Can Student Loans be Forgiven if You Have Cancer?

Federal student loan borrowers undergoing cancer treatment can apply for loan forgiveness if they become totally and permanently disabled.

The U.S. Department of Education doesn’t have a specific loan forgiveness program for borrowers battling cancer or cancer survivors. Instead, cancer patients whose health prevents them from working may be eligible for a Total and Permanent Disability Discharge.

The TPD Discharge Program will write off your remaining loan balance tax-free if your disability is on file with the Social Security Administration or the Department of Veterans Affairs. But if neither agency has a record of your disability, then you must submit proof of it from your primary care physician or oncologist.

Bankruptcy is another option. Federal law allows you to get rid of your federal and private student loan debt if repaying it would cause you an undue hardship. But proving that type of hardship is no easy feat. To get a discharge, you’ll need to convince the bankruptcy judge that:

• You can’t pay for your healthcare and maintain a minimal standard of living while repaying the loans.

• Your circumstances likely won’t improve even after your cancer treatment ends.

• You made a good-faith effort to repay your student debt.

Few borrowers can prove all three. For example, it’s difficult to demonstrate that you can’t pay your federal student loans and maintain your standard of living when the Department of Education offers income-driven repayment plans that cap your monthly payments at a percentage of your income and family size.

Changes may be coming soon. Federal Student Aid head Richard Cordray told Congress that the Education Department is working on revising its bankruptcy policy so that more people could get relief.

Learn More: Can You File Bankruptcy on Student Loans?

Here are three other forgiveness and relief opportunities that can help you deal with your student loan debt while you work towards improving.

Public Service Loan Forgiveness

The PSLF Program writes off the balances of government and nonprofit employees after 10 years of full-time work. The program was broken for years, but for a limited time, the Education Department has temporarily relaxed the program’s rules to allow more people to benefit. If you have a Federal Perkins Loan or Federal Family Education Loan, you’ll need to consolidate it into a Direct Consolidation Loan before you apply for the Limited PLSF Waiver.

Income-Driven Repayment Plan Forgiveness

Borrowers who stay in an IDR plan for 20+ years can have their remaining loan balance forgiven — at least that’s the promise the Education Department made. Unfortunately, student loan servicers did a terrible job educating borrowers about this forgiveness opportunity. Instead, many of those companies steered borrowers into lengthy forbearances that tacked thousands of dollars of interest onto their balance.

Related: Student Loan Forbearance Steering

To fix this issue, the Biden administration announced it would use a one-time waiver to increase the number of qualifying payments borrowers have earned towards IDR forgiveness. Read more about the Limited IDR Forgiveness Waiver.

Cancer Treatment Deferment

You can temporarily pause federal student loan payments by applying for a Cancer Treatment Deferment Request. The deferment will last for the duration of your cancer treatment plus six months. During that time, payments will be suspended, but interest will continue to accrue on your unsubsidized FFEL, Direct Loans, and PLUS Loans.

There aren’t any programs designed to forgive or cancel student debt for people battling cancer. If you’re struggling to pay your federal loans, switch to an income-driven repayment plan or request a deferment. Private lenders don’t offer those same relief opportunities. Your best option may be to refinance for a lower interest rate and longer repayment term or try and tackle the debt in bankruptcy.

Let’s talk if you want help finding a way to deal with your student loans.

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