Getting rid of student loans in bankruptcy is difficult -- but not always impossible. To succeed, you must convince the court that repaying your student loans would cause you "undue hardship."
You may have heard that getting rid of student loans in bankruptcy is impossible. That's not true--but it is very difficult. To succeed, you must convince a bankruptcy court that repaying your student loans would cause you "undue hardship."
For more information about student loans and bankruptcy, select your state below.
This website from the National Consumer Law Center offers a wide variety of resources to help you handle student loan problems
Guidance and resources to help you determine whether bankruptcy can help you manage or eliminate your student loans.
Most student loans fall into one of two categories:
Federal loans offer many advantages over private loans, including lower, fixed interest rates and more flexible repayment options.
The following chart, adapted from the U.S. Department of Education website, summarizes the important differences between federal and private student loans.
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Federal Student Loans |
Private Student Loans |
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You will not have to start repaying your federal student loans until you graduate, leave school, or change your enrollment status to less than half-time. |
Many private student loans require payments while you are still in school.
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The interest rate on all federal loans made after July 1, 2006 is fixed and is often lower than private loans. View the current interest rates on federal student loans. |
Private student loans can have variable interest rates, some greater than 18%. A variable rate may substantially increase the total amount you repay. |
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Undergraduate students with financial need will likely qualify for a subsidized loan where the government pays the interest while you are in school on at least a half-time basis. |
Private student loans are not subsidized. No one pays the interest on your loan but you.
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You don’t need to get a credit check for most federal student loans (except for PLUS loans). Federal student loans can help you establish a good credit record. |
Private student loans may require an established credit record. The cost of a private student loan will depend on your credit score and other factors. |
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You won’t need a cosigner to get a federal student loan in most cases. |
You may need a cosigner.
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Interest may be tax deductible. |
Interest may not be tax deductible. |
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Loans can be consolidated into a Direct Consolidation Loan.
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Private student loans cannot be consolidated into a Direct Consolidation Loan. |
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If you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments. |
Private student loans may not offer forbearance or deferment options. |
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There are several repayment plans, including (for most loans) an option to tie your monthly payment to your income. |
You should check with your lender to find out about your repayment options. |
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There is no prepayment penalty fee. |
You need to make sure there are no prepayment penalty fees. |
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You may be eligible to have some portion of your loans forgiven if you work in public service. |
It is unlikely that your lender will offer a loan forgiveness program. |
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Free help is available at 1-800-4-FED-AID. |
The Consumer Financial Protection Bureau's private student loan ombudsman may be able to assist you if you have concerns about your private student loan. |
To find out what type of loan you have and learn more about its terms, see What If I Don't Know What Kind of Loan I Have?
For a detailed history of federal student loan programs, we like this article from the Federal Education Budget Project of the New America Foundation.
PLUS Loans are federal student loans for graduate and professional students and parents of undergraduates. PLUS loans made to parents can't later be transferred to the child. The parent who receives the loan must repay it.
Borrowers can take out PLUS Loans up to the cost of attendance, which is determined by the school, minus any other financial aid the student receives. For PLUS Loans made between June 30, 2013 and July 1, 2014, the interest rate was 6.41%. PLUS Loans made between June 30, 2014 and July 1, 2015 carry an interest rate of 7.21%
You must pass a credit check to obtain PLUS Loans. If you don't qualify on your own, you may be able to get PLUS Loans with a cosigner (the Department of Education calls this person an "endorser").
For more details on PLUS Loans, see the U.S. Department of Education website.
A Perkins Loan is a federal student loan for low-income undergraduate or graduate students. From July 1, 1972 until October 17, 1986, these loans were called National Direct Student Loans (NDSLs). Before July 1, 1972, they were known as National Defense Student Loans, or NDSLs.
The interest rate on Perkins Loans is lower than the rate for other federal student loans, and the loan comes with more flexible terms -- such as additional repayment and cancellation options. And Perkins Loans are subsidized by the federal government, meaning you don't pay interest on the loans while you are in school or during periods of deferment.
