Student Loan Discharge and Social Security

So you received a favorable ruling in your social security disability action. You are totally disabled from employment, you will receive a benefit check, going forward. There is another benefit that may within your grasp. That benefit, a forgiveness of your student loan!

You may be eligible to have your student loan canceled through a “total and permanent disability” discharge. With some exceptions, noted below, a discharge means you will not have to repay the student loan.

The Eligibility requirements are more restrictive then social security, and more difficult to meet. To be eligible you must be unable to do any ‘substantial gainful activity’ (work involving significant physical and or mental activities) because of a medically determinable physical or mental impairment that has lasted 60 months, can be expected to last for 60 months, is expected to result in death, or is due to a 100% military service connected disability.

Federal student loans eligible for discharge include William D. Ford Federal Direct Loan Program loans, Federal Family Education Loan (FFEL) program loans, Federal Perkins Loans or Education Assistance for College and Higher Education (TEACH) grant service grant obligations. Other loan programs and private loans have their own discharge rules.

To attempt to gain the benefit of the program you must apply for a discharge http://disabilitydischarge.com/Pages?Users.aspx?id=35 and meet their qualifications. You submit the application to your loan servicer, you must submit an application for each loan holder.

If you are not in default and being contacted by the loan servicing agency handling your loan, it may be difficult to discovery who holds your loan. In an attempt to locate the holder of your loan you can contact:

1. National Student Loan Data System (www.nsids.ed.gov)
2. FAS Collections Office 800-621-3115 (current 6/13)
3. Federal Student Aid Information Center 800-433-3243

Notwithstanding the foregoing the Department of Education will still do a three year discharge review to insure that the beneficiary is still disabled, or if the medical improvement not expected category has changed.