Disabled and in Debt: Student Loans Forgiven

Has your disability derailed your financial stability?

Between mounting medical bills, utilities, rent, food, gas, childcare, car loans, and more, being unable to work to pay these off can feel like an incredibly heavy weight. Some resources are out there to assist with these issues…but what about old student debt? Did you start down a career path only to be stopped in your tracks and now unable to repay your student loans?

The Department of Education has a solution for people found disabled through the Department of Veterans Affairs, Social Security, or a physician.

1. VA requirements: 100% service connected disability or found totally disabled based on unemployment rating
2. Social Security: current notice of SSA disability award or you were found disabled in recent years and are not under review for at least 5-7 years from the date of the SSA disability decision
3. Physician: completion of a TPD (Total & Permanent Disability) discharge application stating you cannot perform substantial gainful work activity based on mental/physical/both reasons and they:
   1. Can be expected to result in death,
   2. Lasted a continuous period of at least 60 months, or
   3. Can be expected to last a continuous period of at least 60 months.

The physician must be an MD (doctor of medicine) or DO (doctor of osteopathy).

Beginning September 2021, The Education Department began automatically discharging certain student loans if you qualify under one of the reasons above. You no longer need to apply yourself. If you feel you qualify but have not received paperwork from the Education Department directly, contact their service provider, Nelnet, at at (1-888-303-7818) or email [email protected].

To remain eligible, you must submit documentation of your yearly earnings every 3 years. These requirements are generally based on Federal poverty guidelines, updated annually. A TPD student loan discharge may have tax implications.

Finding the time and energy to handle one more thing when you are disabled and feeling down can be a challenge. This stress can be reduced if you ask a trusted friend or family member to help you walk through this effort.

As a firm, we care about many aspects of our clients’ lives. Sharing helpful resources for everyday issues is just one example in how we aim to offer support.