Woohoo My Student Loans Were Officially Discharged!

[Deleted member 1860]

I got my final discharge letter in the mail and I have successfully completed my 3 year monitoring period for the discharge of my federal (US) student loans, so now they are all officially GONE! You have NO idea how relieved I am! It was a nightmare to apply and go through the application process, but in the end, it is worth it. (The alternative was to let the debt pile up and have my credit pretty much ruined for life as everyone knows that these loans can't be gotten rid of through bankruptcy.)

WOOHOO!

 

[Chosen]

Wow! How were you even able to do that? I thought only teachers and public servants could get rid of them after 10 years of making payments!

 

[ihateusernames]

That is great! Yes, please share! I'm working on the public servant part, just haven't gotten a job yet. lol

I can imagine the relief. I can't imagine how they ever expected us to get jobs that would actually pay for themselves...

 

[DharmaGirl]

If you are completely and permanently disabled, such as being on Social Security Disability, and won't be reviewed for 5 to 7 years, you can apply for a dispersant. Just go to the student loan website and search dispersement and it will walk you through it.

 

[Deleted member 1860]

I'm not sure how it works now as I fall under the rules of discharge that were in place almost 4 years ago when I first applied. Back then, you needed to be unable to work and unable to work for at least so many years into the future (I think it was 3, or maybe it was 5?) in order to qualify as "totally and permanently disabled". The old definition of "totally and permanently disabled" required a doctor to say that you would never heal and never be able to work again for the rest of your life, but I think they realized that this requirement was too restrictive as many doctors don't feel comfortable making a projection about someone's abilities for the rest of their life, especially if they are fairly young. So, they reduced it to a certain number of years. I know when I applied, there wasn't any requirement for being approved by Social Security or falling under the 5-7 year review category, but I was told that those who are most likely to be approved do indeed meet these parameters. (I am in the 5-7 year review category.)

I know there are a number of sites where you can find out about the different types of discharge for loans. Last time I checked, the two categories were for those who are totally and permanently disabled and those who are teachers and such (in certain types of teaching) can apply for the discharge.

The disability discharge process is a bear to go through, but in the end worth it.

 

[DharmaGirl]

I know you can also get your doc to say that you are disabled, but if you are on SSDI, and aren't going to be reviewed for 5-7 years, it is a piece of cake. My was done in such a short amount of time I was shocked. I was just adding to your info since I just went through the process myself.

 

[Deleted member 1860]

Maybe things have changed? It definitely wasn't a piece of cake for me. It was one of the most stressful things for both me and my family.

Oh, but fyi for anyone with assets > loan discharge amount.......the tax man will want his cut as discharged debt is indeed taxable. I was thankful insolvent.

Eta

Or maybe it is assets > tax amount? I can't remember as I filled out my tax forms a few years ago.

 

[Fembot]

Forgiven debt is usually imputed income for which you may receive a tax reporting form at year's end. As for bankruptcy, while rare, school loans can be discharged through same (noting differential between government and personal school loans), but it is a very HARD process (the more you owe, the harder it is... so those with advanced degrees take heed) and you must be permanently disabled with the inability to do ANY substantive work to support yourself.

 

[Fembot]

I would have said congratulations, but it is kind of a double edged sword as I am sure you would much rather not have the PTSD, hold a job and pay your loans.

 

[shewtinstar]

If you are completely and permanently disabled, such as being on Social Security Disability, and won'...

They have a 3 year monitoring period where you have to submit proof of any earned income for those three years. I am now in my second year of monitoring and it is borderline harassment. I get a letter stating I can use my Social Security report for the year of 2015 as proof...I send that in but they won't accept it....they want specific dates. I send in invoices that I have...I do not have pay stubs because I am an independent contractor...they won't accept them. Then they tell me they do accept my SS report but I need proof of income from 01/01/2016 thru 02/25/2016. I sent that in...not acceptable. I called yesterday and was told I need to submit a sworn signed statement...which I already did. Four times I sent in requested information...four times I called and each time spoke to a different person who gives me different information and different requests. The stress they are causing me is putting my blood pressure through the roof. My suggestion is document everything...every phone call, when, what time, who you spoke with. Every letter they send you...everything you send them, make copies, date them, and keep with your records. I swear they are doing this to make sure I don't pass the requirements for the full discharge.

 

[DharmaGirl]

Wow! All I've ever done is sent in my form saying I didn't work, because I don't work.

 

[DharmaGirl]

I was too poor to have to pay taxes. It was such an easy process for me. I'm sorry it is hard for some folks.