One of the most frequent questions I get from my clients is whether their student loan debt can be forgiven if they are found disabled. The short answer to this question is YES.
First, this article applies to forgiveness of federal student loan debt because of a disability finding by the Social Security Administration only. There are many ways that federal student loan debt can be forgiven, so if this article doesn’t apply to you, keep looking, there may still be something out there that can help.
When a person is found disabled by the Social Security Administration they become eligible for federal student loan forgiveness. However, they must apply to receive that forgiveness and there are a lot of exceptions that can apply. You can learn more about how to apply here. Once they receive forgiveness they are subject to a three-year monitoring period. During this time the borrower is required to submit if annual earnings are to high, a new student loan is issued to the borrower, SSA determines that the borrower is no longer disabled, SSA determines that it will schedule a continuing disability review sooner that five to seven years.
On March 29th, the U.S. Department of Education announced that it will waive those post-discharge monitoring requirements for more than 230,000 borrowers during the COVID-19 emergency. More than 41,000 of these individuals who have already had the loans reinstated will have their loans put back into discharge status and have any payments made during the COVID-19 emergency refunded.
More recently, three advocacy groups, the National Student Legal Defense Network, Community Legal Aid Society of Delaware, and Justice in Aging filed a petition with the Department of Education requesting that it automatically forgive the student loan debt of borrowers who are awarded Social Security disability benefits. According to the press release “[a]s of 2020, SSA has identified over 625,000 individuals with disabilities who are entitled to a TPD discharge and has provided that information to the Department,” but two-thirds of those people have not had their loans discharged. Their petition asks the Department of Education to drop the requirement that Social Security disability recipients file a separate application for student loan forgiveness. This would be a huge benefit to those individuals by providing more than $14 billion in loan relief to about 400,000 borrowers.
Whether this petition is adopted or not, the recent changes to Department of Education policy will certainly provide significant relief to a lot of student loan borrowers who could use the help.