Discover Student Loan Forgiveness: Is it Possible?

Discover student loans can’t be forgiven because you work in public service, made on-time payments for years, or paid back the original loan amount.

The news is filled with stories of student loans being forgiven because people went to certain schools, worked in public service, or received a Pell Grant. Unfortunately, none of those student loan forgiveness opportunities apply to Discover student loans. All the forgiveness you’ve heard about has been limited to federal student loans. And that’s unlikely to change.

Can Discover student loans be forgiven?

Discover student loans are private student loans, which means they can’t be forgiven. Unlike the federal government, Discover doesn’t wipe out borrowers’ balances after they’ve worked full-time in public service for a decade, made monthly payments for 20+ years, went to a school shut down due to fraud, or suffered a mental or physical disability that’s left them unable to work.

The Education Department is the only lender that provides its borrowers with these student loan forgiveness programs. There is no way to refinance or consolidate your Discover student loans with the federal government to qualify for loan forgiveness — even if your loans were once federal, but you refinanced with a private lender.

There are only two ways to get rid of your student loans with Discover or to knock off some of the interest:

• Negotiate a settlement
• File bankruptcy.

Both have drawbacks. For example, before settling, you must skip several monthly payments and eventually default. You and your cosignerCosignerA person who signs a loan agreement alongside the primary borrower and becomes equally responsible for repayment. Cosigners are common on private student loans when the student has limited credit or income history.’s credit scores will suffer, and your balance will grow. These are just a few of the consequences of defaulting on Discover student loans.

Related: Can You Negotiate a Student Loan Payoff?

Similarly, declaring bankruptcy will stain your credit history for years, and you must file a separate lawsuit, known as an adversary proceeding, to ask the judge to discharge your loans.

Related: Can You File Bankruptcy on Student Loans?

Will Discover student loans be forgiven?

The Biden administration won’t forgive Discover student loans. They also won’t forgive any other private student loans. To be honest, the White House is already having difficulty delivering on the debt cancellation promised to federal student loan borrowers.

Soon after the president announced that he would forgive $10 thousand in federal student debt for most people and up to $20 thousand for Pell Grant recipients, lawsuits were filed challenging the program. Last month, federal judges in Missouri and Texas issued rulings that blocked the US Department of Education from starting the program.

Related: Biden Student Loan Forgiveness

The department filed an emergency action with the Supreme Court, requesting that the injunction be lifted, and billions of dollars in federal student loan debt be forgiven. The justices said they would hear arguments in February, so we won’t know whether the government can move forward with Biden’s student loan debt relief plan until this summer.

Why aren’t Discover student loans being forgiven?

Private student loanPrivate Student LoanA student loan issued by a bank, credit union, or other private lender rather than the federal government. Private loans generally lack federal protections like income-driven repayment and broad forgiveness programs. lenders, such as Discover, rarely forgive loans because they have no incentive to do so. Their goal is to make money, not to lose it. This is why banks and credit unions check borrowers’ credit reports and personal finances as part of the application process. Companies assess risk and price it appropriately by adjusting interest rates.

The federal government has different goals. It must not only make sure people repay the money they borrowed, but it must also make sure everyone who wishes to go to college can do so. That explains why the Education Department offers Pell Grants, Grad Plus Loans, and Parent Loans. And why it allows people with poor or no credit to borrow education loans.

The government must also encourage talented individuals to enter the classroom, provide medical services in low-income areas, practice law in rural areas, and so on. It tries to do that by offering income-driven repayment plans and debt cancellation programs like Teacher Loan Forgiveness and Public Service Loan ForgivenessPublic Service Loan Forgiveness (PSLF)A federal program that forgives the remaining balance on Direct Loans after 120 qualifying monthly payments made while working full-time for a government or qualifying nonprofit employer..

Learn More: How to Apply for Student Loan Forgiveness

Options if you can’t afford Discover student loans

• Pause student loan payments temporarily. Discover will let you pause payments temporarily with a deferment if your income drops because you’re returning to school or are still in residency. But if you’re struggling to make the monthly payments and are nearing delinquencyDelinquencyThe status of a loan when a payment is past due but the borrower has not yet defaulted. Federal loans are delinquent from the first day after a missed payment and are typically reported to credit bureaus after 90 days. due to job loss or a change of income, the company rarely grants forbearance opportunities like the ones offered by the government and other private lenders.
• Ask for an interest rate reduction. Discover doesn’t offer income-driven repaymentIncome-Driven Repayment (IDR)A category of federal student loan repayment plans that calculate monthly payments based on income and family size rather than loan balance. Any remaining balance can be forgiven after 20–25 years of qualifying payments. plans or other student loan repayment terms that consider your living expenses. But it may let you temporarily lower your interest rate a few points or make interest-only payments while you improve your financial situation.
• Refinance for a lower interest rate. Student loan refinance can help lower your interest rate and extend your repayment period if you meet the eligibility requirements. Use an online marketplace like Credible to shop around for the best student loan terms without a hard credit check. Note: Student loan refinancingRefinancingTaking out a new private loan to pay off one or more existing student loans, usually to lower the interest rate or change the repayment term. Refinancing federal loans into a private loan eliminates federal benefits like IDR and PSLF. rates have crept up after reaching historic lows during the payment pause. If you’re going to refinance, do it sooner rather than later. To find the best rate, check out variable rate types of loans.
• File student loan bankruptcy. If you’ve exhausted your repayment options and refinancing is off the table, filing bankruptcy may be your only option for a long-term solution. Student loan discharges due to bankruptcy are scarce but not impossible — you must file a lawsuit known as an adversary proceedingAdversary Proceeding (AP)A separate lawsuit filed within a bankruptcy case, required to seek discharge of student loans. The borrower files the AP against the loan holder and asks the court to find undue hardship. and prove the loans pose an undue hardshipUndue HardshipThe legal standard a borrower must meet to discharge federal student loans in bankruptcy under 11 U.S.C. § 523(a)(8). Courts apply different tests, most commonly the Brunner Test or the Totality of the Circumstances Test.. Recent bankruptcy court decisions and lawmakers’ backing of relief for overburdened borrowers suggest that things might change for private student debt. Read more about private student loan bankruptcy.

Related: Sallie Mae Student Loan Forgiveness

Bottom Line

Although Discover student loans won’t be forgiven, there are steps you can take to make your debt more manageable. Let’s talk if you want to get rid of your student debt quickly.

Schedule a phone call with me. I’m a lawyer with years of experience helping people deal with their loans so they can meet their personal goals: start a family, buy a house, retire, and so on.

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