Eligibility for Federal Student Loans Cancellation
If you borrowed federal student loans, one of the benefits you can enjoy is what is being regarded as federal student loans cancellation. But before I go into this, you must understand that you have the responsibility to repay your federal student loans. The fact that you are unable to get job after graduation does not preclude you from paying back your federal student loans. Some people think that they don’t have any responsibility to pay back their student loans if they don’t complete or are not happy with the educational program on which the student loans were approved and released to them. That is just a myth. Even if you are a minor when you received the student loan, you will still need to pay back the loan because you must have signed the promissory note.
Promissory note is a binding legal document that you must sign before your student loan can be released to you. It clearly spells out your rights and responsibilities and the terms and conditions of the loan. Part of your responsibilities is the repayment of the loan. Signing the promissory note means that you totally agree to the terms and conditions of the loan. That is why it is very important that you don’t just sign the promissory note blindly. You should endeavour to read and understand it before you append your signature on the document. Once you have signed the document, it becomes binding on you.
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Nevertheless, your federal student loans can still be cancelled under certain situations and these are discussed below:
- Death of the student borrower: If the beneficiary of the federal student loans dies, the loan will be cancelled. Also, if it is a Parent’s PLUS Loan, the loan will be discharged as a result of the death of the student or the parent. In either case, the death certificate of the deceased will have to be submitted before such federal student loans can be cancelled.
- Student Loans as a result of identity theft: If you can prove that the federal student loans was as a result of false certification or unauthorized payments due to identity debts, you can apply for federal student loans cancellation. In a situation where your school falsified your eligibility for the loan, applied for the loan and signed your name on the promissory note without your authorization, you will not be responsible to pay such student loans.
- Permanent Disability: If for any reason you suffer physical or mental permanent disability which makes you unable to work again, you will enjoy federal student loans cancellation. Before your federal student loans can be cancelled, you will need to submit necessary documentation as a proof of the disability. After you have been granted the federal student loans cancellation, government may still do a follow up for the next three years to be sure that the case is actually permanent disability. If the government finds out that it is not a permanent disability, the federal student loans cancellation will be reversed.
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- Closure of school: You will qualify for federal student loans cancellation if your school closed down while you were still a student there thereby making you unable to complete your program or within 120 days after you withdrew from the school.
- Outstanding refund: It is possible that you withdrew from your school after you collected your loan. In this case, you may be entitled for certain refund from your school. If your school or lender owed you a refund after you withdrew and never paid you, you can apply for federal student loans cancellation.
For any of the reasons mentioned above, you will need to contact your federal student loans servicer to apply for the federal student loans cancellation.