Loan Forgiveness and Cancellation

Reduce your balance without making a payment, if you qualify for loan forgiveness or cancellation.

Public Service Loan Forgiveness Programs

To encourage students to pursue certain careers, the federal government has created programs that forgiveForgiveness/loan forgivenessA program through which the federal government cancels all or part of a federal student loan debt. To qualify for loan forgiveness, borrowers must meet established criteria, including certain types of volunteer work; military service; teaching or medical practice in certain types of communities; or work in other occupations as specified by the forgiveness program. some or all of a borrower's federal student loan debt. Contact your servicer(s)/lender(s)LenderAn institution that provides loans, or borrowed funds, to other individuals or institutions for a fee. Under the Federal Family Education Loan Program (FFELP), the lender could be a bank, credit union or other private lending institution. In the Federal Direct Loan Program, the lender is the federal government. to find out if you qualify.

Certain careers in government, the military and education may qualify for loan forgiveness. This includes certain teaching jobs.

• You May Qualify for Loan Forgiveness By:

  Volunteering with AmeriCorps, Peace Corps or VISTA

  Volunteering with a qualifying entity can make a direct impact on your federal student loan balance. Here is the contact information for participating volunteer organizations.

  AmeriCorps | 800-942-2677
  Peace Corps | 800-424-8580
  Volunteers in Service to America (VISTA) | 800-942-2677

  This program is administered through AmeriCorpsAmeriCorpsA national organization that offers volunteer opportunities through a network of partnerships with local and national nonprofit groups. In addition to receiving education awards, borrowers who volunteer through AmeriCorps are eligible for forbearance and do not have to pay interest that accrues on their student loans during their service..

  Joining the Military

  Each branch of military service has its own federal student loan forgiveness program. Some positions may qualify for a higher amount of loan forgiveness. For details, contact an armed forces recruiter or visit them online.

  • U.S. Army: Paying for College
  • U.S. Army National Guard: Paying for College
  • U.S. Navy: Earn Money for College
  • U.S. Marine Corps
  • U.S. Air Force: Money for School

  Working for the Federal Government or Any State, Local or Tribal Government

  If you are a public servant and a Direct Loan ProgramDirect Loan ProgramThe William D. Ford Federal Direct Loan Program provides subsidized, unsubsidized, PLUS and consolidation loans. These loans are funded directly by the federal government. Schools work directly with the U.S. Department of Education to receive loan funds on behalf of borrowers. As of July 1, 2010, all new federal student loans are originated through this program. borrower, your federal student loan(s) may qualify for Income-Based Repayment (IBR)Income-Based Repayment planA loan repayment plan available in the Federal Family Education Loan (FFEL) or Direct Loan Program to federal student loan borrowers (excluding parent PLUS loans or any loans currently in default) who demonstrate "partial financial hardship." This hardship criteria is met when the borrowers loan payments exceed 15% of that portion of his or her adjusted gross income (AGI) that is more than 150% of the poverty line (based on family size). The monthly payment amount is recalculated annually to reflect changes in a borrowers income and family size but the maximum amount is 15% of discretionary income. Any remaining balance is forgiven after 25 years of payments, or after 10 years under the Public Service Forgiveness program. or Income-Contingent Repayment (ICR)Income-Contingent Repayment (ICR) planA loan repayment plan available in the Direct Loan Program. ICR is also available for PLUS loans and if a borrowers loans are defaulted or were previously in the FFEL Program. A borrowers ICR monthly payment is calculated as the household Adjusted Gross Income minus 100% of the poverty level for the borrowers family size times 20%, divided by 12. The monthly payment amount is recalculated annually to reflect changes in a borrowers income and family size as well as any change in the federal poverty level. plan for 10 years. After that time, any remaining student loan debt is forgiven.

  To see if you qualify for Public Service Loan Forgiveness, contact your servicer(s)/lender(s).

