Disability and Student Loan Debt

By Michelle Shvarts
Principal Attorney

Education is often considered a pathway to a brighter future, but for individuals with permanent disabilities, the burden of student loan debt can be particularly challenging. Individuals with permanent disability, however, may be eligible for federal student loan forgiveness. In this article, we’ll explore what that looks like and the impact (or lack thereof) on one’s SSD benefits

Understanding Disability Benefits and Student Loan Debt

The U.S. federal government offers loan forgiveness programs to alleviate the financial burden student loan debt can have on those who are permanently disabled. The interplay between federal student loan forgiveness and Social Security disability benefits, however, can be complex. It’s important to understand this interconnection and its effects.

One such loan forgiveness program is the Total and Permanent Disability (TPD) Discharge, which is aimed at providing financial relief to individuals who are unable to work due to their disabilities. To qualify for TPD Discharge, individuals must meet specific criteria, including being unable to engage in substantial gainful activity due to a medically determinable physical or mental impairment expected to last for a continuous period of at least five years or result in death.

TPD Discharge does not count as income for Social Security Disability purposes. Therefore, the forgiven loan amount will not affect an individual’s eligibility for or the amount of Social Security Disability benefits they receive. Under TPD Discharge, disabled individuals receive their full Social Security Disability benefits without reduction due to student loan obligations. The elimination of student loan payments through TPD Discharge can improve the stability of disabled individuals. Without the burden of student loan debt, beneficiaries can allocate their resources to meet other essential needs.

Federal student loan forgiveness not only relieves financial burdens but also encourages individuals with permanent disabilities to pursue education and employment opportunities. This is a positive step toward promoting economic independence and self-sufficiency for disabled individuals. Meeting the eligibility criteria for TPD Discharge can, however, be a lengthy and complex process. Documentation from medical professionals is essential, and not all disabled individuals may meet the strict criteria for loan forgiveness.

Furthermore, in certain cases, forgiven student loans may be considered taxable income. Individuals should consult with a tax professional to understand their specific implications. Additionally, disabled individuals must continue to monitor their eligibility for Social Security disability benefits and TPD Discharge. Any changes in their medical condition or employment status may affect their eligibility.

Los Angeles Social Security Disability Attorney

Federal student loan forgiveness programs, such as the Total and Permanent Disability Discharge, provide a lifeline for individuals with permanent disabilities. These programs help alleviate financial burdens and improve the financial stability of disabled individuals, without negatively impacting their Social Security disability benefits. Disabled individuals and their families need to be informed about these programs and explore the possibilities for relief from student loan debt. For more information on Social Security disability benefits and other student loan forgiveness programs, reach out to the knowledgeable team at Disability Advocates. Contact us today.

About the Author
Ms. Shvarts is the managing attorney for Disability Advocates Group. She opened Disability Advocates Group to assist individuals who became disabled and unable to work to obtain the benefits they need and deserve.  Ms. Shvarts and the rest of the team at Disability Advocates Group are dedicated to assisting individuals obtain Social Security Disability Benefits (SSDI) and Supplemental Security Income (SSI) benefits.