Also, unlike other types of federal student loans, Perkins Loans are made by your school, using a combination of school and federal funds. This means the school is considered your lender, and you should contact the school directly if you have questions about your loan.
For more information, see Perkins Loans on the Federal Student Aid website.
When it comes to managing student loan debt, most of your choices depend on whether your loans are federal or private. If you're not sure what kind of loans you have, use the National Student Loan Data System. Choose "Financial Aid Review" and supply the requested information to get a list of all federal loans made to you.
To use the system, you will need to supply:
If you need to establish a PIN number, visit www.pin.ed.gov. (The PIN website can be frustrating. If you're having problems setting up, retrieving, or changing your PIN online, call 800-433-3243 for assistance. Press "0" to speak to a live person.)
Once you get to the list of your loans, you can click on each loan to get details about it, including exactly what kind of federal loan it is and who services it.
If you have student loans that aren't on the national database list, it means they are private loans. For more information, you'll need to contact the financial institution that made the loan.
A deferment allows you to temporarily stop paying your federal student loans. You qualify for a deferment if you meet certain conditions -- for example, if you are unemployed and looking for work, or if you return to school at least half time. If you are eligible for a deferment, you can postpone payment on both the principal and interest of your loans. In some cases, the federal government will even pay the interest for you. In other situations, interest continues to accrue during the deferment period.
For more information, see How Do I Postpone My Student Loan Payments?
A student loan forbearance, like a deferment, allows you to postpone or reduce your federal student loan payments for a set period of time. However, it is often easier to get a forbearance than a deferment -- for example, you may qualify even if your loan is in default, or if you are experiencing financial hardship that falls short of conditions for deferment. The downside is that forbearance is usually more expensive than deferment. Interest always accrues during a forbearance, causing your loan balance to grow.
For more information, see How Do I Postpone My Student Loan Payments?
Default is what happens if you fall behind on your student loan payments. For most loans, if you fail to make a payment for 270 days (that's nine months) the loan will go into default. After that, your school, the loan servicer, or the government can take action against you to get back what you owe. You may face serious legal and practical consequences if you default on your student loans.
To learn how to avoid default, see What If I Can't Pay My Student Loans?
For more information about the consequences of default, see What Happens If I Default on My Student Loans?
If your loans are already in default, see How to Get Out of Student Loan Default.
Skipping payments or defaulting on a student loan can have serious and lasting effects on your credit. When a delinquency or default notation appears on your credit report you may have more trouble with basic financial tasks such as:
Most negative information is removed from your credit report after seven years, but student loan defaults may remain on your record much longer. Defaults for a federal student loan may be reported for seven years after the most recent of the following dates:
(See 20 U.S.C. §§ 1080a(f).)
If you default on a federal Perkins loan, the default can remain on your credit record until you pay the loan in full. (See 20 U.S.C. § 1087cc(c)(3).)
The consequences of default go well beyond damage to your credit report. To learn more, see What Happens If I Default on My Student Loans?
If your loans are already in default and you're looking for solutions, see How to Get Out of Student Loan Default.
If you find yourself in a dispute with the holder or servicer of your student loan, you should first take steps to resolve the problem directly. If that doesn't work, the following services are available to assist you.
If you're having difficulty with the lender or servicer of your federally guaranteed student loan, you can get help from the Department of Education. For guidelines, visit the Federal Student Aid Ombudsman website or call 877-557-2575.
If you're having trouble with private student loan company or a collection agency, you can turn to the Consumer Financial Protection Bureau (CFPB). The CFPB provides services to assist you in resolving complaints about your private student loans. For more information, visit the CFPB Student Loan Ombudsman website or all 855-411-2372.
For more details and additional resources, including additional tips for working out student loan problems without filing a formal complaint, see How to Get Help With Student Loan Problems.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A period of time schools use to measure a quantity of study. Contact your financial aid office for information on how your school defines Academic Year.
Demand for immediate repayment of your entire federal student loan. The entire unpaid amount of your federal student loan becomes due and payable if you:
To accumulate interest on a loan.
