Believe it or not the majority of people don’t have any interest in applying for Social Security disability, they would rather work and earn much more money than they would ever receive in Social Security disability payments, but unfortunately applying becomes a necessity of survival for some people.
Most people who end up applying for Social Security disability spent many years in the workforce earning a livable wage, but something occurs along the way where they are unable to maintain gainful employment due to impairments and need Social Security disability to survive. Many people who spent significant time in the workforce earned college degrees or attended college to advance their careers. What happens when the student loan collector comes calling if these people are unable to work and Social Security only pays a fraction of what they earned while working?
Luckily there is the possibility for people to get their student loans discharged through the Total and Permanent Disability (TPD) loan discharge.
As one might expect, getting student loans discharged is not an easy process because most of the time you are talking about thousands of dollars that would be lost if the loan is discharged, but now disabled candidates have the U.S. Department of Education in their corner.
President Barack Obama’s Student Aid Bill of Rights is all about making it easier for borrowers to make payments on their loan by making the process easier and more affordable. For those who are unable to pay their loans because they can’t work due to a disability, Obama’s initiative aims to notify potential disabled Americans who receive Social Security disability that there is an opportunity to get their loans forgiven.
“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,” said U.S. Education Under Secretary Ted Mitchell. “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.”
This initiative under the Obama Administration actually began in 2012, but too many people who would’ve qualified were not taking advantage of the program because they were unaware of it. “Too many people were falling through the cracks,” Mitchell said through a press release from the U.S. Department of Education.
The new process will actually begin April 18 where the U.S. Department of Education will send letters to qualified borrowers informing of steps needed to take to potentially discharge loans.
According to the U.S. Department of Education, approximately 387,000 borrowers were identified who might benefit from the program. Of this group of borrowers, more than 44 percent have defaulted on their school loans.
There remains one drawback to the program, which Obama continues to work at. Right now the amount of loan discharged to those who qualify for the program is still considered taxable income. Unless Congress acts, this will remain the case, but receiving the loan discharge is certainly worth this minor flaw.
To learn more about qualifying for this program, the specifics and way the government will notify potential recipients click here.
