What If You Have Federal Loans?

Strategic Approaches to Federal Student Loan Discharge

At The Independence Law Firm, we’ve successfully discharged millions in federal student loans through bankruptcy. While federal loans come with strong government protections, they are absolutely dischargeable with the right legal strategy. The key is understanding the unique challenges and opportunities federal loans present—and having attorneys who specialize in overcoming them.

Understanding Federal Student Loan Types

Direct Loans (Most Common Today)

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans (Parent and Grad)
• Direct Consolidation Loans

Older Federal Programs

• FFEL (Federal Family Education Loans)
• Perkins Loans
• HEAL Loans (Health Education Assistance)
• Older consolidation loans

Why Loan Type Matters

• Different discharge standards may apply
• Some have unique vulnerabilities
• Government involvement varies
• Settlement options differ

The Federal Loan Challenge: Government Opposition

What Makes Federal Loans Different

Government Resources

• Department of Justice attorneys
• Unlimited litigation budget
• Political considerations
• Standardized opposition

But Here’s the Good News

• 2022 guidance changed everything
• Government now supports worthy cases
• Clear standards for discharge
• Settlement authority expanded

The Independence Law Firm’s Federal Loan Strategy

Working WITH the New System

Alignment with DOJ Guidance

• Present cases government can support
• Use attestation forms effectively
• Build cooperative relationships
• Achieve faster resolutions

Strategic Case Development

• Focus on factors government recognizes
• Document according to guidelines
• Anticipate government concerns
• Present solutions, not just problems

Multi-Pronged Approach

1. Full Discharge Strategy

• Strongest hardship cases
• Clear inability to pay ever
• Government support possible
• Court approval likely

2. Partial Discharge Strategy

• Reduce principal significantly
• Eliminate accrued interest
• Lower payments permanently
• Government often agrees

3. Settlement Strategy

• Creative payment terms
• Income-based arrangements
• Hybrid discharge/payment plans
• Win-win solutions

Federal Loan Advantages You Might Not Know

The Double-Edged Sword

Yes, Federal Loans Have Protections, But:

• Standardized processes mean predictability
• Government follows clear guidelines
• Political pressure for reasonableness
• Public policy considerations help

The 2022 Guidance Revolution

• Government must consider age
• Medical issues weighted properly
• Good faith interpreted broadly
• Partial discharge explicitly approved

Parent PLUS Loans: Special Opportunities

Unique Discharge Factors:

• Parents didn’t benefit from education
• Age is usually advanced
• Retirement concerns paramount
• Limited working years remaining

Why We Love Parent PLUS Cases:

• Sympathetic facts
• Clear hardship patterns
• Government more flexible
• Judges understand parental sacrifice

Building Your Federal Loan Discharge Case

The Attestation Form Advantage

What It Does:

• Standardizes your hardship claim
• Forces government review
• Creates settlement opportunity
• Expedites case resolution

How We Perfect It:

• Complete every section strategically
• Support with documentation
• Anticipate follow-up questions
• Present compelling narrative

Essential Documentation for Federal Loans

Financial Hardship Evidence

• Detailed budgets (6 months)
• Income documentation
• Medical expenses
• Family obligations

Future Inability Evidence

• Age considerations
• Health prognoses
• Career limitations
• Market realities

Good Faith Documentation

• Payment history (any amount)
• Deferment/forbearance requests
• IDR plan attempts
• Communication records

Common Federal Loan Discharge Paths

Scenario 1: Medical Hardship

Strengths for Discharge:

• Chronic conditions limiting work
• High treatment costs
• Progressive diseases
• Mental health impacts

Government Position:

• Often supportive with documentation
• Partial discharge common
• Full discharge for severe cases

Scenario 2: Age-Based Hardship

Strengths for Discharge:

• 55+ with limited working years
• Retirement savings depleted
• Health declining with age
• Career pivoting impossible

Government Position:

• Increasingly sympathetic
• Recognizes retirement needs
• Supports reasonable settlements

Scenario 3: Economic Hardship

Strengths for Discharge:

• Long-term underemployment
• Failed career despite education
• Geographic limitations
• Family size considerations

Government Position:

• Requires strong documentation
• Partial discharge negotiations
• Creative payment solutions

Federal Loan Settlement Realities

What’s Actually Possible:

Full Discharge

• Complete elimination of debt
• No tax consequences
• Permanent resolution
• Clean credit reporting

Partial Discharge

• 50-80% principal reduction common
• Interest elimination possible
• Remainder on favorable terms
• Government often agrees

Creative Settlements

• $25-50 monthly payments
• Income-based caps
• Temporary hardship suspensions
• Co-debtor releases

Overcoming Federal Loan Obstacles

“The Government Never Settles”

Reality: They settle regularly now

• 2022 guidance encourages it
• Business decision mentality emerging
• Litigation costs considered
• Partial discharge common

“Federal Loans Are Impossible”

Reality: Thousands discharged annually

• Success rates increasing
• Government cooperation growing
• Judges more sympathetic
• Partial options expanding

“You Need Total Disability”

Reality: Many factors considered

• Age alone can suffice
• Economic hardship qualifies
• Family circumstances matter
• Combination factors work

Timeline for Federal Loan Discharge

Months 1-3: Foundation

• Bankruptcy filing
• Attestation form submission
• Government review period
• Initial negotiations

Months 4-6: Negotiation/Litigation

• Settlement discussions
• Discovery if needed
• Creative solutions explored
• Trial preparation backup

Months 6-8: Resolution

• Settlement finalization
• Court approval
• Implementation terms
• Compliance monitoring

Federal Loan Success Factors

What Improves Your Chances:

Clear Documentation

• Medical records
• Financial hardship
• Good faith efforts
• Future projections

Reasonable Expectations

• Open to partial discharge
• Flexible on terms
• Cooperative approach
• Solution-oriented

Strong Legal Team

• Federal loan expertise
• Government relationships
• Strategic positioning
• Proven results

The Independence Law Firm Federal Loan Advantage

Why We Succeed:

• Specialized federal loan focus
• Understand government mentality
• Build cooperative cases
• Achieve optimal outcomes

Our Track Record:

• Hundreds of federal discharges
• Partial and full successes
• Creative settlements
• Satisfied clients

Your Federal Loan Action Plan

Don’t believe the myth that federal loans can’t be discharged. The landscape has changed dramatically, especially since 2022. With the right approach, documentation, and legal team, federal loan discharge is not just possible—it’s happening every day.

Key Takeaways:

• Federal loans ARE dischargeable
• Government now cooperates on worthy cases
• Partial discharge is common
• Creative settlements possible
• Success requires expertise

Contact The Independence Law Firm today to learn how we can help you discharge your federal student loans. The government’s new approach to student loan bankruptcy has opened doors that were closed for decades. Let us help you walk through them.