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The US made it very hard to get rid of student loans even in bankruptcy

Student-Loans-7Student loans are among the best types of unsecured loans. Offered to students so as to finance their studies, they have competitively low interest rates. After the borrower clears their studies, borrowers get to enjoy a grace period before the loan matures and payments so as to clear it as expected.

So, filing for bankruptcy should make you to not be legally liable for this loan, right? Unlike other types of loans which may be discharged by bankruptcy, student loans may not be..

The following are the conditions under which a borrower may have their student loans deferred or cancelled:


In the event that the borrower dies, the outstanding amount of the student loan may be cancelled by the executor of the borrower’s estate.


A borrower is required to prove their state of unemployment as well as their search for a job so as to qualify for deferment of the student loan. This can be done by providing letters of application as well as the stubs for unemployment benefits.

Serving the nation

If the borrower enters the uniformed service, they may qualify to have their student loan cancelled or deferred. This can be clarified by the loan holder and commanding officer.

Teaching or serving a needy population

A borrower who is teaching or serving a low-income population qualifies to have their student loan either cancelled or deferred.

Identity theft

A student loan will be cancelled in the event that someone obtained the loan falsely after using your identity.

Leaving school without getting a refund

student-loans-appIn case a borrower did not attend classes or only attended 60% of them and then withdrew from school without receiving a refund, they may cancel the loan. However, this will be done only up to the amount expected as a refund.

Also, there are a variety of options available to ensure that you have no excuse not to pay your loan. These repayment options are:


  • Forbearance/ deferment programs. This enables you to delay the payments on your loans
  • Getting your loan canceled and eliminating all payments,
  • Discharging the loan. This is done through bankruptcy proceedings,
  • Getting on an income-sensitive repayment schedule. This means that your repayment amount will be based on the income that you earn
  • Loan consolidation

As seen in the above situations, the conditions in which a borrower qualifies for cancelling or deferring of the loan are quite strict. The possibilities of having one’s student loan discharged in the case of bankruptcy are minimal.

Rudi Waffler