If you are receiving Social Security Disability benefits because you are permanently disabled, and you have outstanding federal student loan debt that you are unable to pay due to your inability to work, you might be in luck!
In April 2016, the U.S. Department of Education (DOE) announced a process to "identify and assist federal student loan borrowers with disabilities who may be eligible for Total and Permanent Disability (TPD) loan discharge."
Federal Student Loan Forgiveness for the Permanently Disabled
The DOE is in the process of proactively identifying and engaging borrowers who may be eligible for TPD loan discharge, in its effort to ensure that these borrowers have the information needed to take full advantage of the debt relief they may be entitled to. According to a DOE press release, dated April 12, 2016:
"In 2012, the Administration took steps to streamline the process to allow for Americans who are totally and permanently disabled to use their Social Security designation to apply to have their loans discharged. But too many eligible borrowers were falling through the cracks, unaware they were eligible for relief. Borrowers like one such woman whose side effects from her breast cancer treatment left her totally and permanently disabled. After repeated attempts, she finally received a disability discharge-seven years after her first application," said U.S. Education Under Secretary Ted Mitchell. "Under the new process, we will notify potentially eligible borrowers about the benefit and guide them through steps needed to discharge their loans, helping thousands of borrowers. Americans with disabilities have a right to student loan relief. And we need to make it easier, not harder, for them to receive the benefits they are due."
How Will You Know If Your Student Loans Are Forgiven?
The DOE is working with the Social Security Administration to identify federal student loan borrowers who also receive disability payments and have the specific designation of "Medical Improvement Not Expected" (MINE).
Those borrowers identified as MINE will receive a customized letter explaining eligibility for loan forgiveness and outlining the simple 3-step process to receive a loan discharge.
Streamlined Application Process
Those identified through the data match will not be required to submit documentation of their eligibility. Instead, they are eligible for a streamlined process by which they simply sign and return a completed application.
Initial Notification Letters Already Mailed
The DOE is mailing initial notification letters over a 16-week period beginning April 18, 2016. If the DOE does not receive a signed application within 120 days, it will send out another letter.
If you are considered permanently and totally disabled (MINE), and have outstanding federal student loans, look for your letter from the DOE in the mail.