Student Loan Discharges: Four Legal Ways Federal Loans Can End

Federal law provides several ways borrowers may legally eliminate student loan debt. These include bankruptcy discharge, disability discharge, borrower defense claims, and income-driven repayment forgiveness.

Student Loan Discharges: Four Legal Ways Federal Loans Can End

Federal law provides several ways borrowers may legally eliminate student loan debt. The four most important paths are bankruptcy discharge, disability discharge, borrower defense claims, and income-driven repayment forgiveness.

1. Bankruptcy Student Loan Discharge

Federal bankruptcy courts can discharge student loans when repayment would create undue hardship. This requires filing a lawsuit within the bankruptcy case asking the court to evaluate the borrower’s financial situation.

2. Total and Permanent Disability Discharge

Borrowers who cannot maintain consistent employment due to medical or psychological conditions may qualify for a Total and Permanent Disability discharge of their federal student loans.

3. Borrower Defense to Repayment

If a school misled students about job placement, licensing eligibility, or the value of the program, the Department of Education may discharge the federal loans connected to that program.

4. Income-Driven Repayment Forgiveness

Income-Driven Repayment plans tie payments to income levels. After the required repayment period, remaining federal loan balances may be forgiven.

Student Loan Strategy Session

If you want a full legal review of your student loan situation, you can schedule a strategy session below.

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