On average, American students spend around $37,574 on college and university diplomas. The price can be particularly steep for those without a scholarship. They have to punch in many hours after graduation. Sometimes several jobs are necessary to make ends meet and keep up with bills and loan payments.

The economic pressure drives them to cut back on everything. Graduates often rent apartments with several roommates. They buy cheap food and live on a strict budget. To take some of the pressure off, graduates can apply for debt relief or complete discharge. There are strict application rules for each program people can enroll in.

A Low Income

Students often can’t pay debts under the standard repayment plan. When this happens, they may apply for income-driven repayment forgiveness. Such people usually didn’t have enough funds to pay for “someone to write an essay for me” during their college years. The IDR plan calculates monthly payments based on discretionary income and family size.

With the right approach, one will pay much less than they do at the moment. Proof of income is required to apply for this program. This process also needs to have a balance after paying for the entire repayment term. Under these circumstances, you may be eligible for the following programs:

  • Pay As You Earn (PAYE)
  • Income-based repayment
  • Income-contingent repayment
  • Revised Pay As You Earn (REPAYE)

Depending on the approved plan, the student loan payments can be extended from 20 to 25 years. This leaves enough room for them to get back on their feet. Graduates with a balance at the end of their repayment period have the remaining amount forgiven. Note that the canceled loan sum can be taxed as income.

Work For A Government or Non-Profit Organization

It’s possible to get debt relief for full-time employees of nonprofit organizations. State, federal, and tribal government agency workers can also apply. They can do this via the Public Service Loan Forgiveness program. It works with federal loan holders. One can have their debt forgiven after making 120 monthly loan payments.

This plan is more tax-friendly as it doesn’t count the forgiven loan balance as income. Studentaid.gov has a helpful tool. It calculates one’s eligibility to be accepted into the program. The quiz takes about half an hour to complete. If a graduate meets the standards, they can fill out and submit the PSLF form.

Getting Defrauded By The School

Sometimes, an educational institution can fool people by making false claims and promises. This makes up engaging in misconduct or intentionally misleading people. In other words, students don’t get the education they were promised. These circumstances allow people to partake in the Borrower Defense To Repayment initiative.

The program offers total loan discharge if a student provides solid proof of

  • False accreditation claims.
  • Misleading claims about job prospects.
  • Violating state laws related to the loan or provided services.

Note that the initiative only covers federal student loans. The entity’s misconduct has to connect with the debt taken for its services. Graduates who believe they’ve been defrauded can submit applications for debt relief.

Be sure to have documents that confirm your claims. These include marketing materials, emails from its official representatives, and other proof. Submit the documents to increase the chance of qualifying for the Borrower Defense To Repayment initiative.

Studying At A School That Closed

There’s a small chance that the university or college closed at some point. Not long after you left, but while you were getting an education. This could have happened during the enrolment process or when you took a leave of absence. In the latter case, the institution must have closed within 120 days of absence. Under these circumstances, students may have their debts completely discharged.

To be eligible, one must have an unclosed Perkins loan or Federal Family Education Loan. In this case, they should apply for the program or contact their loan provider. Those who want to clear their debt must provide financial aid and academic records from the disbanded institution. These records are also required if they plan to enroll in another school again.

Get Falsely Certified For Getting A Loan

There are cases when colleges or universities wrongly confirm people as eligible for loans. Under these circumstances, one’s debts can be forgiven through a False Certification discharge. There are several situations when one can sign up for the program:

  • The school falsely certified a person who didn’t meet academic requirements. For example, they didn’t have a high school diploma, GED, or similar documents.
  • A student had a disqualifying status in the form of a physical or mental condition. They also may fail to meet legal standards, such as having a criminal record.
  • Lastly, a student loan can be discharged if a school signs the loan documents under the individual’s name. Basically, individuals become indebted without being aware of it.

Students must fill out the appropriate questionnaire based on their circumstances. Afterward, they should contact the loan service and apply for discharge. If successful, one has all payments refunded and the remaining balance discharged.

File For Bankruptcy

Sometimes, student loans can be forgiven during bankruptcy procedures. People in dire financial circumstances can file for Chapter 7 bankruptcy. Additionally, they apply for an action called adversary proceedings. To meet the demands, one must prove they can’t pay out loans without damaging themselves and their family.

This includes when a holder cannot support the minimal standard of living. If the situation doesn’t improve during the loan repayment period, one can also apply for debt relief. People can have their college debt removed when they try paying debts before filing for bankruptcy. Unfortunately, there’s very little chance that your student loan will be forgiven.

Final Thoughts

Higher education opens new opportunities for millions of American students. But it doesn’t mean they must pay for an education they didn’t get or sabotage their current economic situation. If you think that you’re eligible to apply for these programs, contact your loan provider today.