Can Student Loans Be Forgiven for Those Receiving Social Security Disability?

graduation cap and money

Unfortunately for most students, student loans are a reality. These loans can be intimidating and difficult to pay off, especially for those who become disabled. Whether due to an accident or illness, grads who develop disabilities are often unable to work and make an income, which makes it virtually impossible to make student loan payments.

If you are disabled, are there options you should be aware of to help with student loan debt?

The answer is yes. The U.S. Department of Education created the Total and Permanent Disability discharge (TPD) to forgive federal student loan debt for those who are facing long-term disability.

Here are the most important things you should know about this program.

What Loans are Eligible for Forgiveness?

Under this program, only federal student loans are eligible. These include:

  • William D. Ford Federal Direct Loan Loans
  • Federal Family Education Loan (FFEL) Loans
  • Federal Perkins Loans
  • TEACH Grants

How Do You Prove You are Eligible?

If you are receiving SSD benefits, you must be able to prove that your disability has lasted for at least five years, is expected to last for at least five years or is terminal. These disability requirements are different from those from the Social Security Administration, which require an applicant’s condition to last for at least a year or be considered terminal.

Therefore, even if you are receiving SSD benefits, you are not automatically eligible for loan forgiveness.

If you have received a notice that your next continuing disability review will be scheduled within 5-7 years, you may submit this as proof when applying for TDP discharge.

Potential Issues with TPD Discharge

Once you’re approved for a TPD discharge, you will experience a 3-year monitoring period. During this time, any income not related to your disability benefits will be monitored. If it exceeds a certain limit, the discharge can be canceled.

It’s also important to keep in mind that depending on when your discharge is instated, you could be required to pay taxes on the amount. As the requirements for student loan forgiveness can be complicated, it is helpful to speak with your disability attorney.

Disability Attorneys of Michigan Can Help

Disability Attorneys of Michigan works hard every day helping the disabled of Michigan seek the Social Security Disability Benefits they need. If you are unable to work due to a physical, mental, or cognitive impairment, call Disability Attorneys of Michigan now for a free consultation at 800-949-2900.

Let Michigan’s experienced Social Security Disability law firm help you get the benefits you deserve.

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I will never forget you and the hard work you did to secure my Social Security Disability benefits. Thank you!

- Christine C.