What is student loan debt forgiveness?

Category: Education

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Are your student loan payments becoming so overwhelming, that you’re beginning to fall behind? Student loans usually need paid back in full, but there is something called debt forgiveness, which can allow eligible borrowers to have all or a portion of their debt discharged. The following are some ways you may be able to have your student loan debt forgiven:

Public service loan forgiveness

Some public service employees with student loan debt may qualify for partial student loan debt forgiveness. If you’re caught up on all payments, have made at least 120 payments since October 1st, 2007 on your Direct Loans, and you have a public service job, ask your lender—you may qualify to have the rest of your debt forgiven.

Discharge through bankruptcy

Student loan debts are not usually discharged by declaring bankruptcy the way that other loans are. If you file for bankruptcy and have a lot of student loan debt you want to get rid of during the process, you’ll need to plead your case in bankruptcy court. You will only be permitted to discharge debt from student loans through bankruptcy if you’re able to show that paying back those loans would result in serious financial struggle for yourself and/or your dependents.

Teacher Loan Forgiveness

If you have been employed as a full-time teacher for five consecutive years in a low-income secondary school, elementary school, or educational service agency, you may qualify for up to $17,500 in student loan debt discharge. Debt from a PLUS loan is not eligible for discharge under teacher loan forgiveness, nor are loans that were taken out prior to October 1st, 1998.

Total and Permanent Disability (TPD) discharge

You may be eligible to have your student loan debt eliminated through a Total and Permanent Disability (TPD) discharge if you are permanently disabled. The U.S. Department of Education will assess your exact situation to decide if you are eligible for this type of loan forgiveness. Furthermore, in order to qualify for this type of loan forgiveness, your student loan must be one of the following: a William D. Ford Federal Direct Loan, Federal Family Education Loan, or a Federal Perkins Loan. Additionally, if you were given a TEACH Grant and didn’t fulfill the requirements due to your disability, you may not be obligated to pay back the grant money.

If your request is turned down

Most of the time, you won’t be able to appeal a rejected request, as all decisions are usually final. If your request for student loan debt forgiveness is turned down, you’ll still need to pay back what you owe. But if you are seeking a false certification discharge or a forged signature discharge, you may be able to appeal for loan forgiveness through the U.S. Department of Education.

Even if you can’t get your student loan debt forgiven, you may be able to make your payments more affordable. However, lowering your student loan payments will usually cost you more money in the long run, because it means paying more in interest as the result of lengthening the life of your loan. Instead of extending your loan as a way to lower your payments, why not get rid of that student loan debt completely, once and for all?


If you’re receiving long-term payments from an annuity or structured settlement, receiving that money sooner can make it easier to tackle large amounts of debt. Why not access the money that rightfully belongs to you and pay off that debt? At Peachtree Financial Solutions, we can purchase some or all of your future payments and provide you with that money sooner, in the form of a lump sum. Many of our customers use their lump sum of cash to lessen or get rid of debt, and we want to help you do the same. Contact Peachtree Financial Solutions today for more information on selling future payments for a lump sum of cash!


Nothing above is meant to provide financial, legal, or tax advice. You should meet with appropriate professionals for such services.

Tags: bankruptcy, disability, loans, Student Loans

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