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What are some student loan debt relief options?

Many young adults in Tennessee have found themselves in a catch-22. They may have gone to college to obtain a good-paying job, but in the process they may have racked up thousands of dollars in student loans. Moreover, there is no guarantee that after graduation they will be able to find a job that pays well enough to have them cope with the high student loan payments they now face. They may wonder if there is any way they can eliminate debt related to student loans.

There may be help out there for some individuals who find themselves in such predicaments, at least for federal student loans. For example, if a student's college goes out of business while the person is still enrolled as a student, that person may pursue a closed student loan discharge. The U.S. Department of Education has a program that automatically discharges student loans for those who were enrolled as students in a higher-education institution that closed after November 1, 2013 and who didn't enroll in a different school within 36 months. However, if a student transferred his or her credits to a comparable school, he or she may not be eligible for such a discharge.

Another option for some might be "borrower defense to repayment." This may be an option if the student's school engaged in a fraudulent act or in some other way misrepresented itself. The U.S. Department of Education issued its final regulations in October regarding this type of claim.

Also, there are income-driven repayment plans. These plans base the individual's payments on a percentage of the person's income. After 20 or 25 years of making payments on their student loans, the remaining balance on the individual's student loans will be forgiven (although it may be considered income that will be taxed).

Finally, there is the Public Service Loan Forgiveness program. It is available to individuals who work full-time for the government or a nonprofit organization. This program will forgive an individual's federal loans after one decade of eligible employment, and the loans discharged will not be taxed.

As this shows, there are options for those seeking debt relief for unmanageable student loan payments. However, before pursuing any type of debt relief program, it is important to understand the details and consequences of the program. Seeking the advice of an attorney may help.

Source:, "Ask Brianna: How Can I Get My Student Debt Canceled?," Brianna McGurran, Nov. 11, 2016

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

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