Overview

An administrative loan discharge cancels eligible federal student loan debt when specific conditions exist — for example, your school closed while you were enrolled, the school misrepresented key facts, or your loan was falsely certified by the school. The U.S. Department of Education manages these discharges and evaluates claims case by case (U.S. Department of Education, studentaid.gov).

Step-by-step application process

  1. Identify the correct discharge pathway
  • Closed-school discharge: applies if your school closed while you were enrolled or within a short period after you withdrew. More details: Closed School Discharge.
  • Borrower defense to repayment: applies when the school made false statements or engaged in misconduct that led you to take out loans. See: Borrower Defense to Repayment.
  • Other administrative discharges: false certification, unpaid refunds, or military service-related discharges — review the Department of Education pages for specific rules.
  1. Gather supporting evidence (organized and dated)
  • Enrollment and attendance records (class schedules, transcripts, registration confirmations).
  • Financial records: tuition statements, canceled checks, payment receipts, grant/loan award letters.
  • Communications from the school: emails, letters, handouts, brochures, advertising materials (including claims about job placement or licensure success).
  • Proof of school closure: state licensing or accreditor notices, news articles, official closure letters.
  • Documentation of misrepresentation: screenshots of web pages, recruiting scripts, marketing emails, job-placement claims, and names of staff who made representations.
  • Third-party evidence: complaints filed with state agencies, Better Business Bureau records, police reports, or court filings if applicable.
  1. Complete the correct form online
  • Closed-school discharge and borrower-defense requests start at the Federal Student Aid site (studentaid.gov/manage-loans/forgiveness-cancellation). Use the borrower defense form for misrepresentation claims; use the closed-school page to begin a closed-school discharge.
  • If the online form does not fit your situation, contact your loan servicer or Federal Student Aid for guidance.
  1. Submit your application and documentation
  • Upload documents through studentaid.gov when the application allows. If you must mail documents, keep copies and use certified mail or another trackable service.
  • Label files and use a simple index (e.g., Exhibit A: Enrollment, Exhibit B: Emails) to help reviewers.
  1. Monitor status and follow up
  • Track your application at studentaid.gov and keep records of any correspondence. Contact your loan servicer to confirm receipt and ask about temporary relief options (forbearance or administrative forbearance) while your claim is reviewed.

What evidence weighs most heavily?

  • Direct school records showing enrollment dates and charges.
  • Clear, contemporaneous communications from the school (promotional materials or emails) stating job-placement rates, accreditation, or licensure promises.
  • Proof the school closed (state or accreditor notices, press coverage).
  • Documentation that links the school’s statements to your enrollment decision (e.g., you accepted enrollment or loan because of a specific claim).

Typical timeline and outcomes

Processing times vary: straightforward closed-school discharges may take weeks to a few months; borrower-defense claims — especially complex misconduct allegations — can take many months to a year or longer depending on caseload and whether the Department requests more evidence. The Department will notify you of interim decisions, approval, or partial relief. During review, you may be eligible for temporary payment relief (check studentaid.gov).

Common mistakes to avoid

  • Submitting incomplete or unorganized evidence.
  • Waiting to contact your loan servicer; ask about interim relief options.
  • Assuming automatic approval — you must apply and document your claim.

Practical tips from experience

  • Create a single PDF index and attach labeled exhibits; reviewers appreciate well-organized submissions.
  • Keep a log of dates you mailed or uploaded documents and any phone calls with servicers or Federal Student Aid.
  • Consult a nonprofit borrower counselor or an attorney experienced in student-loan borrower-defense claims if your case involves alleged fraud or complex misconduct.

Tax and credit considerations

  • Historically, the tax treatment of discharged student loans changed under federal law (American Rescue Plan Act made many discharges non-taxable through 2025). Tax rules can change — verify current IRS guidance or consult a tax professional before assuming tax consequences (IRS.gov).
  • Discharge normally removes the loan balance; however, credit reporting timing varies — contact your loan servicer and tax advisor about next steps.

Authoritative sources

Internal resources

Professional disclaimer

This article is educational and not legal, tax, or financial advice. Rules and timelines change; check studentaid.gov and the IRS for current guidance and consult a qualified attorney or tax professional about your specific case.