| Federal Direct Subsidized Loan | Federal Direct Unsubsidized Loan | |
|---|---|---|
| 100 percent of the balance of your student loan will be canceled in the event of your death | Yes | Yes |
| 100 percent of the balance of your loan will be canceled if you become permanently and totally disabled and your attending physician submits the appropriate forms. | Yes | Yes |
For borrowers who filed for bankruptcy after October 7, 1998, a Federal student loan is not dischargeable in bankruptcy unless the bankruptcy court has determined that repayment would cause an undue hardship to the debtor. A loan is no longer dischargeable in bankruptcy no matter how long it has been in repayment.
Loans can also be discharged (canceled) if you cannot complete a course of study because the school closed or the loan application was falsely certified.