Loan Forgiveness, Cancellation and Discharge
Under certain conditions, you may have all or part of your education loans forgiven or cancelled in exchange for performing a qualifying service for a defined period of time. Although you do not have to repay the part of your loan that is forgiven or cancelled, you may owe taxes on the forgiven/cancelled amount in cases where the forgiven/cancelled amount is considered income.
|New York State Loan Forgiveness Programs for NYS Residents Only|
Awards are offered to retain experienced attorneys employed as District Attorneys, Assistant District Attorneys or Indigent Legal Services Attorneys throughout New York State
Awards are made annually to social workers licensed to practice in New York State who have at least one year of prior employment working in a critical human service area.
This program seeks to increase the number of nursing faculty members and adjunct clinical faculty teaching in the field of nursing in New York State.
The New York State Young Farmers Loan Forgiveness Incentive Program is offered to encourage recent college graduates to pursue careers in farming in New York State. This program provides loan forgiveness awards to individuals who obtain an undergraduate degree from an approved New York State college or university and agree to operate a farm in New York State, on a full- time basis, for five years.
The Get on Your Feet Loan Forgiveness Program allows students who graduate from a college or university located in NYS in 2014-15 or thereafter, continue to live in NYS upon college graduation, earn less than $50,000 per year, participate in either the federal Pay As You Earn (PAYE) or eligible Income Based Repayment (IBR) program, and apply within two years of graduating from college to be eligible to have their federal income-based repayment plan commitment covered for two years.
|Federal Loan Forgiveness Programs|
The Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue in the teaching profession. If you teach fulltime for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families, and meet other qualifications, you may be eligible for forgiveness of up to a combined total of $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans.
The Public Service Loan Forgiveness Program is intended to encourage individuals to enter and continue to work full time in public service jobs. Borrowers may qualify for forgiveness of the remaining balance of their Direct Loans after they have made 120 qualifying payments on those loans while employed full time by certain public service employers.
For borrowers with Perkins Loans who perform certain types of public service or are employed in certain occupations. A percentage of the loan may be cancelled for each year of service. To apply, contact the school that you were attending when you received the loan. Occupations include:
Federal Loan Repayment
Listed below are federal programs that will assist you in repaying your federal student loan debt in return for your service commitment.
|Programs to Assist With Federal Loan Repayment|
In order to recruit or retain certain federal government employees, federal agencies may pay federal student loan holders up to $10,000 a year to be applied toward loan repayment, not to exceed $60,000 for any one employee.
Primary care medical, dental and behavioral and mental health clinicians who provide care to the underserved may receive an initial award of up to $30,000 or $50,000 depending on service in a health profession shortage area.
Depending on branch of the service, borrowers may have up to $65,000 of your eligible student loans repaid.
Students from disadvantaged backgrounds who agree to serve on the faculty of an accredited health professions college or university for two years may receive up to $40,000 towards the repayment of their student loans.
Due to budget reductions, there is no money allocated to pay any new awards for this program in 2014.
Federal Loan Cancellation and Discharge
Under certain, specific circumstances, your federal student loans may be cancelled or discharged.
- Direct Loan borrowers should contact their loan servicers for details;
- FFEL loan borrowers should contact HESC at 518-473-3986;
- Perkins Loan borrowers must contact the school from which their loan originated.
You may qualify if you are totally and permanently disabled, (unable to work and earn money because of an impairment that is expected to continue indefinitely or result in death) borrowers can request a disability discharge application. Return the completed application to the U.S. Department of Education’s Total and Permanent Disability Servicer, Nelnet.
If you, the borrower, die, then your federal loans will be discharged. If you are a Parent PLUS loan borrower, your loan may be discharged if you die, or if the student on whose behalf you obtained the loan dies. Contact the loan servicer for assistance.
Discharge in Bankruptcy (in very limited exceptions)
Generally, student loans are nondischargeable under the Bankruptcy Code. If you file for a Chapter 7 or 13 bankruptcy, you must bring an action known as an Adversary Proceeding in the Bankruptcy Court, and prove to the court that repaying the loan will create an undue hardship on you and your dependents. We strongly suggest you consult with your attorney on the effect of filing a bankruptcy petition on your student loan debt.
You may qualify if you could not complete your educational program because your school closed while you were enrolled, or closed within 90 days after you withdrew.
You may qualify if the school you attended falsely certified your ability to benefit from the education. A school is required to certify that students who lack a high school diploma or a high school equivalency diploma obtained from Test Assessing Secondary Completion (TASC), formally known as GED, have the ability to benefit from the education provided by the school. The school may have failed to test or conducted testing in an improper manner.
You may qualify if, at the time the school certified your loan, you had a physical or mental condition, legal status condition or criminal record that would legally prevent employment in your field of study.
You may qualify if you believe that a representative of your school signed your name without permission on the loan application, promissory note, loan check(s), or authorized your loan to be disbursed by electronic funds transfer, or master check without your permission.
You may qualify for a partial unpaid refund loan discharge if you believe your school failed to pay a tuition refund required under federal law if you withdrew during the refund period published by the school, regardless of whether the school is open or closed.
You may qualify if you believe a loan was falsely certified in your name as a result of identity theft or forgery. You will need to complete a notarized Affidavit of Identity Theft/Forgery and submit it to HESC along with a copy of a police report and a copy of the court judgement or verdict stating you were a victim of identify theft.