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Student loans never expire like other types of debt, which is good news for the millions of Americans who have taken out student loans. But it’s also important to understand how long you’ll be paying your student loan, and what happens if you can’t make payments on time.
Student loans are often the most expensive type of debt that borrowers will ever encounter. They’re also one of the few kinds of debts that can’t be discharged in bankruptcy. That means if you fall behind on your payments or default on your loans, there’s no easy way out—and it could lead to serious consequences.
Who has to pay off student loans?
Most students take out federal or private student loans while they’re still in school, but there are some exceptions: If you’re a parent borrowing money for your child’s education at an accredited college or university, then those loans might not be considered part of your federal debt burden—you don’t have to pay them back! If you’re a graduate student who took out a loan while pursuing an advanced degree and didn’t complete that program within six years after graduation (or eight years in certain circumstances), then any remaining balance is forgiven as well.
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Do Student Loans Expire?
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Biding your time until your student loans expire? It’s understandable to want to wish away your student loans. Unfortunately, hoping they hit an expiration date and then magically evaporate isn’t likely to happen. Federal student loans never expire, and while it’s not out of the realm of possibility for private loans, it is highly unlikely.
In this article, we’re first going to get into why your student loans aren’t likely to expire. And then we’ll get to the crux of the issue: dealing with student loan debt. Perhaps if you can make your debt more manageable, you won’t spend as much time wishing it would expire.
Federal Student Loans Don’t Expire
Whether you’ve been paying off your student loans for six months or six years, it might be tempting to give up and stop paying your loans entirely, hoping that they will eventually expire. If you’re wondering “when does my student loan expire?” the answer, for federal loans, is never. That’s right—there is no statute of limitations for collections on federal student loans, which means that if you stop making payments, your lender or a debt collector can sue you to force you to pay up no matter how long it has been since you last made a payment.
After at least 270 days of non-payment, your federal student loan will be in default.
So what happens if you do stop paying your federal student loans altogether? First, your total balance will continue to increase. Whether or not you’re making any payments, interest will accrue, which means that every month your lender will add your new interest payment to your underlying loan.
As if that doesn’t sound bad enough, after at least 270 days of non-payment, your federal student loan will be in default and a number of things can happen including loan acceleration (meaning your entire balance becomes due) and your loan can be sent to collections, which can damage your credit score and lead to additional fees from a collection agency. The federal government may also decide to withhold your tax refund or even garnish wages directly from your paycheck. They also can sue you to force you to pay up.
While you can technically get rid of federal student loans in bankruptcy, it’s extremely rare. In order to potentially get your student loans (federal or private) discharged in bankruptcy, you would have to prove that paying your loans would cause you “undue hardship” (to borrow a phrase right from the U.S. Bankruptcy Code ). Proving that paying your loans would cause “undue hardship” typically involves passing the Brunner test , which is a test many courts use that basically lays out ways in which you might claim “undue hardship.”
In short, it’s far from a sure thing and the process is not especially clear cut. But whether you’re 19 or 90, your federal student loans will not just automatically expire after a period of non-payment, and failing to pay has some serious consequences.
Some Private Loans May Have Statutes of Limitations
Unlike federal student loans, private student loans may be bound by a statute of limitations on collections. The statute of limitations varies by state and is generally between three and 10 years from the date you totally stop engaging with your lender at all.
Before you cancel your monthly payments, it is important to know that a statute of limitations is not the same thing as an expiration date on your loans. A statute of limitations is merely a limit on the time that a lender or debt collector has to sue you in court to force you to pay back the loans.
Even if your debt is outside of the statute of limitations, you still technically owe the money, and failure to pay could lead to default.
Alternatives to Waiting for Student Loans to Expire
Just because student loans don’t technically expire doesn’t mean that there aren’t other ways to lower your student loan debt. For example, some students may qualify for federal loan forgiveness.
Public Service Loan Forgiveness (PSLF) is available to some professionals who work in certain fields like government, the nonprofit sector, and healthcare. The idea behind federal student loan forgiveness is to encourage grads to fill needed jobs without worrying that they will never be able to pay off their student debt on a public interest salary.
10+ Student Loan Forgiveness Programs That Discharge Loans
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Student loan forgiveness might seem too good to be true, but there are legitimate ways to get it through free government programs.
The following options are available only to borrowers with federal student loans. Some programs have very specific requirements that make them difficult to qualify for, but income-driven repayment plans are open to most borrowers.
1. Income-driven repayment forgiveness. The federal government offers four main income-driven repayment plans, which allow you to cap your loan payments at a percentage of your monthly income. When enrolled in one of these plans, your remaining loan balance will be eligible for forgiveness after 20 or 25 years, depending on the plan. These plans are most beneficial for those with large loan balances relative to their income. Only 32 borrowers have received loan forgiveness through income-driven repayment forgiveness, according to the National Consumer Law Center. This forgiveness was made tax free retroactive to Dec. 2020 through the end of 2025, as part of the March 2021 American Rescue Plan. However, most borrowers will not qualify for forgiveness through income-driven repayment until the early 2030s.
2. Public Service Loan Forgiveness.Public Service Loan Forgiveness is available to government and qualifying nonprofit employees with federal student loans. Eligible borrowers can have their remaining loan balance forgiven tax-free after making 120 qualifying loan payments. Until Oct. 31, 2022, the Education Department has expanded which payments on federal student loans count toward PSLF through a limited waiver; now, payments on FFEL and Perkins loans, late payments and payments made on any repayment plan will retroactively count as qualifying payments.
