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Roadmap to Navigating Your Student Loans


1.         What kinds of student loans do you have?  Student loans are either Federal/Government student loans or Private student loans.  Your options are going to be different depending on the kind of loan you are working with.


·         Federal/Government loans include Direct Loans, Stafford Loans, PLUS (parent) Loans and Perkins Loans are tracked on the National Student Loan Data System (NSLDS) at  You can access the system using a personal PIN.  You can also contact the Federal Student Aid Information Center at 1-800-4-FED-AID. 


·         Private student loans are not tracked in a central location.  If you do not have records, you may be able to track down your student loans through your credit reports.


2.         Are you eligible for a cancellation or discharge of your student loans?  Federal/Government student loans may be eligible for a discharge in special circumstances (although these discharges are generally not available for private student loans).  Sometimes this is referred to as “forgiving” your student loans.  If you qualify, these discharges will eliminate some or all of your Federal/Government student loans.  Please note that the discharge of your student loans may result in tax consequences and you should seek the assistance of a qualified tax professional.


The forms and additional information are available at  The types of discharges include:


·         Closed School DischargeIf you were unable to complete the program due to a school’s closure, you may be eligible for a discharge of the loans related to that school.

·         False Certification: Ability to Benefit Discharge:  If you did not have a high school diploma or GED, the school should have made sure you had the ability to learn from the coursework, usually by taking an evaluation test.  If the school did not properly assess your ability to benefit from the program, you may be eligible for a discharge.

·         False Certification: Disqualifying Status Discharge:  If, at the time you enrolled in the school, you would have been unable to work in your field of study because you were ineligible under state requirements for that field of work, you may be able to apply for this discharge.

·         False Certification: Forgery Discharge:  You may be eligible for this discharge if the school forged your signature on your student loan check and you did not receive any of the student loan money.

·         False Certification: Identity Theft Discharge:  If you are the victim of identity theft, and can prove that with certain court documents, you can apply for this discharge.

·         Unpaid Refund Discharge:  If you left school before the term finished, generally if you attended less than 60% of the term, you may not have to repay the full loan amount if you should have received a refund from the school but did not.

·         Total and Permanent Disability Discharge:  You must be able to prove that you are unable to work and earn money because of a disability that is expected to result in death or lasts at least five years.  This is generally more restrictive than the standard for Social Security or SSI Disability.  This can be proved by certain documentation from the Department of Veteran’s Affairs, the Social Security Administration, or a certification on the appropriate form from your doctor.

·         Death Discharge:  Your family is not responsible for paying your student loans after you die.  Your family should send a certified copy of the death certificate to the student loan company.

·         Job Related Discharges:  There are also discharges for certain occupations, such as “public service employment,” that may be available to you depending on what kind of work you do and where you are employed.  Often these programs do require that you make payments based upon your income for a certain number of years before the student loan debt is forgiven.


3.         Is bankruptcy an option for you?  Student loans are generally not dischargeable in bankruptcy.  However, rarely, you may be able to discharge your student loans if you are unable to maintain a basic standard of living for reasons beyond your control, there is little expectation your situation will improve, and you have made reasonable attempts to work with your lenders.


4.         Can you temporarily postpone your payments?  If you cannot discharge your student loans but are unable to make payments, you should ask your lender if you are eligible for a deferment or a forbearance until your financial situation improves.


5.         Can you set up an affordable monthly payment?  Many lenders will work with you to set up a more affordable payment if you communicate with them.  You can also consolidate your student loans into one loan, although it is generally not recommended to consolidate your Federal/Government student loans into private loans because you will lose many valuable repayment options.  Federal/government student loan lenders have options available such as the income based repayment plan which looks at your income to determine an affordable payment amount (and may result in any remaining balance being forgiven if you comply with the payment plan; however, please note that the discharge of your student loans may result in tax consequences and you should seek the assistance of a qualified tax professional).


In order to take advantage of some payment plans you have to be current on your payments; if you are not current you may need go through a plan to rehabilitate your current loan or consolidate your student loans into a new loan in order to then move forward with an affordable payment plan.  For more information, see


6.         What if they are trying to collect money from you, such as by garnishing your wages or taking you to court?  Federal/government student loans can take money from you—such as garnishing your wages, Social Security payments, or federal income tax returns—without a court order.  However, you can request a hearing and ask that the collection be reduced or stopped.  Private student loans must sue you before they can take anything from you, such as garnishing your wages.  Be sure to promptly respond to all court notices and talk to an attorney regarding whether you have any defenses to a lawsuit.


Remember:  Free assistance may be available or you can apply for these options on your own.  Beware of businesses who offer to assist you with the student loans but want you to pay substantial fees in advance.