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I’m a Disabled Nurse But My Loan Are Not Discharged Yet

Written by Steve Rhode

“Dear Steve,

I went to nursing school in 1990-1993 and acquired a federal student loan.

After working as a nurse for ten years and paying on this loan, I became totally and permanently disabled with “NMIL” (No medical Improvement Likely). I have not worked since 2002, my entire income is from Social Security Disability and has been since that time.

I applied for and was granted deferments and forbearance several times until finally in 2006 my doctor and I ATTEMPTED to correctly fill out the disability discharge paperwork. This paperwork was repeatedly returned for some minor infraction or another.

Many attempts and two years passed and we FINALLY got it right and the dept. of education put my loans on some kind of “Administrative Hold” stating in a letter that I appeared to meet the qualifications for a TPD discharge.

Since March 2008, the NSLDS website shows my loans in a “default converted to disabled” status.

They apparently REFUSE to discharge my loans.

Sallie Mae claims to have no record of my loans when I call them.

One man I talked to stated that they had sent me a letter but I failed to respond to their request for further information and so my loans were in repayment status. I asked him to send me a copy of that letter and he refused. I then told him that it sounded to me like this was simply a ‘line’ they are trained to say over the phone. I never received a letter from them.

I’m exhausted from all of this.

What is my next step?

Can I sue the Department of Education and Sallie Mae for breach of contract?


Dear Sara,

Can you sue those folks over your student loan situation? Well it is America, the land where you can sue anyone, for anything, at anytime.

I fully agree the Department of Education did a horrible job of processing disability discharges over the past years. However, they seem to have become much more efficient over the past couple of years since light was shed on their ineptitude in this area.

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The number of complaints I get from consumers now about disability discharge problems is much lower than it has ever been.

It is unclear what the change in status label means or how you feel the loans were not eliminated if they are no longer attempting to collect and they are showing a disabled status. There just isn’t enough information available there for me to make a definitive statement about the current status of your loans.

One possibility is they got most of the way through the process and did put your loans on hold without finishing the actual processing of the paperwork. Again, more information is needed to clarify.

As far as Sallie Mae goes, if you are talking about a permanent discharge for private student loans it is rare. There have been some situations where people have obtained a permanent discharge but they are irregular. There is no requirement for a private student loan lender to discharge any private student loan due to disability.

If Sallie Mae was simply servicing your federal student loans and the Department of Education changed their status the loans may have been recalled from Sallie Mae for servicing. So it would not be unheard of for them to no longer have a record of the loans.

So I think there is hope to deal with your student loan situation. And one place to start right now would be to file a complaint with the Consumer Financial Protection Bureau over this issue. They are taking these complaints seriously and can help to get your situation bumped up to a knowledgeable person.

You can file a complaint online here.

Before you waste any more time or spend money suing, I’d suggest filing the CFPB complaint and let that process address your situation first. I think you’ll be surprised that this will help you to get some clarity and answers about where your loans stand.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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