Investigate cancellation, forgiveness, and discharge

Under certain circumstances, your Consolidation Loan, or a portion of that loan, may be cancelled, forgiven, or discharged. In other words, you won't have to repay it.

Below is a summary of some of the cancellation provisions that loan holders, guarantors, and the U.S. Department of Education administer. Contact your loan holder for more information:

Death: If you die, your loan obligation will be cancelled.
Total and permanent disability: Your loan may be cancelled if you become totally and permanently disabled.
Teacher forgiveness: A loan forgiveness program for teachers serving in designated low-income schools exists for new Stafford loan borrowers after October 1, 1998.
Miscellaneous: A portion of your Consolidation Loan may be cancelled in other instances including school closure, false certification, identify theft, failure of the school to pay a refund, or employment in a public service job (for Direct Consolidation loans only).

Bankruptcy information

Generally, federal student loans cannot be cancelled or discharged due to bankruptcy. If you are considering bankruptcy as an option to deal with financial problems, you probably still will have to repay your Consolidation Loan.