Can't pay your federal student loans because you are disabled and can't work? Do you expect these disabilities to last for a while? You may be eligible for what is called a Total and Permanent Disability (TPD) discharge of your student loans. Show
What loans are eligible for disability discharge?This disability discharge is only available for these student loans:
Don't know what kind of loan you have – here's how to find out. What is considered a total and permanent disability?Your disability or conditions may be eligible if it:
If one of these applies to you, you may want to apply for a disability discharge. How do I apply?
How do I show that I have a disability?There are three ways to show that you have a disability: 1. If you served in the military, you can show disability with documentation from the Department of Veterans Affairs (VA). You just need proof that you get disability benefits because you are unemployable because of a service-connected disability. 2. If you get Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, your award letter may be enough. You need an award letter that says your disability will be reconsidered by Social Security in 5-7 years. Many people have an award letter saying their disability will be looked at again in 3-5 years. IF this is you, you will need to use option three: 3. You can submit a doctor certification form on page 3 of the Disability Discharge application packet. Your doctor must check the box saying you have a disability and that they expect it to last at least 5 years. How do I submit my application?Submit your application to the Department of Education, not your loan servicer. You should send your application to: U.S. Department of Education What happens after I submit my application?After the Department of Education gets your application, they will:
I have been approved! Now what?After you are approved, your next steps depend on why you were found eligible. Option 1: You were found eligible because of VA Unemployability:
Option 2 and Option 3: My discharge application was submitted based on Social Security or physician statement.
What are the requirements of the discharge monitoring period?During the 3-year monitoring period, you need to make sure you update your address and contact information with your loan servicer. You will get a notice every year asking you to verify that your situation hasn't changed.
If you do not provide this information, your loans may be reinstated. The department may also reinstate your loans if:
Federal Taxes, the IRS and your Loan DischargeUsually when a debt is discharged, the amount that was discharged will count as income in the year it was approved. But between 2021-2025 if you discharge a student loan the amount will not be counted as income. Normally you would get a 1099-C after your loan is discharged. You would then need to file your 1099-C with your federal tax return for the year your loan was discharged. You may be able to file for an exception, for example, if you are not able to pay your debts. Am I responsible for filing the 1099-C at the beginning or the end of the “post-discharge monitoring period”?If you submitted your application for discharge before July 1, 2010, you will need to file your return at the end of the 3 year monitoring period. If you submitted your application for discharge after July 1, 2010, you will need to file your return in the year your loan discharge is approved (before the 3 year monitoring period). You may need help filing your return. Find free tax help in your area. How long does total and permanent disability discharge?If you are approved for TPD discharge based on Social Security Administration (SSA) documentation or a physician's certification, you will be subject to a 3-year post-discharge monitoring period that begins on the date the discharge is approved.
What is total and permanent disability discharge?If you are totally and permanently disabled, you may qualify for a total and permanent disability (TPD) discharge of your federal student loans or TEACH Grant service obligation. If you receive a TPD discharge, you will no longer be required to repay your loans or complete your TEACH Grant service obligation.
What does 3During the 3-year post-discharge monitoring period, we will monitor the National Student Loan Data System (NSLDS) to determine whether you have received a new loan under the Direct Loan Program or a TEACH Grant, or whether you have failed to ensure that a loan or TEACH Grant disbursement was returned to the loan holder ...
What disability qualifies for student loan forgiveness?You can have your student loans forgiven if you're totally and permanently disabled, meaning unable to earn an income because of a medical or mental impairment that has lasted for at least five years or is expected to result in death.
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