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In reality, though, not that many people end up being eligible.

Requirements vary depending on the type of loan, but most offer forgiveness for those employed in certain public-service occupations.

The prospect of your student debt evaporating may seem like a dream come true.

Most loans can be discharged in the following situations: "Circumstances beyond the borrower's control" do not include things like having to drop out of college before graduation or inability to find a job after graduation.

However, there is a possibility that they could include a school using illegal recruiting tactics – for example, guaranteeing the student a well-paid career. Department of Education promised debt relief to students of the bankrupt for-profit Corinthian Colleges schools (click here for more information on how to apply).

Let's look at various options for dealing with student debt: discharge, forgiveness, repayment, debt consolidation – and finally, the worst that can happen if you simply don’t pay.

For a federal education loan to be discharged, there must be circumstances beyond the borrower’s control that prohibit repayment.