April 24, 2020
Most people seem to believe
that student loans simply never go away, but for people with permanent
disabilities, there may be some relief. People with certain loans and
required documentation of total and permanent disability may submit an application to have their loans discharged.
The Federal Student Aid
Office of the U.S. Department of Education provides information to the public
laying out the requirements and process for a discharge.
What types of loans are
eligible for discharge?
William D. Ford Federal
Direct Loan Program loans (Direct Loans), Federal Family Education Loan Program
loans (FFEL), Federal Perkins Loans, and TEACH Grant service obligations are
eligible for total and permanent disability discharges. Any combination
of these loans can be forgiven with a single application.
What documentation do I
need to provide?
- Veterans can qualify for a total and permanent disability discharge by providing a VA disability determination showing either a service-connected disability that is “100% disabling,” or showing total disability based on an individual unemployability rating.
- Individuals eligible for Social Security Disability (SSDI) or Supplemental Security Income (SSI) can qualify for a discharge by providing a copy of either a Social Security Administration “Notice of Award” or “Benefits Planning
Query.” On page 4 of the Notice of Award, under “Things to Remember
for the Future,” the review period lists a number of years between reviews. To qualify for a discharge, your review period must be between 5 to 7 years.
- All other individuals must have a physician complete section 4 of the application.
What else do I need to
Nelnet is the servicer on these loans, so they will review the application. Once you file the application, you will not be required to submit any payments on your loans while your application is being reviewed. Veterans whose total and permanent disability discharge applications are approved will have their payments returned to them dating back to the effective date of the VA’s disability determination. However, individuals sending in SSA documentation will only have payments returned from the date Nelnet received the documentation, and individuals who submit a physician’s certification will only have their payments returned from the date of the certification, so the longer you wait to file, the more you’ll continue to have to pay on your loans.
Approved applicants enter
into a three-year post discharge monitoring period, and must complete certain steps or risk having their
Different cases have different
circumstances and complications. This information is not intended to
address every possible situation. This is general legal
information. For more guidance about your particular situation, please contact Legal Aid or talk to a lawyer.