I have $80,000 in student loan debt, and I am disabled and unemployed. How do I pay down this debt or get it discharged? (via MarketWatch Picks)
Question: “I have over $80,000 in loan debt from getting my bachelor’s and master’s. Now I am disabled and unable to use my degrees. My current loans are on hold, but I currently don’t have an income due to unemployment. Any advice would be greatly appreciated.Answer: Student loans ideally help lead to work which, in turn, adds up to income to pay back the advance. A disability because of illness or an accident making it impossible to work upends the equation.
Fiscal gurus agree that in your case, there are two main variables in play: What’s your loan type and how severe is your disability . “Being unable to use your degrees and being unable to ever work again are two different issues,” says financial and debt resolution attorney Leslie Tayne, founder and managing director of Tayne Law Group. Either way, take action. With student loan repayment resuming in May 2022, there’s some urgency afoot.
But a heads up: Discharge approval isn’t the end of the story. “There is the possibility of a three-year post-discharge monitoring period during which earned income must be less than 100% of the poverty line for a family of two,” says Kantrowitz. If you don’t meet the requirements to be eligible to TPD, consider enrolling inan income-driven repayment plan that allows you to set your monthly federal student loan payment to an amount that you can afford based on your earned income. That would keep your monthly payments at $0 as long as you have no income. “This would give you a sort of a temporary respite to make sure that your loans stay current,” says Pentis. “You avoid delinquency and all the negative effects of that.” StudentAid.
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