Discharge & Forgiveness

There are both State and Federal programs available to potentially discharge or forgive all or a portion of your federal student loan debt, if you meet specific qualifications. 

Montana State Programs


Federal Programs


For assistance in determining your eligibility for any of these discharge options contact our customer service  (800-537-7508).
 

Quality Educator Loan Assistance Program

The Quality Educator Loan Assistance Program was established by the Montana state legislature and is administered by MGSLP. 

The number of annual awards is limited and contingent upon legislative appropriations. Successful applicants may receive up to $3000 each year for a maximum of four years.

To qualify for the program you must meet the following requirements:
  • A full-time educator holding a valid educator license or a licensed professional providing services to students in a school district, an education cooperative, the Montana School for the Deaf and Blind, the Montana Youth Challenge Program or a state youth correctional facility.
  • Teaching in an impacted school. These are defined as more rural, have a higher percentage of economically disadvantaged students, and/or have greater challenges in closing the achievement gap.
  • Teaching in an academic area impacted by critical educator shortages.


Learn more…

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Bankruptcy

As a general rule, student loans are not discharged in a bankruptcy. You may file a hardship petition or an adversary complaint and request that they be considered for discharge. In rare circumstances hardship petitions may be granted. If you have any questions on bankruptcy and discharging your student loan you should contact a licensed legal professional.

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Death

If something should happen to you, or in the case of a Parent PLUS loan to the child for whom the loan was received, neither you nor your estate are obligated to repay federal student loans. A death certificate must be provided to your lender or guarantor to verify discharge eligibility.

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Closed School

If you are unable to complete your program of study due to your school closing, you may be eligible to have your loans discharged. 

A closed school discharge is only available to students who received their loans on or after January 1, 1986. If you were in attendance, on an approved leave of absence, or withdrew from school within 90 days of a school’s closure date, you may qualify for the discharge.

To receive a discharge due to school closure, you must complete a School Closure Discharge form and submit it to your lender(s) or guarantor.

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False Certification Loan Discharge 

If your loans were falsely certified by your school, you may qualify for a False Certification Loan Discharge. You may qualify, if on or after January 1, 1986, your school performed any of the following acts:
 

  • Admitted you on the basis of your ability to benefit from the training, even though you did not meet the applicable requirements for admission on the basis of ability to benefit
  • Signed your name on the application or promissory note without your authorization
  • Endorsed your name on the loan check, or signed the electronic funds transfer or master check without your authorization


There are additional eligibility requirements and a series of forms and verifications that must be completed to determine qualification for this discharge. Contact MGSLP customer service for more information.

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False Certification as a Result of the Crime of Identity Theft

If you are legally determined to be the victim of identify theft, any student loans received by the convicted perpetrator may be discharged. To be eligible for discharge due to identity theft you must:
 

  • Certify that you did not sign the promissory note (MPN), or that any other means of identification used to obtain the loan were used without your authorization;
  • Certify that you did not knowingly receive or benefit from the proceeds of the loan that was made without your authorization; and
  • Provide a copy of a local, state, or federal court verdict or judgment that conclusively determines that you were the victim of a crime of identity theft by a perpetrator named in the verdict or judgment.


Note: Discharge due to identity theft requires that legal action has been taken, and a perpetrator has been named and convicted. 

The official form for this discharge is still under review, contact MGSLP customer service if you believe you may qualify for discharge due to identity theft.

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Income-Based Repayment Forgiveness

If you meet the qualification for an income-based repayment plan, after 25 years and 300 qualifying payments you may be eligible to have any remaining balance discharged. The amount discharged will be subject to tax liability. Learn more…

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Loan Repayment Program for Civil Legal Assistance Attorneys

This program is subject to legislative appropriation and is currently not funded.

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Perkins Loan Cancellation

Perkins loans offer a variety of cancellation options. Because these loans are administered directly through your school you will want to contact them for specific requirements, but this chart will give you an idea of what is available.

