Student loan total and permanent disability forgiveness

[Suslew]

has anyone ever applied for student loan forgiveness with a total and permanent disability.  I found this option

http://www.disabilitydischarge.com/home/

You have to have your doctor sign that you cannot work due to a total and permanent disability that is expected to last longer than 60 months and fill out a fairly simple form, then send it in to the Dept of Education.  I do know that you're responsible for the tax burden as the forgiven debt is reported as income.   Just curious if anyone has tried this. 

[ellenkerr]

I applied and was given forgiveness but you can not have income over a certain $$ amount.   It took almost a year to be approved, however during this time they deferred payments until I got the decision.  Good luck.

[SjoAmy]

I applied.  The process was not as bad as the stigma I gave myself out of shame.  I was successful with it.  In retrospect, I'd rather have my degree.

[Suslew]

Well, I've applied and it's in progress.  Time will tell.

Apparently, disability payments, SSD or private long-term disability, do not count against income requirements (15,500/yr).  But if dismissed I will be looking at a huge tax bill next year.  So it somewhat feels like I'm trading one problem for another.   . But one step at a time. 

SjoAmy, it sounds like you're being overly hard on yourself...please be gentle and understanding to you .  It's the one thing I've really had to learn. None of us asked for this and all of us would willingly part with Sjogrens's if we could, but we're left dealing with this the best we can. 

Student loans are such a hot button right now and so many people just don't want to give anyone an out, they're akin to having your leg caught in a bear-trap - there is no out, no help.  Some private loan companies don't even offer this option.

Happily, you can always finish up your degree as you're able.  One class at a time if need be.  Or maybe, like in my case, you just wish you could remember your degree!  LOL.  I can't access the vast majority of my training and it really sucks!  Fatigue and brain fog, my constant companions! 

[Suslew]

Well, it showed up on their website as approved today.  If history is any indicator (and isn't it always!), I should get snail mail confirmation in about two weeks.  Goodbye student loans... Hello, tax burden!!!  Happy and Ugggh! 

[slccom]

As I understand it, the IRS does understand that turnips, particularly disabled ones, do not have blood to give. I believe that you'll find that a payment plan can be arranged.

Good luck!
Sharon

[cloveklum]

"has anyone ever applied for student loan forgiveness with a total and permanent disability..."

I haven't applied there yet. But the debt forgiveness will be a great relief to all student with the huge amount of student loan. Most people intend on paying their debts, but the hand of fate can intervene and prevent that from happening. Ever year, lenders write off billions in canceled debts, which can be a tax nightmare for debtors.

[Joe S.]

It may be advantageous to contact an accountant to help you with the tax ramifications.

[quietdynamics]

I was paying on my student loan from day one of grad courses ( so the payments all went to principal).

Later, with all of "this" ...symptoms, Drs, ...being head of household with two minors, payments were not the priority, above rent, food.

I was advised via phone to get a loan deferment. At the time I was having neuro symptoms and could not drive, read, follow long conversation ( which is more evident to me in hindsight, once I had these abilities again).
I told the agent all of the above and that I was determined Disabled and should apply for 
"student loan forgiveness with a total and permanent disability"

I was told not to do that. And continued the deferment, as with all personal and family circumstances, I was overwhelmed. It was not a good time.

That was the WRONG advice in my situation.

So I am posting this as:
- if you are having "brain fog", neuro issues ...have someone help with the decision, process.
- and as far as phone advice, inform the agent you need to have hard copy to review, and just keep repeating that...they are not interested in hearing the  word "disabled".
- if you are overwhelmed by all that is going on ...Drs., stressed, fatigue...just plain sick...do not make a decision.

The person on the phone is an agent, serving the the interest (pun intended) of the bank,lender, not you. 

Which the Old me ...and the more symptom Managed Me "Now" would have known..

[Suslew]

Hi,

Joe, you are right on target.  I do have a tax professional and I've reached out to her. 

Quiet dynamics - I did some deferral because of "this" and now owe and additional $10k in interest which I will have to pay taxes on.  Seems like a raw deal to me.  The application process for this has simplified and is now handled through a government website which is a great improvement over dealing with the lenders directly.  They gave me such problems. 

Sharon - thanks!

By the time I add up all payments I've made, and paid the taxes on the interest they've charged, both during school and after, and during deferrals, I will essentially have have paid the full amount I borrowed, even though the debt is "forgiven"!  Something really needs to be done to limit the amount of repayment to something like 2x what you borrow.  Seems fair to everyone.