Federal Student Loan Disability Discharge – Approved[yoast-breadcrumb]
Getting Your Federal Student Loans Discharged Due to Disability
Having your federal student loans discharged due to disability can be a huge relief. But the process can also be confusing and intimidating. This article will walk you through everything you need to know about getting your federal student loans discharged if you’re totally and permanently disabled.
What is Student Loan Disability Discharge?
Student loan disability discharge is a program that forgives your federal student loans if you become totally and permanently disabled. To qualify, you need to provide documentation that you have a disability that prevents you from working and earning enough to repay your loans.
Some examples of qualifying disabilities are:
- Cerebral palsy
- Muscular dystrophy
- Intellectual disability
- Severe anxiety or depression
If approved, your federal student loans will be forgiven. You won’t have to make any more payments.
Do Private Student Loans Qualify?
Unfortunately, no. Only federal student loans like Direct Loans and Perkins Loans are eligible for disability discharge. Private student loans don’t qualify.
If you have private student loans, you’ll need to keep making payments or look into alternative options like deferment or forbearance. Disability discharge only applies to federal loans.
What’s Considered Totally and Permanently Disabled?
To get your loans discharged, you need to be considered totally and permanently disabled. This means:
- You can’t work and earn a living because of your disability
- Your disability is expected to continue indefinitely or result in death
You’ll need a doctor to certify that you meet this criteria.
Just having a disability isn’t enough. It has to prevent you from being able to work and earn income to repay your student loans.
How to Apply for Student Loan Disability Discharge
Applying involves gathering medical documentation and filling out some forms. Here are the steps:
- Get a physician to fill out a Total and Permanent Disability discharge application.
- Fill out Sections 1 and 3 of the application yourself.
- Submit the completed application and documentation to your loan servicer.
- Continue making loan payments until you’re approved.
- Provide updated medical documentation annually if requested.
Your doctor will need to certify that you’re unable to work and earn income because of your disability. Make sure to follow up if you haven’t heard back after a few weeks.
The process can take 60-90 days. You might need to provide additional documentation too. Don’t get discouraged!
Getting Approved – What Happens Next?
If approved, here’s what you can expect:
- Your federal student loans will be forgiven – no more payments!
- Any co-signed loans will be forgiven too.
- Your approval letter will explain next steps.
- Any loan payments made after your discharge date will be refunded.
- Your loans will be reinstated if your income exceeds the poverty line.
Make sure to review your approval letter closely so you understand the terms. And notify your loan servicer if your income situation changes.
If you start earning above the poverty line, your loans could be reinstated and you’d have to start making payments again.
Getting Denied – Don’t Give Up!
If your disability discharge application gets denied, you still have options:
- Appeal the decision – Provide additional medical documentation.
- Reapply after 6 months – Your condition may have deteriorated.
- Apply for an income-driven repayment plan – To lower your monthly payments.
- Look into loan deferment or forbearance – To temporarily postpone payments.
Don’t get discouraged if you get denied at first. Mistakes happen and you can always provide more evidence of your disability. Consider reapplying or appealing the decision if you’re truly unable to work.
The Disability Discharge Application
The most important part is getting the physician’s certification section filled out properly. Your doctor needs to clearly confirm you are unable to work and earn income.
Here are some tips for getting the doctor’s section completed correctly:
- Explain your situation – Help your doctor understand your disability and limitations.
- Provide medical records – As supporting documentation.
- Follow up if needed – Make sure your doctor submits the completed section.
Do your part by filling out Sections 1 and 3 thoroughly as well. Provide details on:
- Your disability and how it impacts your ability to work
- Your current sources of income
- Previous jobs and income history
The more evidence you provide, the better your chances of getting approved.
Can My Loans Get Reinstated?
Yes, your discharged loans can be reinstated if:
- Your income exceeds the federal poverty line
- You receive a disqualifying disability review
- You fail to submit requested documentation
To avoid reinstatement, make sure to stay under the income limits. And respond promptly if you receive requests for updated medical documentation.
If your loans do get reinstated, you’ll have to resume making payments. But you can reapply for discharge if your condition deteriorates.
One downside is the amount of discharged debt may be considered taxable income by the IRS. You might have to pay income tax on the amount forgiven.
There are some exceptions though – talk to a tax professional to understand how disability discharge could impact your taxes. Planning ahead can help minimize any negative tax consequences.
Alternatives to Disability Discharge
If you don’t get approved for a discharge, here are some other options to make your loans more manageable:
- Income-driven repayment – Lowers your monthly payment based on income.
- Deferment – Temporarily postpones loan payments.
- Forbearance – Also lets you temporarily stop making payments.
- Extended repayment – Stretches out payments over 25 years.
These alternatives provide temporary relief or make your payments more affordable. They allow you to avoid default while managing payments within your budget.
Having federal student loans forgiven due to disability can be life-changing. The process involves submitting detailed medical documentation and patiently navigating the application process. With perseverance and the right evidence, discharge may be possible. Just don’t give up if your first attempt gets denied – you often can successfully appeal or reapply. And be sure to explore alternate repayment plans if discharge isn’t approved.