In the U.S.A., the Education Department offers student loans debt relief programs due to a disability. The disability has to be documented as lasting for an unspecified period of time and as a condition that impairs a person’s ability to work. Loans that are guaranteed by the government qualify for disability discharge or debt relief under these programs. This article presents tips on filing for the discharge of student loans due to a disability and forms to complete the request.
Disability Debt Relief of Students Loans: General Application Process
The student borrower has to qualify as having a permanent disability that doesn’t allow him to work. The condition needs to be diagnosed and documented by a doctor and approved by the Department of Education. After the borrower’s application for debt relief is approved, he is placed on Conditional Disability Discharge status. This status can lasts up to three years. Forms and application can be completed online at edu.gov.
During this time the borrower doesn’t have to pay principal or interest on the loan(s). The conditional disability status can be lifted at the end of three years to be made permanent if the disability continues. For the status to become a permanent disability discharge or debt relief, the borrower must satisfy two conditions:
- Borrower has not obtained new federally guaranteed student loans
- The student/borrower has not worked and earned above the State’s poverty line guidelines.
Discharge of Student Loans Due to Disabilities: Loans that Qualify for Debt Relief
Students’ loans that have been guaranteed by the federal government qualify for the discharge due to disability. Once a student has been determined to have a permanent and total disability, he doesn’t have to repay the principal or interest loan amounts. These are the loans considered under the disability debt relief program:
- FFEL – includes Stafford, Unsubsidized Stafford, Plus and students Consolidation loan.
- Perkins Loans
- Federal Direct Loans
- TEACH – Teachers Education Assistance Grants.
Student Loans Debt Relief for Veterans
Veterans of the Armed Forces are evaluated separately to obtain disability discharge for students’ loans. Veterans have to be evaluated by the Department of Veteran Affairs and deemed disabled or unemployable. The disability has to be related to the service performed as a member of the Armed Forces.
For veterans that provide documentation from the VA certifying them as disabled it is not required to have a doctor to certify this. Once a veteran qualifies for the student loan debt relief he will be permanently discharged. This status doesn’t require the 3-year conditional discharge. Forms for veterans debt discharge can be completed at the Department of Education site.
Related Disability and Money Articles
Grants and Loans for Students on Disability
Loans for People on SSI Disability
Government Small Business Funding
Resources: Public information at the Education Department, edu.gov, current as of August 17, 2010.
Sylvia Cruz - Sylvia holds Bachelor and Master degrees in Business Administration with majors in Finance and Accounting. She is also a CIA - Certified ...
