Get Rid of Student Loan Debt
How to Cancel, Lower, or Discharge Your Loan Amounts
So what do you do if you fall on hard times? Deferrment is possible, as is forbearance; both are ways to stop your required loan payment, but these are temporary measures. Student loans, unlike other forms of debt, are not dischargable during bankruptcy. This means that even if you filed bankruptcy, you are still responsible for the loan payments, no matter what your circumstances.
Thare are ways to get part or all of your student loans discharged, or taken off your record. These are legal methods, and many people do not know the various ways that the government legally allows you to get rid of student loan debt.
1. If you are declared 100% disabled or die, you or your heirs do not need to repay student loans. This is important--if you were to die suddenly, does your family know that they do NOT have to repay your loans? Make sure they know this. If you are in an accident or become ill with a long-term chronic illness that makes it impossible for you to work, you can apply to have your student loans discharged as well. You credit will not be harmed by a disability discharge.
2. If the school you attend closes before you can complete your program, you are not responsible for your student loans, and do not need to repay them. The loans are cancelled in full, and your credit report is not harmed by this.
3. You can join the Peace Corps, VISTA, or teach for five or ore years in a designated low-income school, and get up to $5,000 for teaching. The Peace Corps and VISTA give you 15% of your loans EACH YEAR you are part of their programs; while the pay is low for these programs, the 15% off your student loans goes directly to the loan agency, and you have peace of mind knowing that part of your loans are repaid.
4. A hardship hearing. If you declare bankruptcy, student loan debt is not discharged. However, you can request a special "hardship hearing" where you present your case to a special judge, explaining why repaying the loans would be an undue hardship. Only a very small percentage of people successfully discharge their loans; talk to a bankruptcy lawyer for more information on this option.
5. "False certification." If you can prove that a school misled you into thinking that you would benefit from their program, and the loans or debt you took out was a result of such promises, under certain guidelines your loans can be discharged.
One important note: the worst thing you can do is to default on your college debt, and go into delinquency. If you do not make payments for 240 days, your entire balance is due. If you go 270 days, your account is considered to be in default. This means you lose all future federal financial aid. The government can act legally against you, and you can lose your income tax refunds--the money is put toward your student loans owed. Default and delinquency are very serious, and can hurt your credit record for ten or more years.
To learn more about these options, go to: http://studentaid.ed.gov/students/publications/repaying_loans/2003_2004/english/loan-discharge-cancellation.htm
Published by Lea Barton
Published in newspapers, magazines, newsletters, on websites, and in academic reference guides since 1986, I have more than 2,000 articles, reviews, and columns as part of my portfolio. View profile
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@ZacheryL.Duffy did your space bar go out????
theyearwas1999whenIdecidedtoinroleinITTTechnicalInstitute.Iwasgoingnowhereinlife,jumpingfromjobtojob,struggling.SoIwentbacktoschoolwhichseamedlikeagoodideaatthetime,whenIspokewiththecounselorandtriedtogetthepellgranttohelppayforsomeoftheloans,becauseIdidnotqualify,theincomeIwasmakewastomuch.IthinkatthattimeIwasbringabout24,000ayearandthecounselortoldmethatIwillneedtwoloansaprivateloanandGovernmentloanfromSallieMai.Ialsohadtodoaextrasemsterwhichwasandadditional3,oooandwhenIfinishedtheschoolstatedthattherewheregoingtobeabout60,000JobsinthefieldIchoosetoworkin.Thiswasalie,Istruggledlookingforajobwiththehelpoftheschoolbutdidnotfindoneandontopofthattheschoolcloseddownthenextyear.ITTwasalsopassingstudentsthatdidnotunderstandorhadthegradetograduatethathadpassedwithaDorbetter.TheDeptatthispointis38,000IhadachancetogetridofoneofmyloansbypayingitoutunderthecashvalueoftheloannowIonlyhavetopaythehighinterestloanIgotwithSallieMai.IfIcouldgobackIwouldneverhavegottenaloanwiththisGovernmentInstitution
Ha Ha, I would kill for only 40 grand in debt. I owe $120,000 for the first four years out of college the bills were $1000 a month, they will be around $700 a month for the next 30 years. I'm down to $111,000 and have been unemployed for over a year now. Oh and if I don't pay them off, my parents will lose their retirement and their home all because I made the right choice in life, I should've dealt drugs.
It would seem through all of the research that there is no way to discharge a student loan, or find an attorney that will handle the case. I must do without come medical care and only use some medications less than prescribed due to the cost. There is no way out, although I have higher than average medical expenses (and can provide the back up) my wages are garnished and now they are looking at tax offset. Is it any wonder people have had enough? I'm at the end of my rope with still more medical bills to pay, medications to purchase and medical care to do without. Living in fear and pain in teh middle of nowhwere.
I have been paying $350.00 a month for 3 years on a useless education. I was in deferment for 9 months and now owe more than when I started. I have had our Attorney General do an inquiry into this and nothing changed. I owe until I die because I will never be able to pay Sallie Mae off when they just apply my payment to the interest.
Death is your first option? I'd hate to see the other ones....
I went to denver technical school from 1989 graduating in 1990 with an associate degree of science in electro mechanical drafting and design. soon after my sister died from cancer, she took her last breath in my arms. I begain drinking thinking that it would help me to deal with the lost of my sister. I that lead me on a road of complete destruction short of death. after many years of trying to pull myself together and not being able too. finally i am on the road of recovery. there has been much lost. I was dianosed with chronic depression and resently with an advance form of aritis. which is very painful and very debilitating, not to mention other physical limitations. and now i have this debt looming over my head. that i will never be able to pay. what can i do.
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