Student loan borrowers who apply to have their loans canceled due to their disability or the death of their child can worry about one less thing: possible tax consequences. When a borrower dies or becomes permanently disabled before paying off student loans, the loans can be discharged, relieving the disabled borrower or surviving family members […]

It is a little known fact that a forgiven student loan is usually treated as income for tax purposes. While some types of student loan cancellations (e.g. Public Service Loan Forgiveness, closed-school, etc.) are exempt from taxation, forgiveness of the debt due to disability and death is not exempt. There are limited exceptions to taxation […]

We have been calling on the government for years to stop offsetting Social Security benefits of disabled student loan borrowers.  Recipients of Social Security Disability (SSDI) payments generally qualify for disability discharges.  Yet most do not know about the discharge program and do not know that applying for a discharge stops offsets and cancels loans. As part […]

Today, the Department of Education released a new report outlining a series of statutory, regulatory, and administrative recommendations in response to President Obama’s Student Aid Bill of Rights.  There are some good recommendations for borrowers (e.g. see the recommendation to increase the amount of Social Security benefits that should be protected from offset).  The Department […]

The Obama Administration announced a number of relief options for borrowers this week, including new ways to help disabled borrowers.  This has been overshadowed by other news on student loans this week, but it is criticially important.  We have been calling on the Administration for some time to stop collecting from Social Security Disability Insurance (SSDI) […]

We have long argued that the Department of Education should tie its standards for student loan disability discharges to Social Security standards.  At last, we are starting to see some progress in this area. Some changes are already in effect, but most will not kick in until next year.  By that time, the process should […]

This is dedicated to my client Mr. A in hopes that he will keep his dignity and not lose hope. Some basic facts about Mr. A:  He is 83 years old and a veteran of the Korean War.  His sole source of income is Social Security.  He has an unfortunate array of medical problems, both […]

We highly recommend Pro Publica’s latest article on student loan disability discharges.  In this article, Sasha Chavkin asked the Department of Education to clarify its position on the most critical disability discharge issue—Will the Department consider Social Security disability determinations when making student loan disability discharge decisions?  The answer, as Chavkin reports, is  that the […]

We submitted these comments to the Department of Education last week.  We will write a number of articles the next few weeks with more details about key proposals. Our recommendations focus on strengthening relief for borrowers who are harmed by school abuses or  who cannot repay due to personal circumstances, such as disability.  We also […]

ProPublica and the Center for Public Integrity published an investigation this week of problems with the Department of Education’s disability discharge process.  Unfortunately, we were not surprised by the findings.  We have advocated for many years for more transparency in the disability discharge system and for a fair and efficient process. There have been some positive […]