You can find your Adjusted Gross Income on your most recently filed federal tax return: IRS Form 1040, 1040A, or 1040EZ.
A limit on the total amount of subsidized and/or unsubsidized loans that you may borrow for undergraduate and graduate study. If the total loan amount you receive over the course of your education reaches the aggregate loan limit, you are not eligible to receive additional loans. However, if you repay some of your loans to bring your outstanding loan debt below the aggregate loan limit, you could then borrow again, up to the amount of your remaining eligibility under the aggregate loan limit.
The alien registration number or "A-number" is an identifying number that U.S. Citizenship and Immigration Services (USCIS) assign to certain non-citizens. A-numbers may consist of 8 or 9 digits. The A-number is yours for life, much like a social security number. The A-number may be found on your green card.
The maximum federal student loan eligibility per academic year. These amounts vary by type of loan and grade level. Your school will tell you how much you are eligible to receive each academic year. Specific amounts can be found at StudentAid.gov.
The actual yearly cost of borrowing money reflected as a percentage rate.
A letter from your school that details your federal, state, institutional and private student financial aid.
Includes reasonable amounts, as determined by your school.
The individual who signed and agreed to the terms in the promissory note and is responsible for repaying a loan.
Unpaid interest that has been added to the principal balance of a federal student loan. Future interest is charged on the increased principal balance and this may increase your monthly payment amount and the total amount you repay over the life of the federal student loan.
The process of combining one or more loans into a single new loan.
See credit bureaus.
The total cost to attend school for the academic year, as determined by your school.
A credit bureau collects the credit information of individuals and makes it available to financial institutions, credit card companies, etc. Credit bureaus are also known as consumer reporting agencies (CRAs).
A number reported by credit bureaus and used by lenders to determine whether to lend you money, and what interest rate to charge you.
A collection of information about you and your credit history, kept by the three major credit bureaus.
When a borrower contracts with a third party company to manage his or her unsecured debt.
The amount of debt compared to your overall income. Lenders use this ratio when determining whether to lend you money. A low debt-to-income ratio is more desirable.
Failure to repay a loan according to the terms agreed to. For the FFEL and Direct Loan programs, your loan is in default if you fail to make a payment for 270 days, if you repay monthly (or 330 days, if your payments are due less frequently). Your lender is required to report the default to at least one national credit bureau.
Allows you to temporarily stop making payments on your federal student loans. You are not charged interest on subsidized loans during deferment. Interest will continue to be charged on your unsubsidized loans and PLUS loans.
You become delinquent on a loan if you don't make a payment when due. Your lender is required to report the delinquency to at least one national credit bureau.
The cost of care during periods that include but are not limited to class time, study time, field work, internships, and commuting time for the student.
See William D. Ford Federal Direct Loan (Direct Loan) Program.
A portion of a federal student loan that the school pays out by applying the funds to the student's school account or by paying the borrower directly. Students generally receive their federal student loans in more than one disbursement.
Your adjusted gross income minus the poverty guidelines for your family size.
Eligible loans for the IBR plan are Direct Loan and FFEL Program loans other than: (1) a loan that is in default, (2) a Direct or Federal PLUS Loan made to a parent borrower, or (3) a Direct or Federal Consolidation Loan that repaid a Direct or Federal PLUS Loan made to a parent borrower. Federal Perkins Loans, HEAL loans or other health education loans, and private education loans are not eligible for the IBR plan. To access information on all of your federal student loans, check the National Student Loan Data System at www.nslds.ed.gov.
Eligible loans for the ICR plan are Direct Loan Program loans received by an eligible new borrower other than: (1) a loan that is in default, (2) a Direct PLUS Loan made to a parent borrower, or (3) a Direct PLUS Consolidation Loan (these are Direct Consolidation Loans made based on an application received prior to July 1, 2006 that repaid Direct or Federal PLUS Loans made to a parent borrower). FFEL Program Loans, Federal Perkins Loans, HEAL loans or other health education loans, and private education loans are not eligible for the ICR plan. A Direct Consolidation Loan made based on an application received on or after July 1, 2006, including loans that repaid a Direct or Federal PLUS Loan made to a parent borrower, is eligible for the ICR plan. To access information on all of your federal student loans, check the National Student Loan Data System at www.nslds.ed.gov.
