Student Loan Forgiveness and Discharge Programs

Welcome to Finance State University’s lesson on student loan forgiveness and discharge programs. In this lesson, we’ll dive into the various options available to borrowers seeking relief from their student loan debt. Understanding these programs can significantly impact your financial future, so let’s explore the key concepts together.

Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) is a program designed to provide relief for individuals working in public service professions who carry a significant amount of student loan debt. Under this program, eligible borrowers who make 120 qualifying monthly payments while employed full-time by a qualifying public service organization may be eligible to have the remaining balance of their federal student loans forgiven. This program offers a valuable opportunity for individuals in fields such as education, government, non-profit organizations, and more to pursue their passion while easing the burden of their student loans.

Teacher Loan Forgiveness

Teacher Loan Forgiveness is a program that provides financial relief for eligible teachers who work in low-income schools or educational service agencies. Through this program, qualified teachers may be eligible to have a portion of their federal student loans forgiven, rewarding their commitment to teaching in high-need areas and helping to alleviate their student loan burden.

Income-Driven Repayment Plans

Income-driven repayment plans are designed to assist borrowers in managing their federal student loan payments based on their income and family size. These plans calculate monthly payments as a percentage of the borrower’s discretionary income. That can result in more affordable payments for individuals with lower income levels. They provide flexibility and can help borrowers avoid default by adjusting their repayment obligations to align with their financial circumstances. Common plans include Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE).

Closed School Discharge

If your school closes while you’re enrolled or shortly after you withdraw, you may be eligible for student loan discharge. We’ll explore the criteria and steps required to apply for a Closed School Discharge, providing you with essential information to navigate this process.

Total and Permanent Disability Discharge

In cases where you have a significant disability, you may qualify for a Total and Permanent Disability Discharge. We’ll explain the eligibility criteria and necessary documentation to obtain this discharge.

Bankruptcy Discharge

While it is challenging to discharge student loans through bankruptcy, we’ll explore the circumstances in which it may be possible. Understanding the requirements and potential implications will help you make informed decisions regarding bankruptcy and its impact on your student loan debt.


Navigating the world of student loan forgiveness can be complex, but it’s essential to explore all available options. By understanding the various programs, you can make informed decisions about managing and potentially reducing your student loan debt burden. Join us in the upcoming lessons as we delve deeper into each program. Take control of your financial future!