The amount that a student borrows through student loans has increased drastically over the last few years. Tuition has increased, and parents have been impacted by the recession, which prevents them from contributing to their child’s college expenses. However, students have various options when considering ways of eliminating student loan debt.
Student loans can be either forgiven or discharged. The two terms are distinct and distinguishable. Student loan forgiveness occurs when the student takes part in a program that extinguishes the debt when the student has fulfilled a certain requirement. Loan forgiveness programs are often offered in relation to public service jobs. For instance, a teaching job in an inner city school that is experiencing a lack of qualified teachers.
Discharging of a student loan means that the student is no longer responsible for the repayment of the loan. In contrast to loan forgiveness, the discharging of a loan does not require that the student fulfills any particular requirement. A discharge may be applicable when the student becomes permanently disabled, the student dies, the school that disbursed the loan closes before the program is completed, and if the school has forged the students signature on a promissory note. Student loans are rarely discharged through bankruptcy proceedings, but courts have allowed it on occasion.
There are several tips for getting a student loan forgiven. First, contact the career center at your school to research loan forgiveness programs. Typically, the career center is aware of opportunities that apply to particular courses of study offered at the school. Second, research all student loan forgiveness programs online. Begin with a broad search which includes all industries then narrow the criteria. Initially, this will produce more results. Lastly, begin your research early. Typically, jobs that offer loan forgiveness include a lengthy application process. Locating a job early allows the student ample time to prepare the documentation required for the application as well as allowing time to prepare for interviews.
There are a couple of tips for getting a student loan discharged. First, if a student is considering filing bankruptcy, the student should seek the advice of a bankruptcy lawyer. A bankruptcy lawyer will provide a professional opinion based on the student’s specific situation, which will allow the student to make an educated decision as to their next step. Second, if the student believes that they have a legitimate dischargeable circumstance, the student must contact the loan servicer directly. Once this communication has commenced, the loan servicer will advise the student as to the application, and can assist with the discharge process.
Nearly all discharges are decided by the holder of the loan. Therefore, the decision is final and cannot be appealed to the U.S. Department of Education. However, if a loan has been falsified and the discharge is denied, that usually qualifies under an exception and can be submitted to the U.S. Department of Education for an appellate review.