discharge due to bankruptcy is not automatic, and borrowers can only apply if they declare bankruptcy.

Loan type	Length of time	Conditions
Direct Loans, Federal Family Education Loans, and Perkins Loans	None	Must file for bankruptcy and complete discharge application process

Closed School Discharge

This student loan discharge program is for borrowers whose school closes while they are still attending or soon after they withdraw.

Loan type	Length of time	Conditions
Direct Loans, Federal Family Education Loans, and Perkins Loans	None	Must complete application process

For a full list of federal loan discharge and cancellation options, you can view the government’s official Student Aid site.

Student loan cancellation for low-income borrowers

If you don’t qualify for student loan cancellation due to issues such as disability or school closure, you might still be able to cancel student loan debt through forgiveness.

The federal government offers a number of income-driven and graduated repayment options that, after a set time, forgive your remaining student loan balance.

Program	Length of time	Payment terms
Income-Based Repayment (IBR)	20–25 years	Payments are 10% to 15% of discretionary income, and the remaining balance is forgiven after the repayment period ends.
Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE)	20–25 years	Payments are 10% of discretionary income, and the remaining balance is forgiven after the repayment period ends.
Income-Contingent Repayment (ICR)	25 years	Payments are whichever is less: 20% of discretionary income, or repayment plan amount calculated based on fixed payment over 12 years, adjusted according to income.

In all of the above programs, the remaining student loan balance is forgiven after the repayment period.

Can you discharge student loans in bankruptcy?

The widely held belief is that student loans cannot be discharged in bankruptcy, but it is possible.

Most borrowers do not complete the steps to apply for student loan discharge in bankruptcy. In fact, a recent study from the Duke Law Journal found that almost half of student loan debtors would get relief if they applied.

As it stands, only about 0.1% of student loans are discharged in bankruptcy. Different factors—such as credit-case selection strategies—contribute to why this number is so low, but it is possible to discharge student loans in bankruptcy.

To cancel student debt in bankruptcy borrowers must prove undue hardship, file a separate action called an adversary proceeding, and follow the steps outlined by the federal government.

Alternatives to bankruptcy

If you are having trouble paying your loans but don’t qualify for bankruptcy discharge, explore forbearance and deferment.

Deferment: Eligible reasons for deferment include economic hardship, cancer treatment, military service, enrollment in school, and unemployment. Once you know the type of deferment you need, you can complete the necessary application.

The type of deferment determines how long it lasts, but the pause in payments can extend up to three years for some types and for as long as the situation lasts for others. It’s important to note your loans might still accrue interest during this period, and it does not cancel student loan debt.

Forbearance: If you don’t qualify for deferment, you can also explore forbearance, another way to pause student loan payments for a certain period. The application process begins with a written request via form, and your loan servicer can help you apply for free. Similar to deferment, forbearance does not cancel student debt.

How to cancel student loans

The process of student loan cancellation might feel overwhelming, but taking it step-by-step and getting help as needed can make it feel more manageable. Here’s how to begin.

Confirm your loan type and loan servicer. To start, view your account dashboard and click on the “My Loan Servicers” section. If you prefer to figure it out over the phone, you can call the Federal Student Aid Information Center at 1-800-433-3243.
Once you know the type of loan you have, check the chart above to figure out whether your loan type is eligible for certain programs.
Next, complete the application process for your program. The Federal Student Aid website has a section for each program with a link to apply.
If you need additional support or have specific questions, you can contact your loan servicer, or connect with the Federal Student Aid Ombudsman Group at 1-877-557-2575.

What to do while your request for student loan cancellation is reviewed

A request to cancel student loan debt doesn’t mean your loans are erased or no longer your responsibility. You may be responsible for monthly payments until your loan servicer approves your request, so confirm with your loan provider whether you should continue making regular payments to avoid becoming delinquent.

If you are struggling to repay your loans during the cancellation review, consider options such as deferment and forbearance to halt your requirement to pay.

Your servicer could deny your application, or only a portion of your loans may qualify for cancellation. Because defaulted loans are often ineligible for cancellation until loan rehabilitation occurs, it is a good idea to continue making necessary payments while you wait.

What happens after student loan cancellation?

After student loan cancellation is complete, you are no longer required to make monthly payments, and the remaining balance is forgiven.

In terms of tax liability, the American Rescue Plan Act of 2021 states borrowers do not have to include the balance of the loan as taxable income on their tax returns between 2021 and 2025.

Loans forgiven under Public Service Loan Forgiveness are not considered taxable income either. But if you have specific questions or need additional help, it’s a good idea to speak with your tax advisor.

Once your loan is canceled, you will no longer see it on your credit report, and it will not show up in your servicer’s online loan portal.

What to do if you don’t qualify for student loan cancellation

Not all borrowers qualify for student loan cancellation. The circumstances are specific and often narrow.

If you don’t qualify to cancel student debt but still need help repaying your loans, consider deferment and forbearance. As we discussed, there are options for most federal loans that can allow you to get on your feet while temporarily pausing payments.

	Deferment	Forbearance
Length	Length of deferment depends on the type and often lasts as long as you qualify.	The maximum length of forbearance is 1 year at a time, but you can apply again after the year is over.
How to qualify	Economic hardship, cancer treatment, military service, enrollment in school, unemployment, or other qualifying event.	Temporary hardship related to finances, medical expenses, change in employment or “other.”
Interest	No interest accrues on Perkins loans and Subsidized loans.	Interest accrues on all loans.
How to apply	Contact your loan servicer.	Complete the General Forbearance Request form.

FAQ

How do I know whether I qualify for President Biden’s one-time student loan cancellation?

Courts have blocked the Biden Administration’s proposed one-time student loan debt relief, but the administration is appealing the decision, and relief might still happen.

To qualify for the one-time student loan cancellation, you must have federal loans. Federal loans in default also qualify. You also need to have received the funds on or before June 30, 2022, and meet the income requirements.

The income requirements to cancel student loan debt are below:

Tax filing status	Adjusted gross income amount
Single	Under $125,000
Married, filed separately	Under $125,000
Married, filed jointly	Under $250,000
Head of household	Under $250,000

Is it too late to apply for the Biden administration’s one-time student loan cancellation?

It’s not too late to apply for the Biden administration’s one-time student loan cancellation. Courts have issued orders blocking the program, but applications that have been submitted are still on file.

Applications are not open now since courts have blocked the program. But to stay informed about updates, subscribe to the U.S. Department of Education, or check the FSA website.

When will we know whether Biden’s one-time student loan cancellation will go through?

The Biden administration requested the Supreme Court review the orders that are now blocking the program. There is no specific date when a decision will be reached.

As a result, the pause on student loan payments is extended again. According to the U.S. Department of Education, student loan payments will resume 60 days after the debt relief is implemented (or the litigation is resolved). If the case isn’t resolved by June 30, 2023, payments will begin 60 days later.