Eligible loans for the Pay As You Earn plan are Direct Loan Program loans other than: (1) a loan that is in default, (2) a Direct PLUS Loan made to a parent borrower, or (3) a Direct Consolidation Loan that repaid a Direct or Federal PLUS Loan made to a parent borrower. FFEL Program Loans, Federal Perkins Loans, HEAL loans or other health education loans, and private education loans are not eligible for the Pay As You Earn plan. To access information on all of your federal student loans, check the National Student Loan Data System at www.nslds.ed.gov.
Someone who does not have an adverse credit history and agrees to repay the federal student loan if you do not.
Your Expected Family Contribution (EFC) is the number that's used to determine your eligibility for federal student aid. This number results from the financial information you provided in your FAFSA application. Your EFC is reported to you on your Student Aid Report (SAR).
Under this plan, your monthly payments are:
You must have had no outstanding balance on a Direct Loan and /or a FFEL Program loan as of October 7, 1998, or on the date you obtained a Direct Loan and/or a FFEL Program loan after October 7, 1998, and you must have more than $30,000 in outstanding Direct Loans or $30,000 in FFEL Program loans.
For example, if you have $35,000 in outstanding FFEL Loans and $10,000 in outstanding Direct Loans, you can choose the Extended Repayment Plan for your FFEL Loans, but not for your Direct Loans.
Free Application for Federal Student Aid. The FAFSA is a form that must be completed annually to help determine your eligibility for federal student aid. For more information, or to complete a FAFSA online for free, visit FAFSA on the Web.
Family size includes you, your spouse, and your children (including unborn children who will be born during the year for which you certify your family size), if the children will receive more than half their support from you. It includes other people only if they live with you now, they receive more than half their support from you now, and they will continue to receive this support from you for the year that you certify your family size. Support includes: money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs. For the purposes of these repayment plans, your family size may be different from the number of exemptions you claim on your federal income tax return.
A number used in combination with your Social Security Number, name, and date of birth to identify you as someone who has the right to access your own personal information on Federal Student Aid Web sites.
Federal Family Education Loan (FFEL) Program. Federal student loans borrowed through private lenders and guaranteed by the federal government. FFEL Loans include the following types of federal student loans: Subsidized Stafford Loans, Unsubsidized Stafford Loans, Federal PLUS Loans and Federal Consolidation Loans.
The FFEL Program ended July 1, 2010 and no new loans have been made since that date.
Document prepared by the court that has been signed and notarized, setting forth the terms and conditions of the divorce.
The types and amounts of financial aid (federal and nonfederal) a student is offered by the school to help pay educational costs.
The cost of attendance minus your expected family contribution.
Allows you to temporarily stop making payments or reduce your federal student loans' monthly payment. Interest will continue to be charged on your subsidized, unsubsidized and PLUS loans.
A period of time that generally begins on the day after a borrower graduates, leaves school, or drops below half-time enrollment and ends on the day before the repayment period begins. A borrower is not required to make payments during the grace period. Grace periods occur for:
A student who:
(1) Is not an undergraduate student;
(2) Is enrolled in a program or course above the bachelors degree level or is enrolled in a program leading to a professional degree; and
(3) Has completed the equivalent of at least three years of full-time study either before entering the program or as part of the program itself.
Under this plan, your monthly payments
Student grants are monetary gifts to people who are pursuing higher education. Unlike student loans, grants do not require repayment.
Your total income before deductions.
The minimum hours or credit hours you need to be enrolled to be eligible for a federal student loan. For information on half-time enrollment at your school contact your school's financial aid office.
An entity that holds your loan promissory note and has the right to collect from you. Many banks sell loans, so the initial lender and the current holder could be different. The holder(s) of your Direct Loans is the U.S. Department of Education (the Department). The holder of your FFEL Program loan(s) may be a lender, secondary market, guaranty agency, or the Department. Your loan holder(s) may use a servicer to handle billing, payment, repayment options, and other communications on your loans.
