Student loan relief for SSI/SSDI beneficiaries
Written on Monday, July 28, 2014 at 9:45 am by Taylor Healy in Bread for the City, Client stories, Legal Clinic, Stories
In an exciting new development, the Department of Education changed the policy on discharging student loans. This change could help thousands of people with disabilities. Bread for the City’s attorneys are hoping that with this change in the law we can help our clients get out from under the weight of student loan debt.
Under the new regulation, some SSI/SSDI recipients are now eligible to have their federal student loans fully discharged. Once a person is found to be “disabled” by the Social Security Administration (SSA), SSA decides how often they will review the person’s case based on the severity of their disability. This “continuing disability review” (CDR) schedule can be anywhere from 1 to 7+ years. The change allows SSI/SSDI recipients who have been set on a CDR schedule greater than 5 years to have their federal student loans entirely discharged. Applicants only need to submit a short one-page application and a print-out from SSA showing proof of the CDR schedule.
Already, we have helped three people apply for loan discharge and two have already been approved! These clients are all SSDI beneficiaries who were having 15% of their monthly check garnished by the Department of Education – a huge hardship for anyone, let alone someone on a fixed income who is unable to work.
The loan discharge was a huge relief for someone like Sandra*, who worked in law enforcement for many years before deciding to go back to college to study criminal justice. After graduating from Marymount University, Sandra was diagnosed with breast cancer, unable to work, and owed over $34,000 in federal student loans. She fell into a deep depression, was evicted from her apartment and spent three months living in a public park before getting assistance from a case worker. Two years ago, she started taking medication for her depression and was able to get SSDI with the help of her psychiatrist. Unfortunately, fees and penalties were being added to her debt by the month and the Department of Education was able to garnish $212 per month from her SSDI check to repay the now $45,000 loan.
Within 48 hours of her legal intake at Bread for the City, I had gotten the verification needed from Social Security and submitted her application to the Department of Education. Last week, we received Sandra’s approval letter for discharge of the full loan amount! We celebrated with a huge hug and a whole lot of savings. Not only will Sandra be getting her full SSDI benefits going forward, but she says that just knowing that she’s “debt-free” is going to be an enormous help to her mental health and physical wellness.
If you know someone who receives SSI/SSDI and has federal student loans, tell them to come to legal intake on a Monday from 1-3pm!
*Sandra’s name has been changed to protect client confidentiality.
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