  Key features of Public Service Loan Forgiveness:

  • The repayment term is 10 years, with payments through IBR or ICR
  • You must be a full-time public servant
  • All loans must be Direct Loan Program loans
  • You can consolidateConsolidationThe process of combining one or more loans into one new loan with a single interest rate, all in one monthly payment. Consolidation allows borrowers to extend the loan term up to 30 years, depending on the loan balance and payment plan selected. The interest rate on a consolidated student loan is typically the weighted average of the interest rates for the individual loans. a non-Direct loan(s) into a Direct loan(s) to qualify
  • After 10 years, any remaining student loan debt(s) is forgiven
  • DefermentDefermentAn authorized postponement of student loan repayment in situations where borrowers meet certain requirements. While in deferment, borrowers do not make principal payments on their loans. There are several types of deferments, covering a variety of situations like unemployment, active military service and parental leaves from school. and forbearanceForbearanceA temporary postponement or reduction of payments over a set period of time. Unlike deferments, forbearances are granted at the discretion of the lender or loan servicer (except where the borrower qualifies for a mandatory forbearance), and borrowers are responsible for the interest that accrues on all loans—including subsidized loans—during forbearance. Forbearances may be used when the borrower does not qualify for a deferment. periods do not count toward the 10 years

  Working for a Nonprofit Organization

  If you are a Direct Loan Program borrower, working for some nonprofit 501(c)(3) organizations may qualify you for Public Service Loan Forgiveness. For more details on what qualifies for Public Service Loan Forgiveness, download the U.S. Department of Education's Public Service Loan Forgiveness fact sheet (PDF).

  Teaching in Underserved Communities

  If you are a full-time teacher, you may qualify for complete cancellation of your Perkins loanPerkins loanA federal loan that is awarded based on financial need and other factors. The interest rate is fixed and there are no fees. Because this is a federally subsidized loan, no interest accrues until repayment begins. The repayment period is 10 years and the loan is repaid directly to the school. and forgiveness of some or all of qualifying Stafford loansStafford loanA type of federal student loan available under the Federal Family Education Loan Program (FFEL) prior to July 1, 2010, to students enrolled at least half-time. The two types of Stafford loans are subsidized (based on financial need) and unsubsidized (borrower pays all interest), both offering a six-month grace period after graduation, withdrawal or dropping below half-time enrollment. (both FFELPFederal Family Education Loan Program (FFELP)A federal student loan program in which funds came from private lenders, such as banks and credit unions. Schools worked with both student loan guaranty agencies and lenders to approve and receive student loan funds. As of July 1, 2010, new federal student loans are no longer guaranteed or disbursed through this program. and Direct Loan Program borrowers). The requirement is that you teach at a school that serves low-income students. You can search for qualifying schools online .

  For details on loan forgiveness for teachers, visit the Federal Student Aid web pages on:

  Canceling a Perkins Loan
  Stafford Loan Forgiveness Program for Teachers

  The American Federation of Teachers maintains a state-by-state list of additional forgiveness programs for teachers. Visit the American Federation of Teachers website for details.

  To apply for teacher loan forgiveness, talk to your servicer(s)/lender(s) and submit the appropriate form below. If you don't know who your servicer(s)/lender(s) is, go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

  Teacher Loan Forgiveness Application (PDF)
  Teacher Loan Forgiveness Forbearance Request (PDF)

  Providing Child Care Services in Underserved Communities

  If you provide child care in an eligible facility that serves a low-income community, some or all of your undergraduate FFELP or Direct Loan Program Stafford loans may be forgiven.

  For more information, contact the Child Care Provider Loan Forgiveness Program support desk of the Federal Student Aid offices toll-free at 888-562-7002.

• Loan Cancellation

  Whom Should I Contact about Loan Cancellation?

  Please first read the eligibility requirements to see if you may meet the requirements, as the rules are detailed and specific. If you feel you qualify, contact your servicer(s)/lender(s) to discuss your eligibility. If ECMC holds your loan(s), contact us or find the loan cancellation option below that fits your circumstance, download and complete the appropriate form and send it to:

  ECMC
  P.O. Box 16408
  St. Paul, MN 55116-0408

  If you don't know who your servicer(s)/lender(s) is, go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

  False Certification: Cancellation Due to Fraudulent Activity

  False certification cancels any loan that was fraudulently originated by the school. False certification applies to loans disbursed after January 1, 1986, and is tightly defined to cover the following specific situations:

  Ability to Benefit
  Every school must certify students are eligible for federal student loans. For students without a high school diploma or GED, this means the school must demonstrate the student is academically able to benefit from the school's programs before the student can take out a loan(s). If a school falsely certified you for a program for which you did not qualify, you may be eligible for loan cancellation.

