Many of our clients are interested in receiving federal student loan forgiveness based on their disability. It is not only our younger clients who are interested in loan forgiveness. Following the 2008 financial crisis, many people went back to school to retrain. One way that older people continue to feel the impact of that crisis is in the form of student debt. Presently, 17 percent of outstanding student loan debt is held by borrowers 50 and older.
Two ways to qualify for disability-based student loan forgiveness
Because of a recent change in the law, disabled people have a means to get their federal student loans forgiven. In 2012, the federal government changed the regulations that govern the forgiveness of federal student loans.[1] Under the new regulations, recipients of federal student loans can qualify for forgiveness because of a disability in two ways. A person can qualify by showing that he or she:
- Is unable to work for pay or profit in a task that involves significant physical or mental activities because of an impairment that has lasted or is expected to last 60 months or more or is expected to result in death; or
- Has been determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected disability.[2]
A disability lasting five years is required for many people to qualify for disability-based student loan forgiveness
Most of our clients fall into the first category, which requires a disability lasting 60 months, so let’s look at that more closely. What does it mean to be unable to work for pay or profit in a task that involves significant physical or mental activities because of an impairment? If you receive social security disability benefits, you meet that standard.
The more difficult part is showing that your impairment has lasted 60 months or will last for 60 months into the future. Often, an award of disability alone is not enough. That is because federal law requires that, at the time someone is awarded disability, the government set a date in the future to review their case. The date for your review is found in your Notice of Award. Almost always, that date is less than 60 months in the future.[3] Consequently, an award of Social Security disability is rarely enough, in itself, to meet the standard for loan forgiveness.
That being said, there is one way in which an award of Social Security disability alone is enough to get your student loans forgiven. An award social security disability alone is enough if the award states that case will not be reviewed for five years or more. This is fairly rare, as we typically see timelines for review between 1.5 and three years.
When your social security award is not enough in itself to qualify for disability-based student loan forgiveness
What if you are found disabled and your award is not enough, in itself, to qualify for student loan forgiveness? Our clients should not be overly worried, because you can also qualify for forgiveness another way—by getting the right statement from your doctor. In many instances, we have already talked to your doctor as part of our work on your case. Because we have discussed disability with your doctor, it is easy for you follow up.
When you follow up, you should ask your doctor to complete a Physician’s Certification Form stating that your disability has lasted 60 months or will last for 60 months into the future or is expected to result in death. That form is part of a Discharge Application, which is found here.
[1] https://www.gpo.gov/fdsys/pkg/FR-2012-11-01/pdf/2012-26348.pdf
[2] https://www.law.cornell.edu/cfr/text/34/674.51
[3] https://www.ssa.gov/OP_Home/cfr20/416/416-0990.htm