Understanding Student Loan Forgiveness, Cancellation, Discharge and Repayment Plans

ByKylie Ora Lobell

Updated: November 17, 2022

ByKylie Ora Lobell

Updated: November 17, 2022

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Student loan debt is higher than ever. Students are taking out federal and private loans to pay for college costs, which often take years to pay back. On average, they pay off their debt in 20 years. For some professional graduates, it takes more than 45 years to clear.

This kind of debt can weigh heavily on a person, especially if they aren’t making enough money to keep up with their monthly payments and rising interest. That’s why they may look into student loan forgiveness, cancellation, discharge and repayment plans.

If you are facing mounting student loan debt, you have options. By learning about them, you attempt to free yourself completely of this debt, or, at the very least, make it easier to pay.


Differences Between Forgiveness, Cancellation, Discharge and Repayment

Forgiveness, cancellation and discharge all mean that you don’t need to repay some or all of the loan. There are also such things as repayment plans. Find out what each one means so you can explore the different choices you may have.


Current State of Student Loan Forgiveness

The U.S. government has been trying to address the student loan debt crisis — Americans owe $1.75 trillion in federal and private student loan debt. As of February 2022, the Biden Administration approved $415 million in a student loan forgiveness program for borrowers who were defrauded by their schools. These are usually for-profit schools that misrepresent themselves to students. This is called the Borrower Defense Program. Under it, 16,000 borrowers will receive student loan forgiveness.

Borrowers who qualify will be contacted, but if you believe you are eligible for this program, you can use the following resources.

  • StudentAid.gov: On this official government website, you can find out more about the program. Also, you can see if you qualify.
  • Borrower Defense Program Application: Do you think you are eligible? Then apply for the Borrower Defense Program on this site.
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While you may be eligible for forgiveness, cancellation and/or discharge programs, you are still held responsible for paying back your loans. By finding a flexible option that works for you, you can reduce student loan repayment stress and focus solely on decreasing the debt.

List of Loan Forgiveness, Cancellation and Discharge Options

If you’re struggling to cover the costs of your loan payments, loan forgiveness, cancellation and discharge programs may offer you a good solution. Learn more about what these options include below to help you determine which one is best for you.

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Yes, there’s a difference between student loan forgiveness and forbearance. While forgiveness means that you may not have to pay back some or all of your loan, forbearance allows you to lower or suspend your payments temporarily, usually for up to 12 months, while you are going through a financial hardship.


Different federal programs offer you student loan forgiveness or cancellation of your debt. You’ll need to look into the choices to see which ones you may qualify for. Please use the tables below and add in the programs in the appropriate table.

Forgiveness Programs
Cancellation Programs
Discharge Programs


You may be eligible for forgiveness, cancellation or discharge if you go into a certain profession. For example, if you become a medical professional, teacher or doctor, or you go into the military or public sector, you could become eligible. This is to encourage people to go into these fields.

Programs for Teachers
Programs for Medical and Health Professionals
Programs for Military Members
Programs for the Public Sector
Programs for Other Careers


You could also get your loan discharged, forgiven or canceled if you experience disability or bankruptcy or you pass away — then your family wouldn’t have to have to pay back your loan. It all depends on whether or not your disability prevents you from working or you qualify for discharge due to hardship under your bankruptcy filing.


If you pass away with student loan death, your family can take the appropriate steps to get it discharged so they don’t have that extra burden on them.

Available Programs Due to Death


If you have a disability and you are unable to work, then you could potentially qualify for a program for individuals with disabilities.

Available Programs If You Are An Individual With Disabilities


There is a myth that you cannot get student loan debt discharged. You can, but it certainly is going to be harder than trying to get other types of debt discharged. Filing for Chapter 7 or Chapter 13 is not enough; you will also have to file an adversary proceeding.

Available Programs Due to Bankruptcy

How Do You Apply for Forgiveness?

You can apply for forgiveness through StudentAid.gov. It depends on the program you are applying for. Navigate to that official government website to find the specific application you need. You will need to prove how you qualify. There is no average timeframe for when you will hear a reply.

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You should continue making payments on your student loans during the application process, just in case you don’t get approved. You don’t want to accidentally default on your loans.

Next Steps If You’re Approved

If you get approved for student loan forgiveness, there are a few different things that will occur.


Notification of approval

You will be notified about which program you have qualified for under student loan forgiveness, cancellation or discharge. You’ll find out if you qualified for full or partial forgiveness. If you were approved for the former, when you log into your loan account, your debt will be down to $0. If you were approved for the latter, you’ll determine how much you still need to pay back and the terms of your repayment.


Refunding of payments

In some cases, you will receive a refund for payments you already made. For example, if you were approved for the Public Service Loan Forgiveness and you made more than 120 qualifying payments, those would be counted as overpayments and you’d get a refund.


Credit history change

If you had negative marks on your credit report due to your student loans, these could go away, depending on the type of program you qualified for. This means that your credit report could improve, which will make it easier for you to get approved for future loans. If your cancellation erases your default, then you could once again become eligible for federal student loan aid.


You could get taxed.

Right now, under the Biden Administration, all student loan forgiveness will stay tax-free until the end of 2025. But if this policy is not renewed, then income repayment forgiveness is going to be taxed as income. If you receive notification that your student loans are forgiven, you’ll get a cancellation of debt form (1099-C) in the mail to file when doing your taxes.

Next Steps If You’re Denied

There is the possibility that you will be denied for student loan forgiveness. Here are some steps you should take if that occurs.


Review your application

You can make sure that you properly filled out your application by contacting a representative in the U.S. Department of Education's office of Federal Student Aid to ensure it details all the necessary information.


Try to appeal the denial

In some instances, you may be able to appeal the denial and get your application reexamined. For example, if you are applying for the ​​Total and Permanent Disability (TPD) discharge program, you could have the chance to appeal within one year of your denial date. If your condition has worsened, you may be able to reapply and try again.


Look into other programs

There is the possibility that you could qualify for another program. Go on StudentAid.gov to see if there are alternative programs you might be able to apply to based on your career, disability, or bankruptcy status, or your income.


What Happens If You Don’t Qualify: Repayment and Other Alternatives

If you don’t qualify for forgiveness, cancellation or discharge, it can be disheartening. But there are other options you can go after depending on your specific situation. You don’t need to give up at this point. It may take some time and creative thinking, but there are alternative solutions.

Repayment Plans

Available Repayment Plans and Options

Other Alternatives

If you are not a candidate for forgiveness, cancellation, discharge or repayment, then there are other roads you can go down. They include debt strategy plans, refinancing, budgeting and more. With a plan of action in place, you can pay off your student loan debt sooner and hopefully relieve yourself of this burden once and for all. Then, you can start to save for your future and fulfill your financial goals.


Resources for Student Loan Forgiveness

There are many resources available to help when it comes to student loan forgiveness. Here are some places to start.

About Kylie Ora Lobell

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Kylie Ora Lobell is a freelance copywriter, editor, marketer, and publicist. She has over 10 years of experience writing in the personal finance, legal, and business space for publications and brands like Legal Management Magazine, LegalZoom, Forbes, EMC, IBM, Dell, Mastercard, Visa, and NCR. Her bylines include The Washington Post, The Los Angeles Times, The Jewish Journal of Los Angeles, New York Magazine, and Time Out NY/LA. Her website is KylieOraLobell.com.