Disabilities Qualify for Student Loan Forgiveness

Jan 03, 2023 By Susan Kelly

Borrowers of federal student loans may be eligible for loan forgiveness if they are diagnosed with a severe mental or physical impairment that is permanent and precludes them from participating in significant gainful activity. A medical practitioner, the Social Security Administration (SSA), or the Veterans Affairs (VA) may all serve as credible sources for disability documentation.

What disabilities qualify for student loan forgiveness? Those who have been diagnosed with the condition that prohibits them from returning to the workforce permanently may be eligible to have their outstanding student loan debt canceled. The Department of Education will accept medical documentation, documentation from the Social Security Administration, or documentation from the Department of Veterans Affairs as evidence of a disability. Some private lenders may use the same information.

Borrower Defense to Repayment

According to a federal statute known as borrower defense, students who attended a school that participated in dishonest or unlawful operations, or one that abruptly shuttered its doors, were eligible for some or all of their federal student loans to be discharged. The Obama administration, which aimed to safeguard student borrowers from misleading student loan schemes, was the impetus for the beginning of this relief. This safeguard for consumers assisted student loan debtors who were promised gainful employment after attending an institution that abruptly closed down.

Complete and Total Disability

Biden not only extended relief for these borrowers who had been cheated, but he also awarded assistance to students who were completely disabled. These pupils with impairments have been obliged by the federal government to submit paperwork throughout the monitoring period of three years for quite some time. Many students could not keep their loan discharge status because the required paperwork needed to be submitted.

Biden has now removed the need for these students to verify their yearly earnings and permitted them to avoid filing. The provision of the documents was much more challenging because of the covid epidemic and the presence of impairments. The students who had their status revoked owing to a lack of filing have now had it restored by the federal government. They have been reinstated to good standing with the discharged loan program as of this moment.

Which Kinds of Disabilities Make Me Eligible for Student Loan Forgiveness?

You can demonstrate that you meet the requirements for a total and permanent disability discharge by submitting proof from one of the following three sources:

  • Social Security Administration (SSA)
  • U.S. Department of Veterans Affairs (VA)
  • A physician

A set of standards must be met before you can submit any form of supporting evidence to demonstrate that you are eligible. Your doctor has to be a licensed M.D. or D.O. in the United States for you to be eligible for a physician discharge of student debts. Medical certificates showing that you cannot do any "substantial gainful activity" because of a physical or mental handicap meeting one of the following criteria must be submitted with the TPD release application:

  • May reasonably be anticipated to kill the victim
  • Has been going on for a minimum of 60 months
  • Has a lifespan of at least 60 months if used regularly

The Future is Bright

Nearly 115,000 people who owe money on student loans have already benefited from Biden's decision to forgive a total of $2.3 billion in student loan debt. On the other hand, this represents a negligible portion of one percent of the total outstanding student loan debt in the United States. As a student borrower, it will likely become easier for you to file a lawsuit for damages against your student loan service provider or lender or, at least, to win a bankruptcy action against them. "Student loan servicers also likely face more scrutiny under the Biden administration," as reported by Forbes. A recent ruling by a federal court determined that Navient, the company responsible for servicing student loans totaling $300 billion, had deceived student loan borrowers.

Further debt cancellation is likely on the horizon for those who have borrowed loans from the government or commercial lenders to pay off their student loans. A stimulus plan for 2021 already exists, providing that no taxes would be levied on any forgiven student debt until 2025. However, if you are not one of the fortunate people who have been handed a zero balance up to this point, the more good news is on the horizon for you. A growing number of individuals are realizing that student borrowers are not only to blame for the high amount of student debt in our nation.

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