Source: https://www.law.cornell.edu/cfr/text/34/685.212
Timestamp: 2020-05-27 00:49:19
Document Index: 774921351

Matched Legal Cases: ['§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685', '§ 685']

34 CFR § 685.212 - Discharge of a loan obligation. | CFR | US Law | LII / Legal Information Institute
Section 685.212. Discharge of a loan obligation.
34 CFR § 685.212 - Discharge of a loan obligation.
Link to an amendment published at 84 FR 49929, Sept. 23, 2019.
(1) If a borrower (or a student on whose behalf a parent borrowed a Direct PLUS Loan) dies, the Secretary discharges the obligation of the borrower and any endorser to make any further payments on the loan based on -
(iv) Verification of the borrower's or student's death through an authoritative Federal or State electronic database approved for use by the Secretary.
(2) Under exceptional circumstances and on a case-by-case basis, the Secretary discharges a loan based upon other reliable documentation of the borrower's or student's death that is acceptable to the Secretary.
(3) In the case of a Direct Consolidation Loan that repaid a Direct PLUS Loan or a Federal PLUS Loan obtained on behalf of a student who dies, the Secretary discharges an amount equal to the portion of the outstanding balance of the consolidation loan, as of the date of the student's death, attributable to that Direct PLUS Loan or Federal PLUS Loan.
(b) Total and permanent disability. If a borrower meets the requirements in § 685.213, the Secretary discharges the obligation of the borrower and any endorser to make any further payments on the loan.
(c) Bankruptcy. If a borrower's obligation to repay a loan is discharged in bankruptcy, the Secretary does not require the borrower to make any further payments on the loan.
(d) Closed schools. If a borrower meets the requirements in § 685.214, the Secretary discharges the obligation of the borrower and any endorser to make any further payments on the loan. In the case of a Direct Consolidation Loan, the Secretary discharges the portion of the consolidation loan equal to the amount of the discharge applicable to any loan disbursed, in whole or in part, on or after January 1, 1986 that was included in the consolidation loan.
(e) False certification and unauthorized disbursement. If a borrower meets the requirements in § 685.215, the Secretary discharges the obligation of the borrower and any endorser to make any further payments on the loan. In the case of a Direct Consolidation Loan, the Secretary discharges the portion of the consolidation loan equal to the amount of the discharge applicable to any loan disbursed, in whole or in part, on or after January 1, 1986 that was included in the consolidation loan.
(f) Unpaid refunds. If a borrower meets the requirements in § 685.216, the Secretary discharges the obligation of the borrower and any endorser to make any further payments on the amount of the loan equal to the unpaid refund and any accrued interest and other charges associated with the unpaid refund. In the case of a Direct Consolidation Loan, the Secretary discharges the portion of the consolidation loan equal to the amount of the unpaid refund owed on any loan disbursed, in whole or in part, on or after January 1, 1986 that was included in the consolidation loan.
(g) Payments received after eligibility for discharge -
(2) For the discharge condition in paragraph (b) of this section. Upon making a final determination of eligibility for discharge based on total and permanent disability, the Secretary returns to the sender any payments received after the date specified in § 685.213(b)(4)(iii) or 685.213(c)(2)(i), as applicable.
(3) For the discharge condition in paragraph (f) of this section. Upon receipt of acceptable documentation and approval of the discharge request, the Secretary returns to the sender payments received in excess of the amount owed on the loan after applying the unpaid refund.
(h) Teacher loan forgiveness program. If a new borrower meets the requirements in § 685.217, the Secretary repays up to $5,000, or up to $17,500, of the borrower's Direct Subsidized Loans, Direct Unsubsidized Loans, and, in certain cases, Direct Consolidation Loans.
(i) Public Service Loan Forgiveness Program. If a borrower meets the requirements in § 685.219, the Secretary cancels the remaining principal and accrued interest of the borrower's eligible Direct Subsidized Loan, Direct Unsubsidized Loan, Direct PLUS Loan, and Direct Consolidation Loan.
(j) September 11 survivors discharge. If a borrower meets the requirements in § 685.218, the Secretary discharges the obligation of the borrower and any endorser to make any further payments -
(1) On an eligible Direct Loan if the borrower qualifies as the spouse of an eligible public servant;
(2) On the portion of a joint Direct Consolidation Loan incurred on behalf of an eligible victim, if the borrower qualifies as the spouse of an eligible victim;
(3) On a Direct PLUS Loan incurred on behalf of an eligible victim if the borrower qualifies as an eligible parent; and
(4) On the portion of a Direct Consolidation Loan that repaid a PLUS loan incurred on behalf of an eligible victim, if the borrower qualifies as an eligible parent.
(k) Borrower defenses.
(1) If a borrower defense is approved under § 685.206(c) or § 685.222 -
(i) The Secretary discharges the obligation of the borrower in whole or in part in accordance with the procedures in §§ 685.206(c) and 685.222, respectively; and
(ii) The Secretary returns to the borrower payments made by the borrower or otherwise recovered on the loan that exceed the amount owed on that portion of the loan not discharged, if the borrower asserted the claim not later than -
(A) For a claim subject to § 685.206(c), the limitation period under applicable law to the claim on which relief was granted; or
(B) For a claim subject to § 685.222, the limitation period in § 685.222(b), (c), or (d), as applicable.
(2) In the case of a Direct Consolidation Loan, a borrower may assert a borrower defense under § 685.206(c) or § 685.222 with respect to a Direct Loan, FFEL Program Loan, Federal Perkins Loan, Health Professions Student Loan, Loan for Disadvantaged Students under subpart II of part A of title VII of the Public Health Service Act, Health Education Assistance Loan, or Nursing Loan made under part E of the Public Health Service Act that was repaid by the Direct Consolidation Loan.
(i) The Secretary considers a borrower defense claim asserted on a Direct Consolidation Loan by determining -
(A) Whether the act or omission of the school with regard to the loan described in paragraph (k)(2) of this section, other than a Direct Subsidized, Unsubsidized, or PLUS Loan, constitutes a borrower defense under § 685.206(c), for a Direct Consolidation Loan made before July 1, 2017, or under § 685.222, for a Direct Consolidation Loan made on or after July 1, 2017; or
(B) Whether the act or omission of the school with regard to a Direct Subsidized, Unsubsidized, or PLUS Loan made on after July 1, 2017 that was paid off by the Direct Consolidation Loan, constitutes a borrower defense under § 685.222.
(ii) If the borrower defense is approved, the Secretary discharges the appropriate portion of the Direct Consolidation Loan.
(iii) The Secretary returns to the borrower payments made by the borrower or otherwise recovered on the Direct Consolidation Loan that exceed the amount owed on that portion of the Direct Consolidation Loan not discharged, if the borrower asserted the claim not later than -
(A) For a claim asserted under § 685.206(c), the limitation period under the law applicable to the claim on which relief was granted; or
(B) For a claim asserted under § 685.222, the limitation period in § 685.222(b), (c), or (d), as applicable.
(iv) The Secretary returns to the borrower a payment made by the borrower or otherwise recovered on the loan described in paragraph (k)(2) of this section only if -
(A) The payment was made directly to the Secretary on the loan; and
(B) The borrower proves that the loan to which the payment was credited was not legally enforceable under applicable law in the amount for which that payment was applied.
[59 FR 61690, Dec. 1, 1994]
For Federal Register citations affecting § 685.212, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at www.govinfo.gov.