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Student Loan Forgiveness, Discharge or the Other
According to a recent loan survey by the Consumer Financial Protection Bureau new student loan volume has gone up from a minute $15 billion in 1992 to around a hundred billion in the last quarter of 2014. Students seem reluctant in making effective choices in managing their loans. There are options available to them such as Loan Forgiveness, Loan Discharge and Deferments for which they need to be aware of and this infographic would illustrate these options in a very simple and understandable way.

There are certain circumstances in which your loans could be forgiven when the forgiving party determines that the borrower has given back to the community in a way specified by them such as teaching or public service. Thus, there could be a cancellation of the loan’s remaining balance or a portion of a balance once you comply with the conditions specified by the issuer.

Loan discharge is the release of a borrower from the obligation to repay the loan. Loan discharge usually occurs if there is no way the borrower can pay a loan e.g. a total and permanent disability or death or if a borrower can no longer apply the education for which the loan was granted (e.g., the school the borrower was attending closed before they could finish their program).

There are certain misconceptions and students tend to mix the above phenomenon but there is quite a lot of difference between the two. The difference between loan forgiveness and discharge is the circumstances that can cancel the debt. Special repayment programs can act as a form of forgiveness as well. Federal and governments, as well as organizations, offer these programs to promote service in needed fields or high-need areas.

One thing that needs to be kept in mind is the fact that student loans are exempted from forgiveness in bankruptcy. That is, unless you can prove that they provide you “undue hardship.” But instead of opting for bankruptcy there are other options available to you if you’re experiencing economic hardship, illness, unemployment or any other circumstance that’s making it hard to repay your loan and will save students from insolvency. These options are Economic Hardship Deferment, Forbearance, Unemployment Deferment and other deferments.


  • Consider filling out an Economic Hardship Deferment request form if you’re experiencing extreme economic difficulties.
  • One could also opt for Forbearance which the period during which the loan payments are suspended or reduced for a specific time because you are experiencing financial difficulty.
  • If a person can prove their eligibility to receive unemployment benefits or they have diligently searched for full-time employment, they can qualify for an unemployment deferment.
  • There are other deferments related to rehabilitation training, temporary or total disability, parental leave, military service and more are available.

Student Loan Forgiveness, Discharge or the OtherInfographic by: studentdebtrelief

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Student Loan Forgiveness, Discharge or the Other #infographic

Student Loan Forgiveness, Discharge or the Other
According to a recent loan survey by the Consumer Financial Protection Bureau new student loan volume has gone up from a minute $15 billion in 1992 to around a hundred billion in the last quarter of 2014. Students seem reluctant in making effective choices in managing their loans. There are options available to them such as Loan Forgiveness, Loan Discharge and Deferments for which they need to be aware of and this infographic would illustrate these options in a very simple and understandable way.

There are certain circumstances in which your loans could be forgiven when the forgiving party determines that the borrower has given back to the community in a way specified by them such as teaching or public service. Thus, there could be a cancellation of the loan’s remaining balance or a portion of a balance once you comply with the conditions specified by the issuer.

Loan discharge is the release of a borrower from the obligation to repay the loan. Loan discharge usually occurs if there is no way the borrower can pay a loan e.g. a total and permanent disability or death or if a borrower can no longer apply the education for which the loan was granted (e.g., the school the borrower was attending closed before they could finish their program).

There are certain misconceptions and students tend to mix the above phenomenon but there is quite a lot of difference between the two. The difference between loan forgiveness and discharge is the circumstances that can cancel the debt. Special repayment programs can act as a form of forgiveness as well. Federal and governments, as well as organizations, offer these programs to promote service in needed fields or high-need areas.

One thing that needs to be kept in mind is the fact that student loans are exempted from forgiveness in bankruptcy. That is, unless you can prove that they provide you “undue hardship.” But instead of opting for bankruptcy there are other options available to you if you’re experiencing economic hardship, illness, unemployment or any other circumstance that’s making it hard to repay your loan and will save students from insolvency. These options are Economic Hardship Deferment, Forbearance, Unemployment Deferment and other deferments.


  • Consider filling out an Economic Hardship Deferment request form if you’re experiencing extreme economic difficulties.
  • One could also opt for Forbearance which the period during which the loan payments are suspended or reduced for a specific time because you are experiencing financial difficulty.
  • If a person can prove their eligibility to receive unemployment benefits or they have diligently searched for full-time employment, they can qualify for an unemployment deferment.
  • There are other deferments related to rehabilitation training, temporary or total disability, parental leave, military service and more are available.

Student Loan Forgiveness, Discharge or the OtherInfographic by: studentdebtrelief

Share This Infographic On Your Site

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