How to Get Rid of Student Loans

The old saying "Nothing is certain but death and taxes" needs to be updated to add a third certainty--student loans. Carrying student loan debt can be a huge burden, especially in a down economy, with unemployment on the rise. Trying to get rid of student loans is nearly impossible, as student loans aren't dischargeable even in standard bankruptcies. There are some ways to get rid of student loans, though, or to lower the amount you pay.

• Disability. If you are disabled and 100% unable to work or be retrained to work in any capacity, you can contact your student loan servicer and ask about a "disability discharge." If you receive SSI, SSDI, or VVA benefits, you can typically qualify for disability discharge. Be persistent if the servicer claims you cannot get rid of student loans. Most 100% disabled persons can successfully get rid of student loans. 
  
• Bankruptcy discharge. It is very rare to be able to get rid of student loans in a standard bankruptcy. All federal and non-profit student loans are protected from discharge, but some bankruptcy filers have been successful in getting rid of private student loans. Contact a bankruptcy lawyer to discuss whether your student loans qualify for a discharge attempt.
• Forgiveness through teaching. Teachers can get a portion of their student loans forgiven for teaching in Title 1, high-need areas and certain high-need fields, such as math and foreign languages. Programs such as Teach for America help borrowers to get rid of student loans, in full or in part. 
  
• Forgiveness through other jobs. Working for AmeriCorps, VISTA, or joining the PeaceCorps can reduce your student loans by 30% or more, after two years of service. 
  
• Forgiveness through the military. If you joint the Army National Guard you can receive up to $10,000 toward student loans. 
  
• Work for some agencies in the federal government. The Federal Student Loan Repayment Program allows for people who fill certain jobs to receive $10,000 per year toward student loans, up to a maximum of $60,000.
• Forgiveness after 25 years. A new law enacted on July 1, 2009 forgives student loans after the borrower has paid for 25 years; check out the Income Based Repayment program.

Each borrower needs to assess his or her life to determine which of the above strategies works to get rid of student loans. All borrowers struggling to repay student loans should contact student loan servicers to negotiate forbearance or deferment, or to consolidate loans at a lower interest rate when possible. Working to get rid of student loan debt isn't easy, but it is worthwhile.

published 2 years ago

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