Can My Fedloan be Forgiven Since I Can't Work From Surgery?

Question:

Dear Steve,

I recently had my left hip replaced, I have a Fedloan my parents have been helping me pay since I can’t work due to hip surgeries, had 2 surgeries back in December 2018 then right hip replaced in August 2019 and left hip replaced May 28th, 2020. I owe around 3500 dollars on my Fedloan.

Salvador

Answer:

Dear Salvador,

You have certainly been through a lot with both hips replaced. Wow.

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Since this is a federal student loan you have some options. The only forgiveness option I can think of would be if your hip situation leaves you totally and permanently disabled. Your doctor certified disability must have lasted for a continuous period of not less than 60 months.

Everything you ever want to know about Total and Permanent Disability (TPD) Discharge can be found here.

If you don’t think you will qualify for a TPD discharge at this point and your parents are unwilling or unable to continue to help with payments then you should look at getting your federal loans on an Income-Driven Repayment (IDR) plan.

There is no charge to do this.

Given your situation, your student loan payment may be as low as $0 per month and you will remain out of default or collections. However, the downside is the account balance will grow as unpaid interest is added back to what you owe. The IDR programs do have loan forgiveness after 20 to 25 years but as of now, the forgiven debt would be taxable as income if you are not insolvent at that time.

For more information on IDR payments, click here.

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