How to Get Your Student Loans Cancelled

You may be able to get your student loans cancelled if you meet certain criteria. Learn more about how to get your student loans cancelled.

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Introduction

As the cost of college increases, so does the amount of debt that students must take on to pay for their education. According to the Institute for College Access & Success, the average student loan debt for the Class of 2017 was $28,650.

With such a large financial burden, it’s no wonder that many graduates are looking for ways to get their student loans cancelled. Unfortunately, there is no one-size-fits-all solution for getting rid of student debt. However, there are a few options that may be available to you depending on your circumstances.

In this guide, we’ll go over some of the most common ways to get your student loans cancelled as well as some lesser-known options that you may not have considered. We’ll also provide tips on how you can avoid falling into debt in the first place.

The Different Types of Student Loans

There are four types of student loans: Federal Perkins Loans, Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.

Federal Perkins Loans are need-based loans that are awarded to students with exceptional financial need. The interest rate on Federal Perkins Loans is 5%.

Direct Subsidized Loans are need-based loans awarded to undergraduate students with financial need. The interest rate on Direct Subsidized Loans for loans first disbursed on or after July 1, 2017 and before July 1, 2018 is 4.45%.

Direct Unsubsidized Loans are not need-based loans. The interest rate on Direct Unsubsidized Loans for loans first disbursed on or after July 1, 2017 and before July 1, 2018 is 4.45%.

Direct PLUS Loans are not need-based loans. The interest rate on Direct PLUS Loans for loans first disbursed on or after July 1, 2017 and before July 1, 2018 is 7%.

The Different Ways to Get Your Loans Cancelled

There are a few ways that you can get your student loans cancelled. The first way is to work for a non-profit organization. If you work for a non-profit organization, you can have your student loans forgiven after 10 years. The second way is to join the military. If you join the military, you can have your student loans forgiven after 5 years.

Loan Forgiveness Programs

The first step to getting your loans forgiven is to make sure that your loans qualify for one of the many loan forgiveness programs.

There are four main loan forgiveness programs:
-The Public Service Loan Forgiveness Program
-The Teacher Loan Forgiveness Program
-The Perkins Loan Cancellation and Discharge Programs
-The Nurse Loan Forgiveness Program.

To qualify for the Public Service Loan Forgiveness Program, you must work for a government organization or a nonprofit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code. You must also have made 120 qualifying monthly payments on your Direct Loans after October 1, 2007.

To qualify for the Teacher Loan Forgiveness Program, you must teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency. You must also have made 120 qualifying monthly payments on your Direct Loans after October 1, 2007.

To qualify for loan cancellation under the Perkins Loan Cancellation and Discharge Programs, you must be a teacher, nurse, medical technician, or law enforcement or correctional officer. You must also have made 120 qualifying monthly payments on your Direct Loans after October 1, 2007.

To qualify for nurse loan forgiveness under the Nurse Loan Forgiveness Program, you must be employed as a full-time nurse for five years at a health care facility that serves low-income patients. You must also have made 120 qualifying monthly payments on your Direct Loans after October 1, 2007.

Cancelling Your Loans Through Bankruptcy

Bankruptcy is one of the few ways that you can get your student loans cancelled. However, it’s important to note that you can only have your federal student loans discharged through bankruptcy if you can prove that repayment would cause an undue hardship.

To discharge your loans through bankruptcy, you’ll need to file a petition with the court and attend a hearing. At the hearing, the court will decide whether or not to discharge your loans. If the court decides in your favor, your loans will be cancelled and you will no longer be responsible for repaying them.

It’s important to note that you can only have your federal student loans discharged through bankruptcy if you can prove that repayment would cause an undue hardship.

When You Shouldn’t Cancel Your Loans

Exception: If you’re close to paying off your loans
If you have federal loans, you might be able to have them forgiven if you work in certain public service jobs or if you meet other conditions. But if you’re close to paying off your loans anyway, it might not be worth the hassle of trying to get them forgiven. You could end up paying more in the long run.

How to Avoid Defaulting on Your Loans

Defaulting on your student loans has serious consequences. If you default, your loan balance will increase because of late fees, collection costs and interest that accrues. Your credit score will suffer, making it difficult to buy a car or get a mortgage. And, the government can take your tax refund or your wages. You might even end up in jail.

Here are some tips to help you avoid defaulting on your student loans:

-Know your repayment options and choose the one that best fits your situation.
-Make sure you have enough money to cover your monthly payment. If you can’t afford your payments, contact your loan servicer immediately to discuss your options.
-Pay on time each month. Set up automatic payments if that will help you remember.
-If you can’t make a payment, contact your loan servicer right away to discuss your options.
-Monitor your loan balance and keep track of how much you owe.
-Know who to contact if you have questions about your loans or need help with repayment.

Conclusion

The best way to get your student loans cancelled is to work with your loan servicer and document any difficulty you’re having making payments. You may be eligible for a deferment or forbearance, which would allow you to temporarily stop making payments or make smaller payments. You can also look into income-driven repayment plans, which base your monthly payment on a percentage of your income. If you’re having trouble making payments, reach out to your loan servicer as soon as possible so they can help you find a solution.