When you take a student loan for your degree programs, you hope to find a well-paid job and pay your debts back. However, unfortunately, life is not going like straight; there so many ups and downs. Have you ever thought that if you get some serious illnesses or have an accident which makes you unable to work? No? Then, you are in the right place. Federal Student Loan Disability Discharge program is the best alternative which allows you to receive student loan forgiveness for your debts in case if you are unable to work and make repayment on your student loans. If you get sick or lose your physical ability to work, through the Federal Student Loan Disability Discharge program, you can easily wipe out your outstanding student loans. In this article, we will guide you on how to apply, and we will give some tricks to get approved of your application.
Who qualifies for the Discharge?
This program works in a simple way. First of all, when you file an application for student loan forgiveness via Student Loan Disability Discharge, you may be required to make payments on your debts. Then, the US Department of Education contacts to your loan collection agency to stop collecting process. It means that temporarily you are free from making payments during the investigation procedures.
By depending on specific reasons, the investigation process can take three to five months. If you get approved by the Department of Education for Federal Student Loan Disability Discharge program, your student loans will be automatically canceled. Even you will get some certain refunds for the amount you have already paid on your student debts; Otherwise, if you get denied, you will receive an official letter that explains the reasons of your rejection. After that, your loan collection agency will continue to take payments from you.
It worth to notify that, this program is only eligible for federal loans which consist of the following types.
- Federal Perkins Loan Program
- Williams D.Ford Federal Direct Loan
- Federal Family Education Loan (EFEL)
Additionally, if you have TEACH Grant service obligation, you can get relief for it by applying for a program. All you are going to need is officially prove your disability to show you deserve student loans discharge.
How to prove my disability to the Education Department?
The first and vital requirement to get student loan forgiveness (and reimbursement if it is possible) through the program, is that you have to prove your permanent disability and you are unable to work. Generally, it is possible in the following ways:
US Department of Veterans Affairs is the first option for you to prove that you are disabled. You are going to need all sorts of Veterans Affair documentation. And they should officially confirm that you can not work because of physical or mental disability that is linked to your soldiery service.
Submitting the required documentation from the Social Security office is another option you can apply. It is a smart way to show the US Department of Education that you are disabled and qualify for Federal Student Loan Disability Discharge program. If you have Social Security Disability Insurance or you are receiving the Supplemental Security Income, it will help you a lot. All you need is just calling the Social Security office and require the copy of the notice of award about the SSDI or SSI benefits you are receiving. These documents have to state that your disability status will be reviewed during the next five to seven years after the date which you have got the last SSA disability determination.
If you think you do not cover any of these conditions above, then you have one more alternative. All you are going to need is to find a physician to get verification. This verification must certify that you do not have the physical ability to work. Also, your physician has to affirm that you have medically noticeable physical or mental distortion which makes you permanently disabled.
Final a the easiest way to be eligible for Federal Student Loan Disability Discharge program is just waiting. Yes, you have heard it right. Because the former President Obama has made a move in the monitoring of Student Aid Bill of Rights. And according to this move, the US Department of Education has sent up to 400000 students a letter who they are considered as eligible for the program. All you need is to wait to accept the mail or if you have already received it, then sign it out and send to the Education Department back. Thanks to Obama to allow you benefit of Federal Student Loan Disability Discharge to eliminate your student loans.
How to apply TPD?
Haven’t you received a letter from the Department of Education, yet? But, if you think that you cover any of the eligibility requirements for discharge, then you can apply it yourself. You can fill out the application file for the forgiveness program in two ways. First, you can fill an online questionnaire which is only cover some part of your total application. Then you will print the full form, fill it out by hand, sign and send to the address of Department of Education (U.S. Department of Education/P.O. Box 87130/Lincoln, NE 68501-7130). After you send application form of Federal Student Loan Disability Discharge program, the Education Department will review and within 30 days will reply you request. By the way, it worth to notice that during the reviewing and investigation process, you are not required to make a payment on your student loan.
Should I pay tax on student loan disability discharge?
Unfortunately, yes. Despite, maybe it plays as a lifesaver role for people who are unable to make a payment on their loans, but the program has some downsides. The bad news is student loan disability charge is required to be taxed. It is because any amount of forgiveness you receive or some refunds are considered your taxable income.
That is why, we recommend that before you apply for the discharge program, it would be better you talk to tax professional or tax consultant. Whenever you think that tax rates are too high in comparison with the amount of forgiveness you are going to receive, it is better to check out the income-driven repayment plan. This option allows you to adjust your payments with your income, especially if you are in a situation with making repayments on your student loans.
Of course, we confess that struggling with student loans with a long-term disability is making a lot of troubles. However, you can take the advantages of the discharge program to weaken burden. Before applying for Federal Student Loan Disability Discharge program, make sure about eligibility requirements. And also, keep in mind to be prepared and planned for dealing with tax issues. If you need any information about student loan forgiveness and discharge programs, please, do not hesitate to call our helpline. It would be a great pleasure for us helping you to handle your burden.