By oldhamdei76735407, Oct 21 2016 03:59PM
We’re now well into the new school year. Many students at colleges and universities have taken out loans in hopes of getting a degree that will lead to their dream job. In part two of our three part series on student loans we will discuss the ways available to cancel your student loan completely. If you missed our first installment about the different types of loans you can click here to read it.
Once you’ve begun payments, if you are finding it hard to make them every month, there are options available to you so that you don’t default on your loan. It’s important to act before you default however, which is usually nine months after you start to have trouble repaying.
If you are in default, loan cancellation is the best way to get out of default; however, you don’t have to be in default to be eligible. With a loan cancellation, not only will you eliminate the loan, but you’ll also get back any money that you paid and any money that was taken from you via wage garnishment or other collection methods. Loan cancellation is only available under certain specific circumstances.
-Closed School Cancellation If your school closed while you were enrolled or ninety days of you leaving, you are eligible to cancel all or a portion of your loan. Recently ITT Tech and some Miami Jacobs locations have been closed.
-Unpaid Refund Cancellation If you left school and the institution failed to pay you a refund you were owed, you are eligible to cancel all or a portion of your loan.
--False Certification Cancellation This cancellation is defined by any of these types of fraud:
-While enrolled in university, there was a state law that would have prevented you from getting a job in the profession you were being trained for
- If you did not have a high school diploma when you went to the school, they were responsible to make sure you could benefit from the program by issuing an exam to determine your placement. For example, if there were issues with the admissions process of this exam, such as the answers being given to you.
-If your name was forged on loan papers by the school.
-If you can show that the loan was issued due to a case of identity theft.
Only loans issued after January 1, 1986 are eligible for these cancellations.
If you are permanently and totally disabled you can cancel your loan. You must show that this condition prevents you from working in any field and that it will likely result in death or at least last indefinitely. To pursue this you must have your doctor fill out a form agreeing that you are disabled and have them send it to the loan holder. If the loan holder accepts it then they will send it to the Department of Education for further review. If they accept it you will be put on a three-year conditional discharge. During these three years the government will keep a watch on you and your finances to make sure you are really disabled and not able to make any money.
The final way to cancel your student loans is death. If you die your loans will not be passed on to your estate. This is also the case for PLUS loans if both parents die. However, that is only the case for government loans. If your loans are private they will become part of your estate if you pass away.
Look for part three of our series where we tell you how to make sure you don’t default on your loans and give you some options should that happen. If you need help with your loans you can contact the Department of Education either online or you can call. You can submit your problems online at www.fsahelp.ed.gov or call 877-557-2575.