Does being on disability get me out of paying student loans?

Updated By , Attorney

Question

I have severe back problems and was recently granted Social Security disability benefits. I heard that I can also get rid of my student loan debt. Is that true? I have both federal and private student loans.

Answer

While most federal student loans are eligible to be discharged on account of disability, your private loans might not be.

Discharging Federal Student Loans

For those who are disabled and meet specific qualifications, the federal student loan program has what's called a "total and permanent disability" (TPD) discharge. Generally, those who are granted a discharge get their loans canceled permanently.

A TDP discharge is eligible for loans from the Federal Direct Loan Program, Perkins Loans, and the Federal Family Education Loan (FFEL) Program. Additionally, service obligations for the Teacher Education Assistance for College and Higher Education (TEACH) grant program can be canceled. (TPD discharges are also available, and are automatic, for permanently disabled veterans.)

Note that the fact that the Social Security Administration has already recognized that you're unable to work doesn't guarantee that the Department of Education will forgive your loan; the TPD discharge requirements can be harder to meet then Social Security's. To apply for a TPD discharge, go to disabilitydischarge.com.

Discharging Private Student Loans

Private student loan lenders don't cancel loans very often. Though, sometimes when a borrower becomes permanently disabled, the lender might agree to discharge the debt. To find out about cancellation options, contact the servicer to determine if the lender has a disability cancellation policy. (To learn about other options for private student loans, see Repayment Options for Private Student Loans.)

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