There are two good options for dealing with federal student loans: Income based repayment and disability discharges.
You do not need to be on disability to do either of these things.
You can even be working and still qualify for both of these programs!
Income Based Repayment
If you have government loans, you can sign up for student loans income-based repayment. I know a lot of people who have done this and it works great! It is easy to sign up for.
If you are not on disability you can still use this and it can work really great for any person who is low-income.
If you are on SSI, you will most likely owe $0 per month. If you are on SSDI, it depends how much income you have, or how much income your spouse has.
Warning: If you enroll in income-based repayment, in 20-25 years your debt will be forgiven and go away! Not as great as it sounds! This can cause tax problems. If you think you will still be alive in 20 years, learn more about how to escape tax problems.
If you have government loans, you can also look into applying for a disability discharge for your loans. You do not need to be approved for Social Security disability to qualify. You need a doctor who is willing to sign a form stating that you are permanently and totally disabled.
I know some people that have done this, and sometimes it works out great, but sometimes it doesn’t! Please be careful and research it first. What to watch out for:
🌻 Not everyone qualifies. It is not enough to be on disability. You must show that you are “totally and permanently disabled.” Most people on Social Security disability do not have this designation. If this is your situation, you will need a doctor who will sign this form for you.
🌻 May cause tax problems. This type of discharge can cause you tax problems.In some situations you can escape these tax problems, and in some situations you can’t! Learn more about how to escape tax problems. Update: New law was passed, if your loans are discharged after 2018, you will not have tax problems.
🌻 Three years probation. Be careful if you think your condition may improve or you may go back to work in the next three years. There is a three-year probationary period.
🌻 Once per lifetime. You can only get a disability discharge once in your life. If you go back to school after your discharge, you cannot get new loans discharged because of disability.
🌻 If you are already disabled you may not be approved. If you are on disability while you are in school, you may or may not be eligible for a disability discharge. We could not find any specific rules addressing this. However, we heard from one reader who applied for a discharge this way, got denied, appealed, and got denied again. The decision was based on the Master Promissory Note, which states that you are eligible for a discharge if you become disabled. Her understanding of the decision was: if you develop a new disability or your condition significantly worsens, you may be granted a discharge, but if your condition is the same as when you were in school, it’s possible the discharge will not be approved.
This information on this page is for federal student loans. If your loans are private, look here: