While under President Obama Student Loan Forgiveness has been streamlined, though it is still not an easy process to navigate. The paperwork to have one or more Federal Student Loans discharged is time consuming and if you apply for a Total and Permanent Disability Loan Forgiveness, it will require your personal physician to sign off on the paperwork. If you are a veteran and apply due to a service related disability, there are additional standards to be met and a doctor affiliated with the U.S. Department of Veterans Affairs (VA) must sign off on your application. Student Debt Relief can help you get started and work with you at every step until your discharge has been completed and approved.
Let’s begin with the basic information. To have a Federal Student Loan forgiven or discharged, the applicant must meet the definition of a Total and Permanent Disability. This means being unable to perform gainful, substantial employment due to a mental or physical impairment that has, or will run for 60 continuous months. Alternatively, if the physical condition could result in death, then it also meets the definition of a Total and Permanent Disability.
If this condition was present at the time the student loan was processed, the loan will only be discharged if the condition has worsened.. In order to qualify for a loan discharge, the pre-existing condition must have advanced to the point where the applicant is now permanently disabled
Total and Permanent Disability Discharge on student loans applies to Federal Family Education Loan Program (FFEL), the Federal Perkins Loan, Teacher Education Assistance for College and Higher Education Grant Program and the William D. Ford Federal Direct Loan Program. It is used for non-veterans and veterans alike.
If the loan is in default already and has been transferred to a collection agency, it can still be forgiven. A collection agency will not be interested in helping to accomplish this, as they make their fees only on the loans they collect. Remember that neither the loan provider nor the collection agency can legally refuse to provide a copy of the Discharge Application. Your loan can also be consolidated into the direct loan income base repayment programs available, which would remove your loans from being in the default status (as long as you have not had certain actions taken against you such as a wage garnishment). Once that is completed, then you can apply for the Total and Permanent Disability Discharge on your student loans.
For Veterans, the process is required, but not all of the form is completed and a VA Rating Decision must be accompany the signed form. To qualify under the VA rules, an applicant must be rated as 100% disabled due to either service related conditions or based on Individual Unemployability. With this rating, a Veteran is not required to have their personal physician complete part of the application. Only Sections 1 and 3 are required.
Some VA physicians have refused to sign the Discharge Application in recent years, claiming that VA policy prevents them from doing so. If this happens, the applicant should remind the physician of the October 29, 2008 VA Health Directive that changed VA regulations, allowing them to now sign the application.
Once the Discharge Application form and the VA Rating Decision are completed, you application would be submitted for discharge.. The same rules and recommendations apply for Veteran Disability Applications as with non-Veterans. If the application is rejected, every Veteran can still apply for a Student Loan Discharge using the same non-Veteran criteria as anyone else.
Whether you have Veteran’s status or not, Student Loan Forgiveness is not an easy process to navigate. We suggest taking advantage of the Direct loan income based repayment programs available.