Disability Discharge of Federal Student Loans

Average student loan debt is nearly $40,000 -- per person! This economic burden can massively impact all the other money moves you make in your life. 

Luckily, there is a disability discharge program for federal student loans, and more people qualify than you might think. Plus, the program is getting a lot easier to navigate, with some big, positive changes promised starting in July 2023. 

Today, we'll talk to Heather Watkins, a writer and disability advocate who successfully had her student loans discharged through this program. We're also joined by Persis Yu, Deputy Executive Director and Managing Counsel of the Student Borrower Protection Center, who has been instrumental in advocating for improvements to the program and for student loan borrowers at large. 

By the end of this episode, you'll have a better idea of who qualifies for this program, how it's expected to function after this summer, and what it may or may not mean as your child is figuring out how to finance their own education. This episode is also great for anyone who may qualify for the discharge program due to their own disability -- it's not just for parents. 

Follow Heather’s Work: http://slowwalkersseemore.com/

Utilize resources from Persis and her peers at the SBPC: https://www.cancelmystudentdebt.org/

Where to get started with the Disability Discharge program for federal student loans: https://studentaid.gov/manage-loans/forgiveness-cancellation/disability-discharge

Currently, loan amounts canceled through this program are not counted as taxable income. But that could change on Jan. 1, 2026 if this portion of tax law isn’t extended. Contact your congressperson and Senator to request that this provision be extended. You can find your senator and congressperson here: https://www.lwv.org/take-action/find-your-elected-officials

And if you want to provide the specific provision you want to see extended to your representatives, it’s Section 11031 of the Tax Cuts and Jobs Act: https://www.congress.gov/bill/115th-congress/house-bill/1/text

Connect with your local Center for Independent Living for resources here: https://acl.gov/programs/centers-independent-living/list-cils-and-spils

Heather references Mass Rehab Commission, which is a vocational rehabilitation program in Massachusetts. Voc rehab programs can help disabled people pay for college depending on your state. We covered voc rehab in this episode: https://momautismmoney.com/vocational-rehabilitation/

And you can find your state’s vocational rehabilitation program here: https://rsa.ed.gov/about/states

Want to consolidate your old loans to take advantage of the recount of payments for student loan forgiveness that Persis was talking about? Here’s where you can find the consolidation application (must be done by May 1, 2023  or earlier to qualify for this specific program): https://studentaid.gov/app/launchConsolidation.action

Here is more detailed information on the IDR Account Adjustment and how it might affect you as a borrower: https://www.cancelmystudentdebt.org/income-driven-repayment

Full Episode Transcript: https://momautismmoney.com/disability-discharge/