IBR is a repayment plan with monthly payments that are limited to 15 percent of your discretionary income. Discretionary income for this plan is the difference between your adjusted gross income and 150 percent of the poverty guideline amount for your state of residence and family size, divided by 12. To initially qualify for IBR and to continue making income-based payments under this plan, you must have a partial financial hardship (see definition).
ICR is a repayment plan with monthly payments that are the lesser of (1) what you would pay on a 12-year standard repayment plan multiplied by an income percentage factor or (2) 20 percent of your discretionary income divided by 12. Discretionary income for this plan is the difference between your adjusted gross income and the poverty guideline amount for your state of residence and family size.
The cost to borrow money. Interest is calculated as a percentage of the outstanding (unpaid) principal balance.
The percentage charged when you borrow money. See also Annual Percentage Rate (APR).
The IRS Data Retrieval tool is an easy and secure way to access and transfer tax return information directly onto the electronic IBR/Pay As You Earn/ICR Request, saving time and improving accuracy. If you do not use the IRS Data Retrieval Tool to provide tax information, you must provide your servicer(s) with a copy of your tax return or obtain an official tax transcript from the IRS.
The London Interbank Offered Rate (LIBOR) is the average interest rate paid on deposits of US dollars in the London market.
Money that you borrow and must repay with interest.
The forgiveness of a loan debt under certain circumstances.
A fee charged for each federal student loan you receive that is a percentage of the total loan amount you are borrowing (gross amount). The loan fee is deducted proportionately from each disbursement of your loan. This reduces the actual loan amount you receive (net amount). The specific loan fee that you are charged will be included in a disclosure statement you will receive after the first disbursement of your federal student loan. You will be required to repay the gross amount.
The cancellation of a loan debt under various loan forgiveness programs.
Temporary or permanent restructure of a mortgage loan.
The portion of the academic year that the loan is requested for.
An identifying number associated to a Direct PLUS Loan Request. Used by an endorser when completing a Direct PLUS Loan endorser addendum for a specific loan.
An entity that collects payments on a federal student loan, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a federal student loan on behalf of a loan holder. A federal loan servicer is a loan servicer for the U.S. Department of Education. If you have a Direct Loan, you will be assigned a federal loan servicer.
A legal document in which you promise to repay your federal student loan(s) and any accrued interest and fees to your lender or loan holder. There is one MPN for Direct Subsidized/Unsubsidized Loans and a different MPN for Direct PLUS Loans.
Most schools are authorized to make multiple federal student loans under one MPN for up to 10 years.
Borrower's Rights and Responsibilities Statement - The MPN contains a Borrower's Rights and Responsibilities Statement that explains the terms and conditions of the loan(s) you receive. It is very important to read and save this document because you'll need to refer to it later when you begin repaying your federal student loan(s).
The minimum amount of money a bank requires you to keep in your account to avoid fees.
You must list all taxable income you are receiving this year (i.e., income from employment, unemployment income, dividend income, interest income, tips, alimony). Do not report untaxed income such as Supplemental Security Income, child support, or federal or state public assistance.
If you would like to use your most recent AGI and it was not available through the IRS Data Retrieval Tool, enter your AGI next to Your Annual Taxable Income.
Note: If you filed a joint tax return, enter your joint AGI here and leave Your Spouse's Annual Taxable Income blank.
The central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan Program, and other federal student aid programs.
Any Title IV grant or loan you receive will be included in NSLDS. You can access NSLDS at www.NSLDS.ed.gov.
A new borrower has (1) no outstanding balance on a Direct Loan or FFEL program loan as of October 1, 2007 or has no outstanding balance on a Direct Loan or FFEL program loan when you obtain a new loan on or after October 1, 2007, and (2) received a disbursement of a Direct Subsidized Loan, Direct Unsubsidized Loan, or student Direct PLUS Loan on or after October 1, 2011, or received a Direct Consolidation Loan based on an application received on or after October 1, 2011. However, you are not considered a new borrower if the Direct Consolidation Loan you receive repays loans that would make you ineligible under part (1) of this definition.
