DISABLED? CAN YOU GET FORGIVENESS OF STUDENT LOAN DEBT?

STUDENT LOAN DEBT AND DISABILITY

Student loan debt is almost impossible to pay if you have a disability that keeps you from working. In fact, it is a huge problem to pay any bills when you cannot work due to a severe mental or physical medical condition. Probably, you are going to want to pay your other bills before you pay a student loan bill.

An increasing number of people who receive Social Security benefits also have federal student loan debt. The Government Accountability Office recently released a report indicating that “from 2002 through 2013, the number of individuals whose Social Security benefits were offset to pay student loan debt increased about five-fold from about 31,000 to 155,000.”

Since the report notes that only about 36,000 of those having benefits offset were aged 65 and older, it means many individuals with disabilities are having their benefits garnished for student loan debt. This is happening even though they may be eligible to have their student loan debt forgiven.

Please be aware there may be though tax consequences of discharged debt and you would need to consult an accountant about your particular financial situation.  If you are receiving SSDI or SSI benefits and you think you may qualify for discharge of your debt, then call the SSA to see if you can receive forgiveness.  The SSA’s national number is 1-800-772-1213.

NEW OPTIONS FOR STUDENT LOAN FORGIVENESS

The federal government now offers up to $20,000 in student loan forgiveness. One way to relieve some of the burden is through the Public Service Loan Forgiveness (PSLF) Program. This program lets those with student loan debt who work in public sector jobs, such as government, public education and the police force, have their outstanding loans forgiven. But, only after they have made 10 years’ worth of payments.

Here’s what you need to know to take advantage of public service loan forgiveness.

In order to receive student loan forgiveness, in the past, you had to make 120 payments on time. This means the payment had to have been for the total monthly amount owed and paid within 15 days of the due date. Under new rules dated October 6, 2022, any prior payment made will count as a qualifying payment. It will count regardless of the loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment.

This change will apply to those who have student loans with Direct Loans. It will also apply those who have already consolidated into the Direct Loan Program and those who consolidate into the Direct Loan Program by Oct. 31, 2022.

WHAT STUDENT LOANS QUALIFY FOR FORGIVENESS?

Only federal Direct student loans qualify for forgiveness. However, that doesn’t mean you’re out of luck if you have a Perkins Loan or Federal Family Education Loan (FFEL). You can consolidate your loans into a direct consolidation loan, but you’ll have to weigh the pros and cons of doing that first. To get forgiveness with other types of loans, you must apply for consolidation into a Direct Loan by October 31, 2022. Use the PSLF Help Tool to help with the PSLF form and submission process.

Since PSLF is designed to encourage people to explore public service careers, you must work for employers that fit that criteria while making those 120 payments. For example, you should be fine if you work for a federal, state or local government agency. A nonprofit organization also counts.

However, to be on the safe side, fill out an Employment Certification Form each year or at least whenever you start working with a new employer. Then send the form to the U.S. Department of Education either through the FedLoan Servicing website or via fax or mail. You’ll be notified if your employer doesn’t fit the criteria for a public service organization.

Additionally, you must also be an employee of the qualified employer. If, for example, you are an independent contractor, then your service does not count. An independent contractor is not an employee. You would know this because you are not on the employer’s payroll. Instead, you receive payment without taxes taken out. You are responsible to pay the taxes. At the end of the year, the employer issues you a 1099, instead of a W2.

THE STUDENT LOAN FORGIVENESS PROCESS

In order to have your student loan debt forgiven, you need to understand the process. Some of the issues that are important are what kind of loan you received when you were a student. For example, did you get a Pell grant? Or did you receive a private student loan?  Other issues are whether or not you need to actually file an application for student loan forgiveness. See below for more information.

HOW MUCH STUDENT LOAN DEBT WILL BE FORGIVEN?

The amount of debt forgiven depends on whether or not you received a Pell Grant. Those that did receive a Pell grant can get up to $20,000 in debt cancellation. Others, who meet the income threshold requirements, will receive $10,000 in debt cancellation.

If your student loan balance is less than the amount you qualify for, you do not get more money. Your relief is capped at the amount of your outstanding debt. For example, if you are eligible for $10,000 in relief but have an $7,000 balance, then you will receive $7,000 in relief.

DO YOU NEED TO APPLY FOR FORGIVENESS?

You might need to apply for student loan forgiveness. Almost 8 million students may have their debt forgiven automatically because the Department of Education already has their income data. Everyone else will need to submit their income information thought an online application that is available through the Department of Education.

Once the application is complete, the student loan debt should be forgiven within four to six weeks.  Make sure you file your application in October or by November 15th. This will give you the best chance of receiving debt relief by January 2023.  Again, loan forgiveness should happen within 4 to 6 weeks. If you are searching for information about the tax consequences of receiving SSD benefits, then read here.

WHAT WE DO TO HELP YOU WIN SSD BENEFITS 

You do not need to try to win SSDI and Supplemental Security Income benefits by yourself. Cannon Disability Law can help file your disability application. Also, we can help you appeal every SSA denial. That way, you can focus on your health. For example, our attorneys and staff can:

• Send you the paperwork you need to become our client
• Help you file your application for SSD and SSI benefits
• Inform the SSA that they should automatically pay your benefits under the Compassionate Allowance Rules
• Request reconsideration if you receive an initial denial from Disability Determination Services
• Help you confirm your attendance at a Consultative Examination
• Request a Hearing with an Administrative Law Judge (ALJ)
• Prepare you to be a good witness at your SSA hearing
• Represent you at your hearing and question the vocational and medical witnesses
• Read more about vocational experts here
• Learn more about medical expert testimony here
• Request review of an unfavorable decision with the Appeals Council
• Request review of an Appeals Council denial in Federal Court

If you file your application for benefits online at Social Security’s website, then you have 6 months to complete the application. Once you submit your application online, the SSA sends you an application summary in the mail. You must sign it and mail it back.

Additionally, once you receive a denial, you have 60 days to file an appeal. You must also meet the time limit set by the SSA. If you do not, then you will have to start the process over again. That means you will lose any benefits you could receive on any prior application.

CANNON DISABILITY LAW CAN HELP YOU WIN BENEFITS

At Cannon Disability Law, we have 30 years of experience helping our clients in court. We have won over $100 million in SSDI and SSI benefits for our clients. We can help you too. Don’t go to court without an excellent lawyer. Your future income, for yourself and your family, is at stake.

You need to hire a firm that is on your side and can help you win the benefits that you deserve. Also, we can help you file your application for benefits at Social Security’s website. If you have concerns about the cost of an attorney and attorneys fees, then read here for more information. We work for free until you win benefits.

If you are unable to call, you can also contact us using the contact page on this website. We represent clients in Utah, Nevada, Idaho and California. Utah disability benefits information can be found here. Nevada benefits information is here. Additionally, Idaho SSD benefit information can be read here. Likewise, information about California SSD benefits is here. If you need help, contact Cannon Disability Law today.

Our law firm offers a free review of your SSDI and SSI case. However, we don’t take the case of every person who calls our office. We only accept the cases we believe in. That means you must have a severe mental or physical condition that prevents them from working. Additionally, you must be getting medical treatment. You can call us for free. We can often tell you over the phone if we can help you win your benefits. Call and ask us questions about your student loan. Hire us to be your legal team.