You hear a lot these days about the burden of student loans. As crazy as it sounds, some people in their 40’s and 50’s are still paying off these debts! Suggestions that the government might step in and alleviate some of the debt burden remain just that. So far, if you borrowed money from banks and private lenders, your obligation remains stubbornly intact with no relief in sight. With government-sponsored Stafford and Perkins Loans, there is more financial latitude. Other private loans you are obligated to pay off with interest, even if it takes an eternity. From your particular financial position, it probably will.

While there are several options for student loan discharge, they are rarely granted to most borrowers. More common are student loan forgiveness and repayment assistance programs. The federal government offers forgiveness programs, such as Public Service Loan Forgiveness and Teacher Loan Forgiveness. Information regarding these plans can be provided by the US Department of Education.

Public Service Loan Forgiveness

PSLF is a program for full-time public service employees that have federal direct loans. To take advantage of these programs, borrowers must be enrolled in an Income-Driven Repayment Plan and make 120 qualifying payments to be eligible. Once these obligations are met, the remainder of student debt is forgiven. 

Teacher Loan Forgiveness

TLF is a program for full-time teachers who have completed five consecutive academic years at a Title 1 school. Depending on the subject taught, eligible borrowers may have $5,000 – $17,500 of their federal student loans forgiven.

The Covid Effect – Tax Benefits

The American Rescue Plan Act signed into law on March 11, 2021, includes a provision exempting all student loan forgiveness after December 31, 2020, and before January 1, 2026, from federal taxation.

What about private education loans?

Several suggestions to forgive private student loans floated by the Biden Administration have not come to fruition. One of them explores the idea of canceling up to $50,000 per person in student loan debt. So far, Congress has not addressed the issue.

What about bankruptcy?

Bankruptcy may be the only legal way to get rid of student loan debt. To begin this process, you must declare Chapter 7 or Chapter 13 bankruptcy and demonstrate that repayment imposes an undue hardship on you and your dependents for the foreseeable future, and that you have made good faith efforts to repay your loans. At an adversarial bankruptcy proceeding, creditors will come armed with lawyers and as much evidence as they can muster to support their arguments for why your loans should not be forgiven. If you choose bankruptcy, we recommend you hire an attorney who can defend your interests against a fierce attack by creditors.


Refinancing your loans offers a lower interest rate and a longer payment term. There are hundreds of refinancing services. You may also approach your lender to review refinancing options.

The Hoverson Law Firm has a 30-year history of helping clients with financial problems. If you live in Minnesota and are currently buried in student loan debt, we’re here to help you improve your situation. Call us now at (612) 349-2728.