Do student loans go away after 7 years? — Student Loan Debt Guide[yoast-breadcrumb]
Do Student Loans Go Away After 7 Years? — Student Loan Debt Guide
Figuring out how to handle student loan debt can be really stressful and confusing. A lot of people wonder if student loans just go away after a certain number of years. The truth is, it’s complicated. There are a few situations where student loans can be forgiven or discharged after 7 years, but it doesn’t happen automatically. Let’s break it down so you understand your options when it comes to making student loan debt go away.
The General Rule – Student Loans Don’t Disappear
The general rule is that your federal student loans don’t just disappear after 7 years, or any set time period. Federal student loans typically have to be repaid in full. Now, there are some exceptions to this rule which we’ll get into. But you shouldn’t count on your loans magically going away on their own.
With federal student loans like Direct Loans and Perkins Loans, there is no time limit for the government to collect on the debt. They can pursue you for repayment indefinitely until the debt is repaid through wage garnishment or by taking your tax refunds. It’s nasty business.
Private student loans are a bit different. They have a statute of limitations that varies by state, often around 6 years from the date you default. But they can still sue you for years afterwards to try collecting the debt. So even with private loans, don’t expect the debt to magically disappear after 7 years.
When Student Loans Can Be Forgiven
Now let’s talk about some cases where your student loans can be forgiven or discharged after a period of time. This is what most people really want to know – how to legally make their student loans go away.
Public Service Loan Forgiveness
One program that offers student loan forgiveness is Public Service Loan Forgiveness (PSLF). Under PSLF, your remaining federal student loan balance can be forgiven after you make 120 qualifying monthly payments while working full-time for an eligible public service employer.
It takes at least 10 years of qualifying payments to receive forgiveness under PSLF. So this program can potentially make your federal student loans disappear after a decade of public service work. The Department of Education has a whole list of eligible federal loans and requirements for PSLF if you want to explore it further.
Teacher Loan Forgiveness
If you are employed as a full-time teacher in certain low-income schools and educational service agencies, you may be eligible for Teacher Loan Forgiveness after 5 consecutive years of service. This program can forgive up to $17,500 of your subsidized and unsubsidized loans as well as your direct consolidation loans. It’s not as comprehensive as PSLF, but can still wipe away a chunk of student loan debt if you meet the eligibility criteria.
Borrower Defense to Repayment
If you were defrauded by your school, you may be able to have your federal student loans forgiven through Borrower Defense to Repayment. This program relieves you of having to repay loans if your school misled you or engaged in other misconduct. There is no specific timeline for forgiveness under Borrower Defense, but cases often take at least several years to be processed and approved.
Finally, student loans can potentially be discharged through bankruptcy, though this is difficult to achieve. You must file a petition in bankruptcy court and prove repaying the loans would cause “undue hardship.” Courts use different tests to evaluate undue hardship, and less than 50% of petitions for student loan discharge are approved. But it is possible in some cases to prove repaying student loans would be an undue hardship and have the debts forgiven after 7 years of payments.
The Bottom Line
While student loans won’t disappear on their own after 7 years, there are cases where legal forgiveness or discharge is possible if you meet certain requirements. Programs like PSLF, Teacher Loan Forgiveness, Borrower Defense, and bankruptcy can provide relief, but often take years of payments, paperwork, and patience to achieve. Don’t expect your loans to vanish – be proactive if you want them gone. Evaluate your options, pick a strategy, and work diligently toward the goal of becoming student debt free.