Student loan forgiveness | Disability

What student loan forgiveness is available for the disabled?

As of July 1^st, 2010 if you are unable to work and earn money due to an injury or illness that has or is expected to continue for no less than 60 months (5 years)  or ultimately result in death you may apply for what is called TPD or Total and Permanent Disability to have your loans discharged.

How much can be forgiven?

100% of the principal and interest is forgiven.  This applies retroactively as well meaning if you made payments on your loan after you’ve been certifiably permanently and totally disabled the lender has to return those payments to you.

How does it work?

The first step is to apply and qualify by having a physician declare you permanently and totally disabled.  Once approved this allows you to stop making payments on your loan(s) permanently.  However you will evaluated over the course of 3 years to monitor any changes in your condition.  There are circumstances when your loan could be reinstated if your condition improves.  If after 3 years you have not taken on any new loans and are not earning yearly income in excess of the poverty guideline for a family of two in your state then your loan will remain completely dissolved.

Can I still qualify if I get disability payments or retirement payments?

Yes.  Only earned income is counted against your qualification for discharge.

What if I’m only partially disabled?

You should qualify to get a loan deferment or forbearance to possibly lower or stall your payments.

What loans are able to be discharged?

Below is a list of loan types that may be discharged :

FFEL

Direct Loans

Perkins

Can I discharge consolidated loans?

Yes.  If you consolidated them after your injury or illness occurred.

How do I get started?

For more information on the process of dissolving your loan click here.  To get you started click here for a Self-Help Packet.  This will move you in the right direction to getting your loans dissolved.