Is student loan discharge the same as forgiveness?

Asked by: Buster Littel Sr.  |  Last update: March 29, 2025
Score: 4.6/5 (63 votes)

That means you won't have to pay back some or all of your loan(s). The terms “forgiveness,” “cancellation,” and “discharge” mean essentially the same thing.

What is the difference between loan forgiveness and loan discharge?

Student loan forgiveness is usually based on the borrower working in a particular occupation for a period of time. Student loan discharge is usually based on the borrower's inability to repay the debt or the borrower not being responsible for the debt because of fraud.

What does it mean if my student loans have been discharged?

When you have your federal student loans discharged, it means: you no longer have further obligation to repay the loan, you will receive a reimbursement of payments made voluntarily or through forced collection, and.

Do you get a refund if your student loans are discharged?

Yes the money is refunded as long as it was paid on the loan that gets discharged.

Will my credit score go up if my student loans are discharged?

Your discharged loan will be reported to the credit bureaus and that will be the end of it. Your score should recalculate to reflect the closed account.

What Everyone's Getting Wrong About Student Loans

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How do I remove a discharged student loan from my credit report?

One way to get a student loan off a credit report is to write a dispute letter to credit bureaus. In the letter, you should explain why the student loan should be removed from your credit report. For example, if the loan was discharged in bankruptcy or if it was paid off but is still being reported as unpaid.

What will happen to my credit when my student loans are forgiven?

Credit mix: Those who qualify for loan forgiveness may see their scores drop by a few points if the student loan was their only installment loan, as their credit mix (i.e., the different types of credit accounts they have) accounts for 10% of their FICO Score.

How will I know if my student loan is forgiven?

Your student loan servicer(s) will notify you directly after your forgiveness is processed. Make sure to keep your contact information up to date on StudentAid.gov and with your servicer(s). If you haven't yet qualified for forgiveness, you'll be able to see your exact payment counts in the future.

Why did I get a student loan refund check in 2024?

Why did my college send me a check? A refund check is money that is directly deposited to you by your college. It is the excess money left over from your financial aid award after your tuition and additional fees have been paid. Your college may send you a check or the money may be deposited into your checking account.

Why does my student loan say paid in full?

You may notice your former servicer has cleared your loan account. For example, your loan balance may come up as “paid in full” on your former servicer's website or on your credit report. This does not mean you've received loan forgiveness. This is part of the loan transfer process.

What happens when you discharge a loan?

A mortgage discharge is when a mortgage securing your home loan is removed from the title of your property once you have repaid your home loan in full. You'll need to complete a mortgage discharge or release form to release the mortgage over the property you have provided as security to your home loan.

Can I get another student loan after discharge?

You can get a new Direct Loan or TEACH Grant after getting a TPD discharge. But to do so, you must do the following: Give your school a letter from a doctor of medicine or doctor of osteopathy/osteopathic medicine stating that you are once again able to engage in substantial gainful activity.

Is student loan discharge taxable?

The government will discharge the remainder if the borrower still has a balance at the end of their loan term. However, the forgiven loans are taxable as income at the federal and state levels.

What happens after student loans are discharged?

If you qualify for discharge of the full amount of your loan(s), you're no longer obligated to make loan payments. If you qualify for discharge of only a portion of your loan(s), you're still responsible for repaying the remaining balance.

Who qualifies for loan discharge?

Your loan can be discharged only under specific circumstances, such as a school's closure, false certification of your eligibility to receive a loan, or failure to pay a required loan refund; certain types of misconduct committed by the school; or because of total and permanent disability, bankruptcy, identity theft, ...

Will I get a refund if my student loans are forgiven?

If you qualify for student loan forgiveness or discharge in full, and have applied if necessary, you will get a notification that you no longer need to make payments. In some cases, you may even get a refund, depending on the program you applied under.

Why am I getting a refund from student loans?

If you are being handed money from your school, you need to know where it is coming from, because in almost all cases, a refund on a student account is because of an over payment on a loan.

What happens if I pay off my student loans and then they are forgiven?

If your federal student loans are forgiven, you could get a refund, and you might see your credit score dip.

Are student loans forgiven at age 70?

Are student loans forgiven when you retire? No, the federal government doesn't forgive student loans at age 50, 65, or when borrowers retire and start drawing Social Security benefits. So, for example, you'll still owe Parent PLUS Loans, FFEL Loans, and Direct Loans after you retire.

Why is my student loan showing a zero balance?

If your student loan balance is suddenly showing zero, some of the many reasons could be: Your federal student aid or private student loans were forgiven. You've completed one of the student loan forgiveness programs. You qualify for Public Service Loan Forgiveness (PSLF), or.

How do I make sure my student loans are forgiven?

Income-Driven Repayment (IDR) Forgiveness

If you repay your loans under an IDR plan, any remaining balance on your student loans will be forgiven after you make a certain number of payments over 20 or 25 years—or as few as 10 years under our newest IDR plan, the Saving on a Valuable Education (SAVE) Plan.

How can I tell if my student loans were forgiven?

If you've been making payments toward PSLF, you can view your progress in your My Aid page by following these steps:
  1. Log in to your StudentAid.gov account.
  2. From your Dashboard, navigate to “My Aid.”
  3. Select “View Details” to open your My Aid page, then scroll down to PSLF/TEPSLF Payment Progress.

Why did my student loans get removed from my credit report?

What happened? Student loans disappear from credit reports 7.5 years from the date they are paid in full, charged-off, or entered default. However, education debt can reappear if you dig out of default with consolidation or loan rehabilitation. Student loans can have an outsized impact on your credit score.

Will I get the remaining balance from student loan forgiveness?

If you repay your loans under an IDR plan, any remaining balance on your student loans will be forgiven after you make a certain number of payments over 20 or 25 years.