How to Get a Student Loan Reduced from the U.S. Department of Education

by Gail Sessoms ; Updated July 27, 2017
A young teacher is working with her students.

The U.S. Department of Education makes low-interest loans to students and their parents for college tuition and expenses. Student loan programs include the William D. Ford Federal Direct Loan, Perkins Federal Loan and Stafford Loans. The Department of Education offers flexible repayment plans, loan consolidation and loan forgiveness options for borrowers. The DOE may forgive, cancel or discharge all or part of a student loan for an eligible borrower.

Public Student Loan Forgiveness Program

The DOE offers loan forgiveness for the balance of a William D. Ford Federal Direct Loan to borrowers who work full-time in a qualifying public service job and meet the other requirements of the Public Student Loan Forgiveness Program. This requires completion of 120 payments through a loan repayment plan while employed in the qualifying job. The program considers only those loan payments made after Oct. 1, 2007. Borrowers of loans through the Federal Family Education Loan or the Federal Perkins Loan may qualify for the PSLF program by consolidating the loans and making the required 120 payments after a Direct Consolidation Loan is established

Teacher Loan Forgiveness

The DOE offers loan forgiveness to new borrowers who work full-time for five consecutive years as teachers in low-income secondary or elementary schools. The program does not accept time served as a teacher with AmeriCorps. The DOE determines which schools qualify for the program based on Title 1 funding. It offers loan forgiveness for subsidized and unsubsidized student loans made through the Direct Loan and Federal Stafford Loan programs. Loan Cancellation, also a type of loan forgiveness, is available to Federal Perkins Loan borrowers. The program forgives loans up to $5,000 for elementary and secondary teachers and up to $17,500 for highly qualified teachers in math, science and special education.

Discharge Because of the School

The DOE considers loan forgiveness if your school shut down before you completed your education or training program. You also can apply for loan forgiveness if your school fraudulently certified your eligibility, or if your eligibility is based on training in an occupation for which you are disqualified. Loan forgiveness is an option if your school signed your name without authorization to loan documents or checks, of if the school failed to give you a refund to which you were entitled.

Personal Crisis

The DOE considers loan forgiveness for borrowers who have a permanent and total disability and who meet additional requirements, which include a physician’s statement and a discharge period of three years. You can request a loan cancellation if you filed for bankruptcy and prove that making loan payments would cause “undue hardship.” The DOE also will approve a cancellation when it receives documentation of the student’s death.

More Information

Contact your loan servicer to ask about loan forgiveness, including PLUS loans made to parents. Your loan servicer also has information about restructuring your payment plan and, possibly, lowering your monthly payments. The DOE provides a list of loan servicers on the federal student aid website. Contact your school financial aid office if you have a Federal Perkins Loan. Find more information in your Borrower's Rights and Responsibilities Statement and review the full descriptions of the loan forgiveness programs.

About the Author

Gail Sessoms, a grant writer and nonprofit consultant, writes about nonprofit, small business and personal finance issues. She volunteers as a court-appointed child advocate, has a background in social services and writes about issues important to families. Sessoms holds a Bachelor of Arts degree in liberal studies.

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