How to get student loans discharged or forgiven

Getting a loan forgiven requires a lot of dedication and time, and is still pretty unlikely to occur. One major change that occurred in 2005 when the U.S. Bankruptcy Code was overhauled was that in only the most narrow of circumstances will a debtor be permitted to get a student loan discharged.

Instructions

Difficulty: Moderate

1. Bankruptcy is not a realistic option to having your student loan forgiven. In 2005, major changes to the U.S. Bankruptcy Code governing the discharge of student loans were enacted by Congress and signed by President George W. Bush. These new laws make student loans non-dischargeable, unless you, as the debtor, can prove to the Bankruptcy Court that repaying the loan will prove to be a 'substantial hardship' on you as you embark on a fresh financial start post-bankruptcy.
2. Meet with an experienced bankruptcy attorney to discuss your options and determine if your situation could be construed as a 'substantial hardship.' Because the definition of that term is so narrow, chances are your situation will not fall into that category.
3. Teach full-time in a low-income community for five years. This program encourages teachers to enter and remain in the field of teaching.
4. Volunteer for AmeriCorps, Peace Corps or Volunteers in Service to America (VISTA). This program recognizes those who volunteer to make a difference in homelessness, developing countries, hunger, poverty, etc.
5. Serve as a lawyer in a non-profit position or a position of public interest. This program helps young lawyers to be more service-oriented.
6. Work as a physician or a registered nurse in a remote or low-income area for a set number of years. This program aims to get aid to areas that may lack much needed medical attention.

Tips & Warnings

• Try contacting your creditor yourself to see if you can work out reasonable terms of repayment that you can afford.
• Bankruptcy is not a valid option if your biggest debt is school loans, since it's unlikely your situation falls into the narrow defintion of 'substantial hardship.'
• Money already put toward the loan will not be refunded.

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