3. Teacher Loan Forgiveness. Teachers employed full time in low-income public elementary or secondary schools may be eligible for Teacher Loan Forgiveness after working for five consecutive years. They can have up to $17,500 in federal direct or Stafford loans forgiven. To qualify, teachers must have taken out loans after Oct. 1, 1998.
4. Student loan forgiveness for nurses. Nurses shouldering student debt have several options for student loan forgiveness: Public Service Loan Forgiveness, Perkins loan cancellation, and the NURSE Corps Loan Repayment Program, which pays up to 85% of qualified nurses’ unpaid college debt. Public Service Loan Forgiveness may be the most likely option for most nurses — few borrowers have Perkins loans, and the NURSE Corps program is highly competitive.
Other student loan forgiveness programs
There are a few additional niche student loan forgiveness or payment assistance programs you may qualify for through federal or state programs. Eligibility in these programs depends on your profession and where you work.
State-sponsored repayment assistance programs. Licensed teachers, nurses, doctors and lawyers in certain states may be able to take advantage of programs to assist with repaying debt. For example, the Mississippi Teacher Loan Repayment Program will pay up to $3,000 per year for a maximum of four years on undergraduate educational loans to teachers with a specific teaching license for each year of teaching full time in a particular geographical or subject area. Contact your state’s higher education department to find out if you qualify for a program.
Military student loan forgiveness and assistance. Military personnel in the Army, Navy, Air Force, National Guard and Coast Guard may qualify for their own loan forgiveness programs. In the National Guard, for example, qualifying soldiers and officers could receive up to $50,000 to pay off federal student loans through the Student Loan Repayment Program.
Additional student loan repayment assistance programs (LRAPs): There may be other national or organizational student loan repayment assistance programs offered for public service professions. The National Institutes of Health, for example, offers up to $35,000 in debt assistance annually to health professionals who are appointed by the institutes to conduct research. The American Bar Association has a list of state LRAPs for lawyers.
Student loan cancellation programs
Perkins loan cancellation. Borrowers with federal Perkins loans can have up to 100% of their loans canceled if they work in a public service job for five years. In many cases, approved borrowers will see a percentage of their loans discharged incrementally for each year worked. The Perkins loan teacher benefit is for teachers who work full time in a low-income public school or who teach qualifying subjects, such as special education, math, science or a foreign language.
Student loan discharge programs
Closed school discharge. You may qualify for loan discharge if your school closes. At the time of closure, you must have been enrolled or have left within 120 days, without receiving a degree. If you qualify, contact your loan servicer to start the application process. You’ll need to continue making payments on your loan while your application is being processed. If you’re approved, you will no longer have to make loan payments and you may be refunded some or all of the past payments you made on the loan.
Borrower defense to repayment discharge. Borrowers defrauded by their colleges may qualify for debt relief. You’ll need to file a borrower defense to repayment claim with the U.S. Department of Education. If you qualify, you may have your loans automatically discharged, at the discretion of the Education Department, if your school was involved in clear, widespread fraud or misrepresentation that affected a broad group of borrowers.
Total and permanent disability discharge. If you cannot work due to being totally and permanently disabled, physically or mentally, you may qualify to have your remaining student loan debt canceled. To be eligible for a total and permanent disability discharge, you’ll need to provide documentation proving your disability. Once your loans are discharged, the government may monitor your finances and disability for three years. If you don’t meet requirements during the monitoring period, your loans may be reinstated. Details on the application process are available at disabilitydischarge.com.
Total and permanent disability discharge for veterans. Veterans who are totally and permanently disabled will have their student loan debt discharged. The process will be automatic unless they decline due to potential state tax liability (there is no federal tax liability for veteran loan forgiveness).
Discharge due to death. If you die, your federal loans will be discharged once a death certificate is submitted to your loan servicer. Your parent’s PLUS loans used to pay for your schooling will be discharged if the parent who holds the loan or you die.
Legitimate federal forgiveness, cancellation and discharge programs are free through the Department of Education, but there are other costs to consider.
Beware of scams. So-called debt relief companies claim to get rid of debt but rarely deliver after charging already-struggling borrowers high upfront fees. The only way to get debt discharged is through the legitimate government programs above, and it costs nothing to apply to them.
Forgiveness isn’t an option for defaulted loans. You’ll need to use consolidation or rehabilitation to get defaulted federal student loans in good standing before they’re eligible for forgiveness programs. If your loans won’t qualify for forgiveness, student loan settlement or bankruptcy may reduce your debt in severe cases. Defaulted federal loans are eligible for discharge programs.
Student loans never expire. They’re just there, hanging over your head until you pay them back or die.
If you’re a student and you have a loan, then you will be paying it back for the rest of your life.
Student loans are usually divided into three categories: federal student loans, private student loans, and state-sponsored education loans. Federal student loans are issued by the government directly to students and their families. Private loans are issued by banks or other financial institutions in order to help students pay for college expenses. State-sponsored education loans are also called institutional financing because they come from schools’ own resources instead of from banks or other private sources.
The interest rate on federal student loans is fixed at 6% while interest rates on private student loans vary widely depending on the borrower’s credit rating and other factors such as whether it’s an undergraduate or graduate degree program being funded with funds borrowed from a lender like Wells Fargo Bank or Citibank Bank USA Corp.”