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Loan Cancellation

Cancellation of Student Loans

FFELP and Direct Loan discharge and cancellation benefits are available for specific circumstances.  The following chart describes conditions when these loans may be discharged or cancelled. You should contact your loan holder or servicer to determine eligibility for these benefits when you begin repayment. In addition, there are forgivable loan programs for those who choose certain career opportunities in high-need professions such as teaching or nursing.

Situation	Amount Forgiven	Notes
Total and permanent disability or death	100%	Total and permanent disability requires a physician to certify that you are unable to work and earn money because of a condition that is expected to continue indefinitely or result in death.
Full-time teacher for 5 consecutive years in a designated school serving low-income families. (Only available for Stafford Loans and the portion of a Consolidation Loan that repays Stafford Loans.) Click for more information on teacher forgivable loans.	Up to $5,000 of the aggregate loan amount that is outstanding after completion of the fifth year of teaching.1 &  2 Up to $17,500 of the aggregate loan amount that is outstanding after the fifth year of teaching as a highly qualified teacher in Special Education or secondary Science or Math.2	For loans received on or after 10/1/98 by a borrower with no outstanding FFELP or Direct Loan balance as of that date. 1 If your teaching service begins on or after October 30, 2004, you must also meet the definition of “highly qualified” teacher. 2 In Iowa, “highly qualified” means to hold an endorsement in the subject area that you teach.
Bankruptcy (in rare cases)	100%	Cancellation is rare and only if the bankruptcy court rules that repayment would cause undue hardship.
Closed school (before student could complete program of study) or false loan certification by a school, or identity theft.	100%	For loans received on or after January 1, 1986.
School does not make required return of loan funds to the lender.	Up to the amount that the school was required to return.	For loans received on or after January 1, 1986.