Student Loans and Disability

July 13, 2016

In April 2016, President Obama announced an executive action to identify and notify over 375,000 disability program beneficiaries of their potential eligibility to have outstanding student loan balances discharged on the basis of “total and permanent disability” or TPD. Letters began to go out on April 18, 2016 and will continue to go out on a rolling basis until all individuals identified as potentially eligible are notified. The process for applying for the discharge has been simplified.

The only beneficiaries who will receive notice for the TPD discharge are those who have been deemed “Medical Improvement Not Expected” (MINE).

Under current law, the amount of student loans being discharged are counted as income in the year in which the discharge is granted and reported to the Treasury Department. SSDI benefits can be garnished to pay the taxes on the amount of the loans discharged.

If you are interested in obtaining a discharge of a student loan based on your disability status, call Tracy Miller at 904-981-9812.

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