The continuation of application for student loan forgiveness is still a hot topic. (Photo: Morning Consult)
The continuation of application for student loan forgiveness is still a hot topic, especially since the Supreme Court may overturn President Joe Biden’s plan to cancel up to $20,000 in student debt from the country’s 40 million borrowers.
Differences between student loan forgiveness, cancellation, discharge, and repayment plans
First, we must recognize that not all student debt relief plans are the same, as forgiveness, cancellation, discharge, and repayment options are available.
Because the individual will not be required to make any payments due to the borrower’s job, forgiveness and cancellation are essentially the same.
While discharging a student loan removes the borrower’s obligation to make loan payments, this only applies if the discharge is granted due to circumstances such as total or permanent disability.
Repayment plans are set up to repay student loans based on the borrower’s income, with payments adjusted accordingly.
These are some of the options for canceling or discharging student loans.
READ ALSO: Student Loan Forgiveness Timeline from August 2022 to the Supreme Court Review
The continuation of application for student loan forgiveness is still a hot topic. (Photo: The Washington Post)
Continuation of Application for Student Loan Forgiveness is available for direct loans taken out by government or non-profit organizations employees.
Borrowers with Direct Loans and FFEL Program loans are eligible for a $17,500 loan forgiveness if they teach full-time for five full and consecutive academic years.
Closed School Discharge is available for Direct Loans, FFEL Program Loans, and Perkins Loans. Some students might be eligible for debt cancellation if the school closed while enrolled or after graduation.
Cancellation and Discharge of Perkins Loans
Individuals are eligible for Federal Perkins Loans based on their employment or volunteer service and can be discharged under certain conditions.
Discharge from Total and Permanent Disability
This option is available for Direct, Federal Family Education, and Perkins Loans. To qualify for this discharge, the borrower must be disabled, which also helps with the service obligation of the Teacher Education Assistance for College and Higher Education (TEACH) Grant.
Death-Related Discharge
Even though this occurs in a minimal number of cases, some federal student loans may be discharged following the death of the PLUS loan borrower.
Discharge from Bankruptcy
This occurs in even fewer cases than the discharge due to death, but much information is considered, with declaring bankruptcy not automatically initiating the discharge process.
READ ALSO: Student Loan Forgiveness Debt Relief; Billions Will Be Erased
