Can I Get Forgiveness or Cancellation of My Student Loans in Arizona?
If your student loans are canceled, you don’t have to repay them. To qualify for loan cancellation (also called "discharge" or "forgiveness"), you must meet very specific requirements that depend on the type of student loans you have and when you got them.
Photo Daniel Kulinski via Flickr Creative Commons
Federal Student Loans
You may be able to cancel your federal student loans under the following circumstances. If your loans are eligible for discharge, it usually doesn’t matter whether you’re current on your payments or in default. In some cases, you may even be entitled to a refund for loan payments you’ve already made.
If you have federal Perkins loans, scroll down to the bottom of this list for information that applies specifically to you.
Death of the Borrower
Federal student loans are canceled if the borrower dies. (For a PLUS loan, the loan is canceled if either the student or both parents have died.) A family member or the executor of the estate must send a copy of the death certificate to the loan servicer.
Permanent Total Disability
If you become totally and permanently disabled, you can cancel your federal student loans. To do this, you must prove your disability to the U.S. Department of Education. For details, see Total and Permanent Disability Discharge on the U.S. Department of Education website. Also, check out the Disability Discharge Self-Help Packet offered by Student Loan Borrower Assistance (SLBA).
When you’re ready to apply, you can begin the disability discharge application online.
Public Service Employment
You may be able to cancel your Federal Direct Loans after you make 120 on-time, monthly payments -- that’s ten years' worth -- while working at a public service job. To find out what types of employment qualify and what kinds of loans you can cancel, see Public Service Loan Forgiveness on the U.S. Department of Education website.
Military service is covered by the public service loan forgiveness program discussed just above. Except for Perkins loans (see below), there are no additional federal student loan cancellation programs for members of the Armed Forces.
Teaching Low-Income Students
If you have been teaching full-time in a low-income elementary school, secondary school, or educational service agency for at least five years, you may be able to cancel part or all of your loans. For details, see Teacher Loan Forgiveness on the U.S. Department of Education website.
You may be able to cancel your federal student loans if your school closes either while you are enrolled or within 90 days after you withdraw. You qualify only if you were unable to complete your educational program because of the closure. For complete details, see Closed School Discharge on the SLBA website. You can find a link to the closed school discharge application below.
If you have questions about your closed school, send an email or make a phone call to your closed school representative on this list. If you don't qualify for a federal school-related discharge, you may be able to get relief from a state tuition recovery fund (see below).
False Certification of Student Eligibility or Unauthorized Payment
You may be able to cancel your student loans for one of the following reasons:
- Your school falsely stated that you were eligible for loans based on your ability to benefit from its training.
- Your school applied for or obtained loans in your name without your authorization.
- Your loan application was the result of identity theft.
- Your school certified your eligibility for loans, but you were later disqualified from employment in the occupation for which you were being trained.
For complete details, see False Certification Discharge on the SLBA website. You can find a link to these discharge applications below.
You may be able to cancel your federal loan if you left school early but the school didn’t refund money it owed on the loan. You can cancel only the amount of the unpaid refund. For details, see Unpaid Refund Discharge on the SLBA website.
Perkins Loan Cancelation Programs
The rules for canceling federal Perkins loans are slightly different than those for other types of federal loans; they include some of the options above and many additional types of public service work.
To see a complete list of cancellation options for Perkins loans, see the Federal Perkins Loan Cancellation and Discharge Summary Chart on the U.S. Department of Education website.
State Tuition Recovery Funds
Many states maintain tuition recovery funds to assist students who enrolled at fraudulent schools. A state program may help you even if you don't qualify for a federal school-related cancellation program.
If you were the victim of a fraudulent school and you haven't been reimbursed for the costs of enrollment, contact the Arizona Student Tuition Recovery Fund at 602-542-5709 to find out whether you are eligible for state relief.
Private Cancellation Programs
Some private employers offer student loan repayment programs as incentives for their employees. Ask your employer for more information.
Private Student Loans
Private student loan companies aren't legally required to participate in loan cancellation programs. Unless the lender promised you could cancel your loans under certain circumstances, it’s up to them to decide whether to give you a cancellation option. Some large lenders, such as Sallie Mae and Wells Fargo, do have limited loan discharge programs -- for example, if the borrower dies or becomes totally and permanently disabled.
Review your loan contract to see whether it includes provisions for cancellation, and talk to your lender if you have questions. If you can’t get clear information from your lender, you can file a student loan complaint with the Consumer Financial Protection Bureau (CFPB).
Be aware that if a private lender cancels your loan, you will have to report it for tax purposes. (The idea is that if a lender cancels a loan, the money you now don't have to pay is just like income.) For more information, consult a tax professional.
State and University Student Loans
If you received a loan from a state student loan program or directly from your school, contact the lender to ask about loan forgiveness or cancellation options. For state programs, if you can't easily locate your loan servicer, you may want to begin by contacting the Arizona Commission for Postsecondary Education for information.
Federal Loan Cancellation Applications
The links below will take you directly to a variety of applications for canceling your student loans. Before completing a cancellation application, contact your loan servicer to be sure it is the most recent version. Your servicer will handle your application when it is complete.
Discharging Student Loans in Bankruptcy
To get rid of student loans in a bankruptcy proceeding, you'll need to convince the bankruptcy court that paying your loans would cause you "undue hardship." This is a difficult standard to meet. To learn more, see Can I Discharge My Student Loans in Bankruptcy?
For more information about programs that can help you wipe out your student loan debt, see Student Loan Debt Forgiveness Programs.
For general advice on handling your student loans, see Top Tips for Dealing With Student Loan Debt.
If you're struggling to make payments, see What If I Can't Pay My Student Loans?
If you need additional support, see How to Get Help With Student Loan Problems.