How To Get Rid of Your Student Loans Without Paying or Ruining Your Credit!

The only way I know that you can get rid of student loans is through the process of Permanent Disability Discharge, in which individuals get assistance in paying off the amount of their education loan. However, there is a strict guideline as to who can take advantage of this cancellation.

 

The cancellation can be applied to those who have been deemed permanently and totally disabled only if:

 

  • The injury or illness prohibits the individual from earning a living due to the fact that it can persist indefinitely or result to death
  • A doctor has certified the above scenario and believes his patient is 100% disabled

 

 Conditional Discharge Period

 

In addition to this, the Department of Education requires concerned individuals to go through a conditional discharge period lasting up to three years. During this period, medical professionals will affirm that the patient truly is disabled.

 

The Department of Education will be checking with the IRS to see whether or not the patient has been earning income. Throughout the entirety of the conditional period, the patient needs to be checked regularly by the governing agency so they can affirm that the patient meets the conditions of a disabled individual. The student loan will be put on hold during this time, and the individual does not need to pay the interest or principal of the loan.


 


Passing the Conditional Period

 

At the end of the 3-year period, a decision will be made as to the eligibility of the individual for the cancellation of his student loan. For those who pass the conditional period, the student loan will be cancelled; otherwise the loan will need to be repaid.

 

Who Can Apply for Permanent Disability Discharge?

 

Not everyone can apply for Permanent Disability Discharge on their student loan. The Department of Education has a very strict definition of disability, in the sense that a person who is truly disabled is not able to work or earn money due to his major injury or illness. They even expect that the injury or illness will continue indefinitely or result to the death of the individual involved.

 

See student loans and STD’s have another thing in common.  To get rid or treat either one you will be visiting the doctor a lot!

 

Comments

  1. There are very strict guidelines, there is a conditional 3 year monitering period where you can only have so much income ( like poverty level) and the doctor has to say you will be disabled forever and never work. They will also check after you get the discharge if you are working ( tax returns) . The disability has to be after you get the loans. You cannot get a new loan after the old ones are discharged unless a doctor states you can go to school and then gain employment and then the old loans could be reinstated. It is very hard to be approved and many get turned down, so you really have to be sick and disabled to receive this discharge.

    • URFinanceSimple says:

      You're absolutely right, you really have to be disabled. Ever since they change the bankruptcy rules in 2005. It's damn near impossible to get rid of those student loans.. How do you feel about that? Do you think Student Loans should be bankruptable again? On Fri, Sep 28, 2012 at 7:28 PM, YFS <yourfinancessimplified@gmail.com> wrote: approve

  2. Thomas kilgore says:

    Hey YFS,

    Would this apply to a parent who is permenantly disabled and is a cosigner for my loans? Would I still be held reliable for my loans?

    • URFinanceSimple says:

      The cosigner only comes into play for your student loans when the primary person defaults. So, something will have to happen to the primary debtor first.

  3. The highest student loan default rate is with Technical/Trade College students and the last I heard was total outstanding student debt was approaching $1 Trillion. I worked in the student aid office in college and I can tell you there are many students that are spending loan proceeds on ipods and beer. It's a pretty simple concept: you sign on the dotted line, you get money, you pay back the money!

    • I believe it's a pretty simply concept but people always seems to think it's free money. Those same people then complain about how student loans are ruining their lives. Silliness!

  4. looks like my student loans are never going to get paid..college is just a business to make money from people and are putting people in debt…the only way they are ever getting paid is if i become disabled..lol

    • I agree college is a business, but I don't think it's the colleges fault why the student is in debt. Unless, of course, you're saying you were forced to go to college against your will.

  5. Unfortunately, student loan debt is on the rise and it compromises the finances of the many people. I'm glad there is an option for people that truly need it, but as Darwin said, there will always be those that try to scam the system. I see non handicapped people park in the handicapped spaces all the time, and it infuriates me, but I have never seen anyone get a ticket for it. Why are people so lazy that they can't walk a few extra feet in the parking lot, exercise is good for you!

    • I would say probably the same reason why we have a obesity epidemic in America. Everyone wants to take a short cut rather it be by taking out massive student loans for a worthless degree (not all degrees are worthless but some definitely are) or not walking 2 minutes from a regular parking space. People want what they want now and they don't care how they get!

  6. It's good to know there's a silver lining for those who are truly disabled! I agree that hopefully this program isn't abused by scammers; that's just an incredibly sad thought.

    On an unrelated note, reading Darwin's comment above about handicapped parking spots made me remember a time where I watched a woman blatantly park in a handicapped spot at the local post office–and she wasn't handicapped and didn't have a plate or placard! My big mouth couldn't stand the injustice because the place was packed and I knew she'd be waiting in line forever while someone who truly needed that parking spot would be S.O.L., so I rolled down my window as I drove by her on my way out of the lot, looked right at her, and said, "You're an absolute disgrace to disabled people everywhere. Imagine if you really needed that spot and some jerk parked in it because they're too entitled/lazy to park elsewhere." Let's just say that she was FUMING mad and began to yell at me. Not my finest moment because it really wasn't any of my business, but I still smile thinking that hopefully she's not abusing those spots anymore (and if she is, at least she knows there are people willing to call her out on her BS!).

    • I was chuckling as I read your story for some reason. I was always jealous of the non handicapped using handicapped spaces but never said anything about it. I'm surprised this debt can be forgiven due to injury.. I don't know of many other debt that will be cancelled due to disability. I wonder why an exception was made for student loans

  7. Interesting; ya learn something new every day. I thought there was NO way you get discharge that debt, but where there's a will, there's a way! As restrictive as the requirements sound, knowing the number of scammers and shitty doctors out there, I can already imagine the multitude or pot smoking slugs out there that have had theirs discharged. Just take a look at the typical person that pulls up to a handicap spot and you get the picture (about 1 in 5 are truly handicapped if you count enough encounters).

    • If someone can pull off a student loan discharge I would like to shake that man or woman's hand. Talk about being determined!

  8. That's kind of depressing to think about, but I guess it does happens.

    • At least there is a way out of your student loans. Makes no sense for a person who is totally disabled to have to pay those loans.

  9. Nice post, it could be really useful for the son of my brother, he's a student at the MIT, and he had been searching for a nice solution for this for years, I think I'll forward your text to him.

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  10. fwisp.com says:

    How To Get Rid of Your Student Loans Without Paying or Ruining Your Credit!…

    The only way I know that you can get rid of student loans is through the process of Permanent Disability Discharge, in which individuals get assistance in paying off the amount of their education loan. However, there is a strict guideline as to who can…

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