Disability Discharge
Dear Betsy,
I was in a car accident more than a year ago, and I was seriously injured. I have not worked since the accident, and it does not look like I will ever be able to do any meaningful or substantial work for the rest of my life. My student loans have been in forbearance since the accident, but I really don’t think I will ever be in a position to pay them back, as they come in at close to 6 figures. What can I do? Friends are telling me to just let them default, because there’s nothing anybody can do as I have no income. I really don’t think I can handle all the collection calls that will surely come as a result of that though. I have also heard that bankruptcy is not an option. Is there anything I can do?
Sincerely,
Dear Carolynn,
I am so sorry to hear about your accident. That must be very difficult to deal with. If your doctor certifies you as totally and permanently disabled and unable to work and earn money, then you may be able to get your federal student loans discharged. The process takes several years, but during that period no payments will be due. To start the process, contact your student loan holder and ask for a total and permanent disability discharge application. Take the application to your physician to certify. Once it is returned and accepted, you will be placed in an interim status while the U.S. Department of Education reviews your case for eligibility and monitors your income and other items for the next several years. Make sure you stay on top of the paperwork they request or you may have to start the process from the beginning.
Regards,
Betsy
