Hello!  I’m very excited to find this forum, as I’ve come to my wits end with my situation, and I have no idea what to do to resolve it.  I’m hopeful you can provide some advice that will show me a possible resolution.  I figured if nothing else, it couldn’t hurt, and hopefully if we can figure out my situation, maybe it will help someone else, as well.

I’m an Arkansas native, and live here still.  I attended college, and used some loans to help with the payment.  I became disabled before I had a chance to graduate, and attempted to use the disability forgiveness clause in my student loan paperwork.  According to the agreement, if I were to ever become severely and permanently disabled,  my loans would be dissolved.  I contacted the lender, and had the proper paperwork sent to me.  I filled it out, and sent it back, and received the paperwork back, with notes stating that I needed more information.  I made copies, circled and underlined all the information they requested (which had been included in the original, to begin with), and sent the paperwork back a second time.  After several months, and receiving more letters stating that I needed to address the matter, I called the lender, who claimed to have never received any correspondence from me.  I told them that I sent back the paperwork they requested of me, showing the information that had been on the original paperwork, and they claimed that never happened.  Their stance was that they had never sent me back the paperwork, because they had never received it.  When I told them that I had copies, they said they’d send new paperwork, and to have my doctors fill it out, and send it back in.  I was already getting fed up with the way they were treating me, but I gave them the benefit of the doubt, and did what they asked of me, again.

This time, after sending them the paperwork completed by my doctors (who were not happy about filling out paperwork to begin with, let alone paperwork involving disability, and having nothing to do with their practice).  I sent the paperwork (this time with a tracking number, to make certain it arrived, which it did), and called to see what I needed to do next.  This time, I was informed that I had to have the paperwork filled out by orthopedic specialists, as my primary care doctors wouldn’t suffice.  As I didn’t have an orthopedic specialist that I went to on a regular basis, I began to look for one that would be willing to do paperwork, and found no one.  Every specialist I contacted gave me the same answer…“We don’t handle disability paperwork”, despite my assertion that this was not an attempt to obtain a disabled status, but simply to prove that I was already disabled, and had been for many years (at this point), with no chance of improvement.  I sent this information to the lender several times, and received no advisement as to how to proceed.

Eventually, my loans went into default, and they began to garnish my income.  Income, mind you, in the form of of disability benefits, as that is my only source of income since 2007.  So, since they refused what proof I could give them that I am disabled, and unable to repay my loans, they began garnishing the very benefits that I receive specifically for being disabled.  The logic (or lack thereof) in that situation astounds me. 

I have no idea how to proceed.  I have contacted a lawyer, and was referred to a lawyer that specializes in this sort of ordeal.  When I told him the details of my situation, his response was “Yeah, they can do that”.  So much for a free consultation.

Granted, they are not able to garnish much from my benefits, to begin with, and it really doesn’t make a huge difference in my monthly budget, but every little bit is incredibly helpful to me.  While I could manage to maintain my current standard of living with this garnishment, it’s making no progress on repayment of the loans, and has ruined my credit, and any hope of getting HUD loans and specialized housing help.  I realize it may be a pipe dream, but I would like to think that I may still have a chance at some sort of future without having to depend on roommates, and the kindness of others.  I’d like to be able to make use of some of the programs that have been designed to help people in my predicament, but as long as this is causing financial trouble for me, I don’t see how that will ever be possible.  Even a little relief to catch my breath would be appreciated, at this point.  Do you have any advice as to how to manage that?  I appreciate your time, and any thought you could spare on this matter.  Thank you!

I’m sorry for your predicament. Loan servicers can be very unhelpful. I’d keep trying to apply for the disability discharge. Make sure you read everything on this website: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/disability-discharge

It is the most up to date information. If your servicer is being unresponsive, ask for a manager, or the manager’s manager, or look up help from the Student Loan Ombudsman. While the ombudsman hasn’t much authority over the servicer, they can at least know the right people to talk to.

Keep in mind that the disability forgiveness is not tax-free, and you will have to report the amount forgiven as taxable income, which means a large bill from the IRS. However, if you can prove insolvency (you own less than the amount you actually owe), you can avoid paying taxes on all or part of that income by filling out the appropriate forms. I hope things get better for you!