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Student Loan Forgiveness and Disability

By Edited Nov 13, 2013 0 1

The burden of repaying student loan debt is faced by a large percentage of the population. For those former students that are also permanently disabled being able to meet payment deadlines on time and every month can become an impossible task. It is hard enough for people not hampered by a disability. If you or someone you know is struggling to stay afloat it is important to know that the Department of Education does have a program in place for those who have become permanently disabled. The guidelines are very specific and well established, but it may mean better payment terms or even full discharge of debt for those who qualify.

What are the guidelines? In general the first criteria involves the timing of the disability. If the disability was already present and noted at the time of the first application for a student loan then the full principal amount plus any accumulated interest is expected to be repaid. If the documented disability was already noted to be a permanent one there will not be qualifying factors for a potential discharge. If, however, the disability the borrower has at the time of the first loan becomes a total and permanent disability in subsequent years, the Department of Education may allow the borrower to discharge the full amount.

With this policy, the Department of Education requires a total and permanent disability if a student loan is to be forgiven. This disability must be certified and the requirements are far stricter than the proof required or disability claims normally used for federal benefits or used by the Social Security Administration for their disability standard guidelines. Just because a person is receiving federal disability benefits this does not mean that relief from a student loan is guaranteed. The borrower and a doctor must jointly complete an application form asking for a discharge and offering proof of a total and permanent disability. This process can still lead to a denial from the Department of Education in which case the full sum and any accrued interest must be repaid.

Veterans receive special consideration from the Department of Education when it comes to repayment issues involving disability claims. Any veteran who is discharged from service due to a total and permanent disability only needs to submit documentation from the United States Department of Veterans Affairs to receive debt forgiveness from an educational loan obligation. Unlike a civilian, veterans do not need to submit further medical documentation.

There are special rules in place for veterans that have served our country in any branch of the military. If any armed forces personnel are discharged because of a total and permanent disability then the only documentation required by the Department of Education is the disability records supplied by the U.S. Department of Veterans Affairs. This will guarantee debt forgiveness for a student loan. No further documents are needed from civilian doctors.

Student loans are usually very hard to escape from, but in the case of disability there can be exceptions. Talk to the Department of Education and examine the forms necessary to submit a claim. It may be one less financial burden a permanently disabled person has to bear.



Mar 29, 2011 2:10pm
"Just because a person is receiving federal disability benefits this does not mean that relief from a student loan is guaranteed."

Absolutely correct. One might think there would be some type of overlap in two federal government programs, but then again, it's the gov. Someone with a disability may qualify for student loan forgiveness and Social Security Disability, but not know about either one, especially if they're young. And being on SSDR does not guarantee anything regarding student loans. It's a crazy system!
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