How SSDI and Student Loans Impact Each Other
If you have both student loans and disability, you may wonder whether one will affect the other. As a Memphis SSDI lawyer who also helps people with debt they can’t pay, I’ve seen it all.
So here are some of the most frequently asked questions about student loans and disability benefits through SSDI.
Are Student Loans Forgiven If You’re on SSDI?
In most cases, the answer is no. SSDI is just supplementary income if a worker becomes disabled, so it doesn’t impact your prior debt. Whatever you owed before, you will still owe even if you receive SSDI.
However, there are some exceptions to this and some ways to get rid of debt that we’ll discuss below.
Who Is Eligible for a Total and Permanent Disability (TPD) Discharge?
The government does allow for some people to discharge their student loans if they experience a total and permanent disability. This prevents people from owing student loans when a catastrophic injury or illness prevents them from ever working again.
You have to apply for this special designation through the Department of Education. In the application, you make the case for how and why you are totally and permanently disabled, as the name implies. Then, if you’re approved, the government automatically discharges (forgives) your student loan debt.
This process is totally separate from applying for SSDI benefits. With SSDI, you need to have worked and paid into the system to get benefits, and you apply through the SSA.
Can Private Student Loans Be Forgiven If You’re Permanently Disabled?
Typically, private loan companies are stricter about full repayment and offer fewer income-based options than the federal government.
However, with a permanent disability, many private loan companies will make exceptions. These exceptions are at the whim of the company, so you have to request it and make your case directly to them. Some may be willing to work with you, if you can prove your claim.
Can Parent PLUS Loans Be Forgiven Because of Disabilities?
In my work as a bankruptcy attorney, I’ve seen hundreds of parents impacted by their children’s student loans. And no matter whether you were the student or your child, it’s incredibly tough to reach your golden years and still struggle with education debt. And it’s even harder if you have a disability.
If you’re responsible for paying the loan, it’s your disability that will impact whether you can be forgiven. So just like a younger person would apply for TPD Discharge, you can apply the same way.
In addition, there are other ways you might be able to deal with the debt, which we address in the last question below.
Will Having Student Loans Affect My Ability to Receive SSDI?
Having student loans shouldn’t directly affect your eligibility for disability benefits. The SSA doesn’t look at your financial situation or outstanding debts when determining eligibility.
Instead, the SSA considers your work history and the severity of your disability. Our free reports can help you understand the SSDI application process and what it takes to get approved.
How Can An Attorney Help with Student Loans and Disability?
In my work as a bankruptcy lawyer, I’ve seen a lot of people in debt because of student loans. Unfortunately, you can’t use bankruptcy to get out of student loans altogether – but, depending on your situation, there are ways bankruptcy can help tremendously.
For example, through Chapter 13 bankruptcy, you create a repayment plan that consolidates all your debts – including student loans – into manageable monthly payments.
This allows you to catch up on missed payments, get out of other debt, and avoid the immediate consequences of default. While in this payment plan, lenders can’t garnish your wages or come after you in other ways. Additionally, interest usually doesn’t accrue during this period. The process offers real protection.
In addition, a good SSDI attorney can help you get the benefits you need to help you cover your student loan expenses. Because we handle both areas of practice, we’re well-equipped to answer questions about both and help you decide how to proceed.
If you’d like to learn more about what bankruptcy can do for you, or if you need help with your SSDI application or appeal, contact us today. We offer a free consultation and would be happy to answer your questions, no strings attached.