Payment made within 15 days of the scheduled due date.
Money your parents give you to help pay for educational expenses. Not the Expected Family Contribution (EFC) from your FAFSA.
For IBR, you have a partial financial hardship when the annual amount due on all of your eligible loans or, if you are married and file a joint federal income tax return, the annual amount due on all of your eligible loans and your spouse's eligible loans, exceeds 15 percent of the difference between your adjusted gross income (AGI), as shown on your most recently filed federal income tax return, and 150 percent of the annual poverty guideline amount for your family size and state of residence: Annual amount of payments due > 15% [AGI - (150% x applicable poverty guideline amount)].
For Pay As You Earn, you have a partial financial hardship when the annual amount due on all of your eligible loans or, if you are married and file a joint federal income tax return, the annual amount due on all of your eligible loans and your spouse's eligible loans, exceeds 10 percent of the difference between your adjusted gross income (AGI), as shown on your most recently filed federal income tax return, and 150 percent of the annual poverty guideline amount for your family size and state of residence: Annual amount of payments due > 10% [AGI - (150% x applicable poverty guideline amount)].
The Pay As You Earn plan is a repayment plan with monthly payments that are limited to 10 percent of your discretionary income (the difference between your adjusted gross income and 150 percent of the poverty guideline amount for your state of residence and family size, divided by 12). To initially qualify for the Pay As You Earn plan and to continue to make income-based payments under this plan, you must have a partial financial hardship (and be a new borrower).
Amount withheld by an employer from employee's earnings. Some examples are: Federal Income Tax (withholding), Social Security, Medicare, State Taxes, Other Deductions (Health Insurance, Retirement Plan, etc.).
A loan made under the Federal Perkins Loan Program for students with exceptional financial need. Perkins Loans are administered by the school.
Direct PLUS Loans are loans for eligible graduate or professional students and eligible parents of dependent undergraduate students to help pay for the cost of the student's education at participating schools.*
Includes Direct PLUS Loans (made through the William D. Ford Federal Direct Loan Program) and Federal PLUS Loans (made through the Federal Family Education Loan Program.**)
Students' loan information doesn't include PLUS loans taken out by parents on their behalf.
* Graduate or professional students should exhaust unsubsidized and subsidized loans before taking out Direct PLUS Loans.
** The FFEL Program ended July 1, 2010 and no new loans have been made since that date.
Poverty guideline amount is the figure for your state and family size from the poverty guidelines published annually by the U.S. Department of Health and Human Services (HHS). The HHS poverty guidelines are used for purposes such as determining eligibility for certain federal benefit programs. If you are not a resident of a state identified in the poverty guidelines, your poverty guideline amount is the amount used for the 48 contiguous states.
A Section 529 plan. Prepaid tuition plans let you lock in future tuition rates at in-state public colleges at current prices and are usually guaranteed by the state.
The interest rate banks charge their most creditworthy commercial customers.
The loan amount you borrowed plus any capitalized interest.
A defaulted loan is rehabilitated if the borrower makes nine voluntary, reasonable, and affordable monthly payments within twenty days of the due date during ten consecutive months.
To pay back money you borrowed by making scheduled payments to a loan holder or servicer.
The maximum time period over which you must repay your federal student loan. The repayment period may range from 10 years to 30 years, depending on loan amount, loan type, and repayment plan.
A plan set up and agreed upon between a borrower and lender that determines the amount you pay each month and the number of payments you must make.
An allowance for the cost of housing and food while attending college or career school.
Agreement between the debtor and the account holder detailing the terms of repayment.
Under this plan, your monthly payments are
This repayment plan saves you money over time because your monthly payments may be slightly higher than payments made under other plans, but you'll pay off your federal student loan in the shortest time. For this reason, you will pay the least amount of interest over the life of your federal student loan.
A summary of the information you submit on your Free Application for Federal Student Aid (FAFSA) that provides you with your Expected Family Contribution (EFC).
Money you borrow for school and must repay with interest.
