If You're Awarded Social Security Disability Benefits, Do You Still Have to Pay Federal Student Loans?

Federal student loans are pretty much bulletproof.  Even if you file for bankruptcy, while they are categorized as unsecured nonpriority debts they are still for the most part non-dischargeable along the lines of unsecured priority debts.  So you are pretty much stuck with them -- for life!

SSA disability benefits are pretty much bulletproof as well, in the sense that they can’t be garnished for civil judgments like a paycheck might be.

Disability Insurance Benefits can however be dunned by the federal government for items such as back taxes, child support arrearage and  the topic of this blog post:  federal student loans.

Supplemental Security Income cannot, thank goodness.

Now then, while your student loans are not automatically forgiven when the SSA finds you to be disabled, hence the possibility of garnishment, it is however the first step in the process of getting them forgiven.

If the federal government determines that an individual is, in its words, “Totally and Permanently Disabled (TPB),” it may then forgive their student loans.  34 CFR 685.213.

There are a variety of ways an individual may be found TPD, but for our purposes it can be determined when an individual receives a “SSA notice of award for Social Security Disability Insurance … or Supplemental Security Income….”  34 CFR 685.102(b)(2)(ii).

Of course there will be paperwork to complete and discussions to be had before the federal student loan may be forgiven, but you are on the way with a favorable decision from the SSA on your disability application.

If you don’t initiate the process, you may look at being garnished 15% of whatever monthly monetary benefits you receive over $750, which can be quite painful when you are living on a fixed income, so it is well worth the time and effort to complete the process.

If you or your child have been denied disability benefits or suffer from a severe impairment that is expected to last more than twelve months and that prevents you from doing any of your past or other work or is causing developmental delay, please contact our office nearest to you to set up a free consultation appointment to discuss your situation.