There are a variety of ways that student loans can be annulled, however the requirements for annulment are quite stringent and the guidelines must be adhered to and met without question. One way to have your student loans annulled is if you are totally and permanently disabled. The Department of Education has a very strict definition concerning what qualifies as a total and permanent disability – or TPD. In order to qualify by the Department’s definition, you must be unable to work or make money due to any injury or illness that is expected to last an indefinite span of time or to end in expiration – that is, death of the student in question. The Department’s definition of and requirements for TPD differ significantly from those standards set by such agencies as Social Security, Veteran’s Affairs, and most other federal agencies.
There are some things to realize when you are trying to obtain an annulment of your student loans in this way. The appropriate loan holders and guaranteed agencies must first review each application; it is only after they approve the application that it can be submitted to the Department of Education for further review. Please realize that, at any time during the review processes, you and your physician may be contacted.
Either a doctor of medicine or a doctor of osteopathy who is authorized to practice medicine in the United States must both describe and authorize both your injury or illness and your status as being totally and permanently disabled, all on the application itself. By that same token, each loan holder must be given a separate application, containing your own original signature as well as the doctor’s signature, which must be either original or a proper photocopy – no stamped signatures are allowed.
If you were disabled under the Department of Education’s definition prior to getting the final disbursement on any federal student loans except for consolidation loans, you do not qualify for an annulment. Injuries, illnesses, and disabilities must occur before the last disbursement.
When you file a TPD application, understand that you will need to verify your income through the Internal Revenue Service. Generally, income has to be verified for the three years immediately following the date you became disabled.
Finally, if the Department of Education approves your TPD application, they will likely then review any eligibility for refunds involving payments made prior to the date of your disability, as well.
Another way to achieve an annulment of your student loans happens when you have gotten a student loan while attending a college or university which closed before the completion of your studies. This also applies to Federal student loans but only if you were actively enrolled, at least on a part time basis, when the university closed, and was thus unable to finish your program. You are still considered to be an actively enrolled student if, at the time of closure, you are on an approved leave of absence. Eligibility is also a possibility if the school closed ninety days, at the most, prior to your withdrawal.
However, students do not qualify for discharges or cancellations under these circumstances if they go on to participate in and complete a similar program at study at a different university. If you are working towards a degree comparable to the one you were going for at the closed school, it is possible that you will have to pay back the amount of the discharge. As well, you do not qualify if you finished all of your course work but simply did not receive a degree.
There is a possibility for your loans to be discharge if the college or university you attend admits that either you were not tested to see how much you could benefit from the course work provided, or you failed the test. Likewise, if the school offered no facilities, classes, or programs to get you on par where you need to be, you may be eligible for an annulment. Similarly, if you fail to meet physical, legal, or other requirements but are accepted into a school or program anyway, an annulment may be possible. In these instances it does not matter whether you have a high school diploma or a comparable certificate, such as a GED.
You are also not eligible for an annulment of your student loans if you simply feel like the school you attended educated you poorly, employed inadequate and unqualified professors, or offered poor equipment. If the institution failed to provide job placement or promised anything else they did not deliver, you are not eligible for any discharge.
According to the regulation of the Perkins loan, federal law stipulates that if a borrower is “providing or supervising the provision of services to high-risk children who are from low-income communities and the families of these children” (Section 674.56[b] of the Perkins Loan), he or she is eligible to receive a child/family services cancellation. Eligibility is also possible if you are taking care of adults in a similar manner. However, with adults, the services you provide must not overshadow those you offer to the high-risk children.