After the many pandemic pauses, student loan borrowers have begun accruing interest on September 1, 2023. In addition to interest restarting, payments will start once again for borrowers on October 1, 2023.
Due to continuously high inflation costs, it’s understandable why many borrowers are concerned about these payments, especially if you’re on a fixed income due to Social Security Disability benefits. Luckily, it’s entirely possible to have either a reduced amount or have your loans forgiven completely.
Do I have to pay back my student loan if I am on disability?
The answer to this question can be no depending on the circumstances. There are options to help ease this financial burden, especially if you’re facing total and permanent disability. Two key programs to explore in this situation involve Total and Permanent Disability Student Loan Forgiveness and VA Disability Student Loan Forgiveness.
Total and Permanent Disability Student Loan Forgiveness
If you have a very serious and long-lasting medical condition that makes it impossible for you to work, you might not have to pay back your student loans. This special program is mainly for government student loans, not private ones.
Here’s how it usually goes: You apply for this program, and they look at your medical condition through the Social Security Administration (SSA). If they agree that you’re eligible, they’ll cancel your student loans, so you don’t have to pay them anymore. Filling out the application correctly and giving the Social Security Administration the medical papers they need is the key to getting approved.
Unfortunately, filing this application alone can drastically decrease your chances of being approved for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits. Not all disabilities that are approved for benefits are eligible through this program, so it’s essential to check in with an attorney before you apply for any discharges of your federal student loans.
VA Disability Student Loan Forgiveness
For veterans who get disability benefits from the Department of Veterans Affairs (VA), there’s a different choice called VA Disability Student Loan Forgiveness. This program is meant to help veterans who might have money problems because of their disabilities, like paying back their student loans.
If you can use VA Disability Student Loan Forgiveness, it could cancel your government student loans. To do this, you need to apply through the VA and give them some papers that show you’re eligible.
So, if you’re getting Social Security disability benefits because of a medical problem or you’re a veteran with disability benefits from the VA, you have a chance to maybe not have to pay your student loans anymore. Just make sure to check out these programs and be careful when you apply. These programs are made to help people who have money troubles because of their disabilities.
If I am denied the Total and Permanent Disability Student Loan Forgiveness and VA Disability Student Loan Forgiveness programs, what can I do about my student loans?
If you apply for total and permanent disability student loan forgiveness or VA disability student loan forgiveness and are denied, there are still options available to manage your student loans. President Joe Biden introduced a 12-month grace period when payments begin, to assist borrowers who might find it challenging to make payments once they restart. You can make payments if you can afford them, but if you can’t, you won’t be in danger of defaulting on your loans, and it won’t harm your credit score.
This grace period can provide temporary relief while you explore other options, such as income-driven repayment plans or loan consolidation, to make your student loan payments more manageable.
Will I have to start repaying my student loans while I await approval for my Social Security disability benefits?
No, you typically won’t have to start repaying your student loans while you’re in the process of applying for Social Security disability benefits.
During this time, your loans are often placed on hold, and you won’t be required to make payments. It’s vital to communicate with your loan servicer and inform them of your situation. This will at least guarantee this temporary relief is applied correctly.
It’s also wise to consult with your social security disability lawyer, who can make sure you’re not faced with this financial burden during the application or appeals process.
If you or a loved one needs help applying for Social Security disability benefits, then contact Jeffrey A. Rabin & Associates today.
