Will my student loans be forgiven if I receive disability benefits?
If you receive approval for Social Security Disability (SSD), you might be eligible to have any outstanding student loans forgiven. The U.S. Department of Education permits student loan forgiveness on certain student loans in specific disability situations. However, the standards for loan forgiveness differ from the standards for disability benefits.
To receive student loan forgiveness for a disability, you must:
- Have a total and permanent disability (TPD);
- Have a qualifying federal student loan; and
- Apply for loan forgivenessthrough the U.S. Department of Education and Nelnet.
What is a TPD?
Receiving your approval for disability does not automatically qualify you to have your loans discharged. You have to meet specific standards for a TPD classification.
A TPD means you are unable to perform substantial gainful activity due to your condition. In other words, you are incapable of earning a living by working a job that requires physical or mental exertion. Also, one or more of the following conditions must apply:
- Your disability has lasted 60 months or longer;
- Your doctor expects your disability to last 60 months or longer;
- Your disability will likely result in death; or
- Your military service caused your disability.
These standards are more stringent than the ones that qualify applicants for SSD. For instance, to receive SSD benefits, your disability only has to last for one year, or your doctor has to expect that it will last at least that long.
A disability attorney at the Disability Advantage Group can help. We will gather all the available evidence to show the U.S. Department of Education that your disability is total and permanent. Call us today at 865-566-0800 for a consultation.
How do I prove I meet TPD qualifications?
As your disability lawyers, our biggest job is to prove that you fit the TPD criteria and are eligible for student loan forgiveness.
The easiest way to prove TPD is to provide documentation that the Social Security Administration (SSA) scheduled your next disability review five to seven years from the date of your last review.
A review period of five years or longer implies that your disability has lasted—or your doctor expects it to last—at least 60 months. To bolster your case, we can also submit evidence that your disability keeps you from gainful employment.
If your review period is less than five years or if you lack documentation from the SSA, we can obtain certification of your TPD from a qualified medical professional.
Your doctor will conduct an examination and provide documentation that she expects your condition to last 60 months or longer and that it will prevent you from performing substantial gainful activity.
If you are a veteran and your disability is service-related, we can submit documentation from the U.S. Department of Veterans Affairs on your behalf that shows this.
Which loans are eligible for a TPD discharge?
Not every student loan qualifies for forgiveness on the basis of disability. For instance, if you took out a private loan to pay for living expenses on top of your federal student loans, it is not eligible for a TPD discharge. No matter what loans you have, we can take steps to get your payment reduced or eliminated.
The federal student loans that qualify for a TPD discharge are as follows:
- The William D. Ford Federal Direct Loan Program;
- The Federal Family Education Loan Program;
- The Federal Perkins Loan Program; and
- TEACH Grants.
We will contact Nelnet on your behalf to identify all outstanding loans that qualify for TPD discharge. We will then work through the application process with you, ensuring that we include every available piece of evidence.
What else do I need to know about applying for a TPD discharge?
Three-Year Monitoring Period
After you receive approval for your TPD discharge, the U.S. Department of Education monitors your income for three years. Your earnings cannot surpass the poverty line for a family of two in your state. Any income earned above that level might trigger the reinstatement of your discharged loan.
Future Student Loans
A TPD discharge impacts your ability to receive student loans in the future. You will have to resume payments on your discharged loan if you request a new student loan within three years.
The U.S. Department of Education will report any discharge of $600 or more to the Internal Revenue Service (IRS). Because of this, you might face federal and state taxes on them.
We can help you seek student loan forgiveness based on a disability.
Contact a disability attorney at the Disability Advantage Group if you suffer from a disability and have outstanding student loans. We will work with you to get a TPD discharge and pursue your case aggressively. Call 865-566-0800 today for a consultation.