  Ability to benefit cancellation only applies to fraudulent certification. It does not apply to schools that misrepresent their education programs, the quality of their facilities and faculty, or their ability to help you find employment in your field of study.

  Loan Discharge Application: False Certification - High School Graduation Status (PDF)

  Unauthorized Signature
  In rare cases, someone at the school has signed a borrower's name on a financial aid application without authorization, received the borrower's loan funds and the borrower received no benefit from those funds. If you believe an official at your school forged your signature on a promissory note or loan application, you may be eligible for loan cancellation.

  Loan Discharge Application: False Certification - Unauthorized Signature/Payment (PDF)

  Disqualifying Status
  If your school certified your eligibility to study for a field in which you couldn't work, you may be entitled to loan cancellation. Barriers can include physical or mental conditions, legal status or other conditions that would legally bar employment in your field of study. An example of this may be a school knowingly admitting a felon into law school.

  Loan Discharge Application: False Certification - Disqualifying Status (PDF)

  Closed Schools: Cancellation Due to a School Closing within 120 Days of Your Being Enrolled

  If your school closed while you were enrolled and before you completed your program, you may be eligible for loan cancellation. The U.S. Department of Education has an online closed school search page where you can confirm your school closed. Closed school cancellation applies to loans disbursed after January 1, 1986, and covers these specific situations:

  • You did not complete the program through a teach-out at another school
  • You could not transfer academic credits or hours from the closed school to another school
  • The school closed while you were enrolled
  • The school closed within 120 days of an approved leave of absence or withdrawal

  You can find out more on the U.S. Department of Education's Closed School Information section of the website .

  Loan Discharge Application: School Closure (PDF)

  Unpaid Refund: Cancellation Due to a School Not Refunding an Unused Portion of Your Loan(s)

  If you attended school for less than 60 percent of the loan period, you may be due a refund. If your school should have refunded a portion of your loan(s) to your servicer(s)/lender(s) and didn't, the amount of the refund plus any accrued interestAccrued interestInterest on the loan that has accumulated since disbursement or the last payment made. related to the refund amount can be canceled.

  If your school is still open, contact your school to discuss the situation. If your school is no longer open, contact your servicer(s)/lender(s) to discuss your options.

  Loan Discharge Application: Unpaid Refund (PDF)

  Total and Permanent Disability (Including Veterans)

  If you become totally and permanently disabled, your student loan(s) may be canceled. To qualify, you must have a physician (doctor of medicine or osteopathy) certify that you are totally and permanently disabled.

  According to the U.S. Department of Education's website, totally and permanently disabled is defined as the condition of an individual who:

  1. Is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that:
     • Can be expected to result in death;
     • Has lasted for a continuous period of not less than 60 months; or
     • Can be expected to last for a continuous period of not less than 60 months; or
  2. Has been determined by the secretary of veterans affairs to be unemployable due to a service-connected disability.
  3. If you are receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, you can submit a Social Security Administration (SSA) notice of award for SSDI or SSI benefits stating that your next scheduled disability review will be within five to seven years from the date of your most recent SSA disability determination.

  "Substantial gainful activity" is defined for purposes of this discharge as a level of work performed for pay or profit that involves doing significant physical or mental activities, or both.

  Visit the U.S. Department of Education's website at www.disabilitydischarge.com for more information or to apply for loan cancellation due to total and permanent disability.

  Death

  Upon death, a borrower's remaining student loans are canceled and no future payments are necessary. The same applies for the death of a student on PLUS loansPLUS loanA PLUS Loan is a student loan offered to parents of dependent students enrolled at least half-time in eligible programs at participating and eligible postsecondary institutions or graduate and professional students at participating and eligible postsecondary institutions.. To validate the death of a student/borrower, an original death certificate, a certified copy, or a clear, accurate and complete photocopy are required.

  Spouses and Parents of September 11, 2001 Victims

  This loan cancellation is for survivors of the September 11, 2001, terrorist attacks.

  Loan Discharge Application: Spouses and Parents of September 11, 2001 Victims (PDF)