[Code of Federal Regulations]
[Title 34, Volume 3]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR685.212]

[Page 852-853]
 
                           TITLE 34--EDUCATION
 
                         DEPARTMENT OF EDUCATION
 
PART 685--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM--Table of Contents
 
                     Subpart B--Borrower Provisions
 
Sec. 685.212  Discharge of a loan obligation.

    (a) Death. (1) If a borrower (or the 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 an original or certified copy of the borrower's (or 
student's in the case of a Direct PLUS loan) death certificate.
    (2) If an original or certified copy of the death certificate is not 
available, the Secretary discharges the loan only based on other 
reliable documentation that establishes, to the Secretary's 
satisfaction, that the borrower (or student) has died. The Secretary 
discharges a loan based on documentation other than an original or 
certified copy of the death certificate only under exceptional 
circumstances and on a case-by-case basis.
    (b) Total and permanent disability. If a borrower meets the 
requirements in Sec. 685.213(c), 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 
Sec. 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 Sec. 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 
Sec. 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. (1) For the 
discharge conditions in paragraphs (a), (c), (d), and (e) of this 
section. Upon receipt of acceptable documentation and approval of the 
discharge request, the Secretary returns to the sender, or, for a 
discharge based on death, the borrower's estate, any payments received 
after the date that the eligibility requirements for discharge were met.
    (2) For the discharge condition in paragraph (b) of this section. 
Upon making a final determination of eligibility for

[[Page 853]]

discharge based on total and permanent disability, the Secretary returns 
to the sender any payments received after the date the borrower became 
totally and permanently disabled, as certified under Sec. 685.213(b).
    (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 Sec. 685.217, the Secretary repays up to $5,000 of the 
borrower's Direct Subsidized Loans, Direct Unsubsidized Loans, and, in 
certain cases, Direct Consolidation Loans.

(Approved by the Office of Management and Budget under control number 
1845-0021)

(Authority: 20 U.S.C. 1087a et seq.)

[59 FR 61690, Dec. 1, 1994, as amended at 61 FR 29900, June 12, 1996; 62 
FR 30412, June 3, 1997; 62 FR 63435, Nov. 28, 1997; 63 FR 34816, June 
26, 1998; 64 FR 58969, Nov. 1, 1999; 65 FR 65629, 65694, Nov. 1, 2000; 
66 FR 34765, June 29, 2001]