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Service in Areas of National Need – Forgiveness Program

This program is subject to legislative appropriation and is currently not funded.

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Spouses and Parents of September 11, 2001 Victims

If you were the spouse or parent of a victim of the September 11, 2001 terrorist attacks you may be eligible to have any of the loans you owed on September 11, 2001 discharged. Consolidation loans received after September 11, 2001 to pay off loans received prior, may be eligible for discharge as well. 

To qualify for a September 11th victim’s discharge you must meet at least one of the following requirements:

  • Your spouse was an eligible public servant or other eligible victim who died due to injuries suffered in the attacks.
  • Your spouse was an eligible public servant or other eligible victim who became permanently and totally disabled due to injuries suffered in the attacks.
  • You are the parent of an eligible victim who died or became permanently and totally disabled due to injuries suffered in the attacks.


To apply for discharge due to being the spouse or parent of a September 11, 2001 victim you must complete a loan discharge form and submit it to your lender(s) or guarantor.

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Stafford - Teacher Loan Forgiveness 

If you teach full-time at a qualifying school, or location operated by an educational service agency, for 5 consecutive academic years you may qualify to have some or all of your loans forgiven. 

To be eligible for Teacher Loan Forgiveness all of your federal student loans must have been received after October 1, 1998.

The amount of the loan forgiveness is contingent on:

  • When you begin your qualifying teaching service,
  • Your teaching qualifications, and
  • The subject area you teach.


Borrowers who began their teaching service prior to October 30, 2004

May be eligible for a maximum of $5,000 if:

  • You are a full-time elementary school teacher who demonstrates knowledge and teaching skills in reading, writing, mathematics, and other areas of elementary school curriculum; or
  • You are a full-time secondary school teacher teaching in a subject area that is relevant to your academic major.


May be eligible for a maximum of $17,500 if:

  • You completed your qualifying service as a highly qualified (link to new glossary definition) full-time mathematics or science teacher in a qualifying secondary school or as a highly qualified special education teacher.


Borrowers who began their teaching service on or after October 30, 2004
May be eligible for a maximum of:

  • $5,000 if you teach as a highly qualified, full-time teacher in an eligible elementary or secondary school.
  • $17,500 if you teach as a highly qualified full-time mathematics or science teacher and eligible secondary school or as a highly qualified special education teacher.


To apply for forgiveness based on your teaching status you must complete a Teacher Loan Forgiveness Application and submit it to your lender(s) or guarantor.

NOTE: If your total loan balance is such that your loans will be paid in full upon receipt of a Teacher Loan forgiveness, you may be eligible to request a Teacher Loan Forgiveness Forbearance to alleviate the need for you to make payments while completing your 5-year teaching requirement.

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Total and Permanent Disability 

If you are totally and permanently disabled, you may qualify to have your student loan discharged by the Department of Education.  The Department of Education has designated Nelnet as their servicer for disabilities.  If you are disabled, and would like to pursue your options for applying for loan discharge, please contact Nelnet for assistance.  You will need to turn in an application to Nelnet for review. Once you have contacted them, they will contact all of your loan holders and notify them of the status of your disability. You may contact Nelnet in any of the ways listed below:

Nelnet Contact Information:
Phone: 1-888-303-7818
Fax: 1-303-696-5250

Special Assistance Team: A borrower who has special needs and requires assistance navigating the TPD discharge process simply needs to request assistance when he or she contacts the Nelnet Total and Permanent Disability Servicer.

Email: disabilityinformation@nelnet.net
Web site: www.disabilitydischarge.com
Office Hours: 8:00 a.m. - 8:00 p.m. (ET), seven days a week

Mail:
U.S. Department of Education
P.O. Box 87130
Lincoln, NE 68501

For overnight delivery:
U.S. Department of Education
121 South 13th Street, Suite 201
Lincoln, NE 68508

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