Student loan debt burden is the portion of a student's monthly income dedicated to their student loan payments. The Consumer Financial Protection Bureau (CFPB) has the following categories for student loan debt burden:
A federal student loan for which in some cases, a borrower is not responsible for paying the interest while in an in-school, grace*, or deferment period. Includes Direct Subsidized Loans (made through the William D. Ford Federal Direct Loan Program) and Subsidized Federal Stafford Loans (made through the Federal Family Education Loan (FFEL) Program**.)
* Interest will be charged during your grace period, if your loan is first disbursed July 1, 2012 through June 30, 2014.
** The FFEL Program ended July 1, 2010 and no new loans have been made since that date.
Reduces the taxes owed.
Tax - Tax Credit=Taxes Owed
$1000 - $250 = $750
Reduces taxable income.
Income - Deduction=Taxable Income
$45,000 - $5,000 = $40,000
All income you are receiving this year (i.e., income from employment, unemployment income, dividend income, interest income, tips, or alimony). Does not include untaxed income such as Supplemental Security Income, child support, or federal or state public assistance.
A form submitted to the Internal Revenue Service (IRS) and your state government on an annual basis reporting your income for the year.
An allowance an individual claims on a W-4 Form. A withholding allowance is mainly used to assist an employer in calculating the amount of income tax to withhold from an employee's paycheck.
The costs of teaching/instruction at an institution (e.g. the rental or purchase of equipment (including equipment for instruction by telecommunications), materials, or supplies required of all students in the same course of study).
A student who is enrolled in an undergraduate course of study at a college/university or career school that usually doesn't exceed four years and that leads to an undergraduate degree or certificate.
A federal student loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Includes Direct Unsubsidized Loans (made through the William D. Ford Federal Direct Loan Program) and Unsubsidized Federal Stafford Loans (made through the Federal Family Education Loan (FFEL) Program*.)
* The FFEL Program ended July 1, 2010 and no new loans have been made since that date.
Income you do not pay taxes on, such as Supplemental Security income, child support, or federal, or public assistance, or you are not required to file a federal income tax return based on the amount of your taxable income.
Payment made directly by the borrower and does not include payments obtained by federal offset, garnishment of income or asset execution.
Student loans provided by the U.S. Department of Education to enable a student to pay for education after high school. Eligible students borrow directly from the U.S. Department of Education at participating schools. Direct Loans include the following types of federal student loans: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans.
Amount withheld by an employer from employee's earnings. Some examples are: Federal Income Tax (withholding), Social Security, Medicare, State Taxes, Other Deductions (Health Insurance, Retirement Plan, etc.)
Glossary source: www.studentloans.gov
We built this website to get you the answers you need about getting out of student loan debt. When you choose your state or enter your zip code on our home page, you will quickly learn how to get organized so you can:
Our goal is to guide you to reliable information about managing your loans, providing resources tailored for State when available.
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Albin Renauer is an independent web and database developer and Webby Award judge. He first created LegalConsumer.com as an online companion to his book, How to File for Chapter 7 Bankruptcy, to help people file for bankruptcy.
After receiving his J.D. from the University of Michigan Law School in 1985, Albin worked for various public-interest law firms in the Bay Area and as a staff attorney for Chief Justice Rose Bird of the California Supreme Court. He spent 17 years as an editor at leading do-it-yourself legal publisher Nolo, where he helped create numerous books and software programs, including the bestselling Quicken WillMaker. He also edited Law on the Net, the first online directory of legal resources, and was the architect of Nolo's Webby Award winning website.
Shae Irving has been a legal editor and writer since 1994, when she joined the editorial staff at Nolo, specializing in estate planning, health care, and family law issues. For almost a decade, she was the managing editor of Nolo’s bestselling Quicken WillMaker software. Her books include Living Wills and Powers of Attorney for California, Prenuptial Agreements: How to Write a Fair and Lasting Contract, and Take Control of Your Student Loans (now out of print). Shae graduated from Berkeley Law and briefly practiced at a large San Francisco law firm before becoming an editor and author. She began working for Legal Consumer in 2013.
