Quick answer
There are no government grants for debt relief that pay off private debts like credit cards, and the FTC warns that offers claiming otherwise are scams. What the government really offers: waivers of overpayments you owe Social Security or the VA when repayment would be a hardship; student loan discharges for total and permanent disability, closed schools, and borrower defense, plus Public Service Loan Forgiveness; IRS relief through offers in compromise and payment plans; and, in some places, medical debt cancellation paid for by states or cities. For private debts, the free path is a nonprofit credit counselor. None of these charge a fee to apply.
Key facts
- No personal debt grants: federal grants do not pay individuals’ private debts.
- Overpayment waivers: Social Security and VA can waive debts you owe them in hardship.
- Student loans: discharges and PSLF erase federal student debt for people who qualify.
- Medical debt: some states and cities have bought and canceled residents’ medical debt.
- IRS: offers in compromise can settle tax debt for less.
Table of contents
- Are there government grants for debt relief?
- Forgiving debts you owe the government
- Student loan debts that can be erased
- How the IRS reduces tax debt
- Do governments cancel medical debt?
- Credit cards and other private debt
- How debt relief scams use the word “grant”
- Who to contact
- How do I ask an agency for a waiver?
- Debt relief from states
- Your step-by-step plan for this week
- Related guides
- Frequently asked questions
Are there government grants for debt relief?
Not for private debts. As USA.gov explains, federal grants fund organizations and projects, not individuals’ personal bills. When an ad promises a “federal debt relief grant” for credit cards, it is usually selling debt settlement or collecting fees. The real government relief works differently: it reduces or cancels specific kinds of debt, mainly debts owed to the government.
| Debt | Real government relief |
|---|---|
| Social Security overpayment | Waiver or lower repayment |
| VA benefit overpayment | Waiver, compromise, or payment plan |
| Federal student loans | Discharges, PSLF, income-driven repayment |
| Federal tax debt | Offer in compromise, payment plans, penalty relief |
| Medical debt | Hospital charity care; state or city debt buyouts in some areas |
| Credit cards, personal loans | No government program |
Forgiving debts you owe the government
Yes, often. If Social Security paid you too much, you can ask for a waiver when the overpayment was not your fault and repaying would cause hardship, or ask for a lower monthly repayment. The VA has a similar process: you can request a waiver, a compromise, or a payment plan for VA benefit debts through the Debt Management Center. Ask quickly, since deadlines can affect whether collection pauses.
Student loan debts that can be erased
- Total and permanent disability discharge for borrowers who cannot work because of a disability, including veterans with qualifying VA ratings.
- Closed school discharge if your school closed while you were enrolled or soon after.
- Borrower defense if your school misled you.
- Public Service Loan Forgiveness after 120 qualifying payments while working for government or an eligible nonprofit.
- Teacher Loan Forgiveness of up to $17,500 for qualifying teachers in low-income schools.
Apply at StudentAid.gov. These are free; never pay a company to apply for you.
How the IRS reduces tax debt
An offer in compromise can settle tax debt for less than the full amount when paying in full would cause hardship. The IRS also offers payment plans, can mark accounts “currently not collectible,” and can remove some penalties. Low Income Taxpayer Clinics help for free or at low cost.
Do governments cancel medical debt?
Some do. Several states, cities, and counties, including Connecticut and New York City, have used public funds to buy residents’ medical debt for pennies on the dollar and cancel it, usually working with a nonprofit. You cannot apply; if your debt is included, you get a letter. Meanwhile, ask every hospital about its financial assistance policy, which nonprofit hospitals must have. See our medical bill relief guide.
Credit cards and other private debt
For credit cards, personal loans, and collections, the real options are: creditor hardship programs, a nonprofit debt management plan, negotiating directly, and, as a last resort, bankruptcy with free legal help. See our grants to help get out of debt guide for a step-by-step plan.
How debt relief scams use the word “grant”
Watch out: the FTC warns about calls and ads offering “free government grants” to pay bills. Signs of a scam: you are asked to pay a fee, give bank or card numbers, or use gift cards; the caller claims to be from a “Federal Grants Department”; or you are told to stop paying creditors. Real government relief never charges to apply.
Who to contact
| Who | How to reach them | Ask for |
|---|---|---|
| Social Security | 1-800-772-1213 | Overpayment waiver or lower repayment |
| VA Debt Management Center | 800-827-0648 | Waiver, compromise, or payment plan |
| Federal Student Aid | StudentAid.gov | Discharge, PSLF, repayment plans |
| IRS | 800-829-1040 or IRS.gov | Offer in compromise, payment plans |
| Nonprofit credit counselor | A reputable nonprofit agency | Free budget review, debt management plan |
How do I ask an agency for a waiver?
For Social Security, use Form SSA-632 to request a waiver; explain why the overpayment was not your fault and list your monthly income and necessary expenses. For VA debts, submit a waiver request through the VA Debt Management Center within the deadline on your notice. In both cases, keep copies, send documents proving your expenses, and ask whether collection will pause while they decide. If you are denied, you can usually appeal.
Debt relief from states
Some states run programs tied to specific debts, such as mortgage counseling, medical debt protections, or limits on wage garnishment, and some state attorneys general settle cases that cancel debts for affected borrowers. Check your state attorney general’s consumer protection page and your state housing finance agency.
Your step-by-step plan for this week
- Sort your debts into government debts and private debts.
- Government debts: ask Social Security, VA, the IRS, or StudentAid.gov about waivers, discharges, or plans.
- Medical debts: apply for hospital financial assistance.
- Private debts: call creditors about hardship programs and get a free counseling review.
- Ignore “grant” offers that ask for money.
Help is free. Social Security, VA, StudentAid.gov, the IRS, and nonprofit counseling reviews never charge to apply.
For more specifics, see our guides on free government debt relief programs and whether government debt relief programs are a scam.
Related guides
- Debt forgiveness for people with disabilities
- Debt forgiveness for veterans
- Debt management plans
- Credit card debt relief
Frequently asked questions
Are there government grants for debt relief?
Not for private debts like credit cards. Government grants for debt relief do not exist in that form, but the government can waive or discharge certain debts owed to it.
Can Social Security forgive an overpayment?
Yes. You can request a waiver if the overpayment was not your fault and repaying would cause hardship, or ask for a lower repayment.
Can the government cancel my medical debt?
Some states and cities have bought and canceled residents’ medical debt. You cannot apply, but hospital financial assistance is available to everyone who qualifies.
Which student loans can be forgiven?
Federal loans can be discharged for total and permanent disability, closed schools, or borrower defense, and forgiven through PSLF or Teacher Loan Forgiveness.
Is a “federal debt relief grant” call a scam?
Yes. The government does not call people offering grants to pay off debts, and real programs never charge fees.
Sources
Facts on this page were checked against these sources on October 25, 2026. If a source and this page ever disagree, follow the source.
This guide is general information, not legal, tax, or financial advice. National Relief Program is an independent website, not a government agency or debt relief company.
Before you apply: program rules, amounts, and deadlines change. Always confirm details with the official agency or program administrator. Applying for government benefits is free.
National Relief Program is an independent guide, not a government agency. Spotted an error? Email support@nationalreliefprogram.org.
