Six Ways You Can Still Cancel Your Federal Student Loan Debt

During that decade, you have to be working full time in a qualifying job, repaying a so-called direct federal loan, making those payments in an income-driven repayment plan and meeting the payment deadline. Thanks to Biden administration adjustments like the one that Ann wrote about, hundreds of thousands of teachers and social workers have become debt-free recently.

I summarized many changes to the program in a 2021 column. You can read profiles of several people who finally eliminated their balances in a 2022 column. In May, I wrote about a 28 year-old who helped her retired mother cancel her debt.

Closed or low-performing schools

For years, the Education Department has maintained a way to cancel student loan debt that allows for “borrower defense.” That allows people to petition the government if they believe their school misled them, engaged in misconduct or broke a state law relating to the loan or the services the school was supposed to provide.

When President Donald J. Trump was in office, the Education Department tried to tighten the rules and slow the process. Under President Biden, the Education Department made the rules more lenient. In 2022, many students who borrowed to attend for-profit schools or those run by chains like Westwood College, Corinthian Colleges, DeVry University and ITT Technical Institute (among others, including schools that shut down altogether) had their debt balances wiped out.

The Education Department has a good explainer on borrower defense on its website.

Bankruptcy Discharge

Yes, you can discharge your student loan debt by filing for personal bankruptcy. No, it is not easy.

To wipe your debt away in court, you need to meet a certain legal standard — proving that repayment will create an “undue hardship.” Often, that can involve arguing that there is a “certainty of hopelessness” that you’ll ever pay down your debt. Much will depend on the judicial circuit you find yourself in and even the judge who hears your case.

But a total discharge of the debt is not impossible. Last year, the Biden administration made some changes to make the process slightly easier, and Tara wrote about it in November.