When to apply for Loan cancellation
In select circumstances, loans may be canceled if you file a petition for relief under the Bankruptcy Code. Generally, however, bankruptcy doesn’t discharge student loan debt. Discharge. In some circumstances, loans may be canceled if you were unable to complete a course of study because the institution closed or if your loan eligibility was falsely certified. A portion of your loan may also be canceled if the school fails to pay a refund that was due on your loan.
If you pass away before completing repayment, your student loan debt, as well as any PLUS loans your parents took out on your behalf, will be canceled when documentation of your death is submitted to your loan holder.