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Posts: 2
Registered: ‎12-09-2008
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what counts as earnings for the total disability discharge?

Re: total disability discharge for student loans...does unemployment count towards the annual earnings from employment that cannot exceed the poverty line for a family of two?  Or does disability income count toward that as well?  If you are not working earning the money it seems that it wouldn't count?  Any thoughts?
Frequent Contributor
Posts: 465
Registered: ‎06-13-2008
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Re: what counts as earnings for the total disability discharge?

Unemployment would never qualify...just being on unemployment implies you are capable of working and that you are seeking active employment.
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Posts: 144
Registered: ‎05-22-2008

Re: what counts as earnings for the total disability discharge?

They examine your federal tax information to determine income.  Not sure how unemployment insurance shows up there, but I agree with the previous poster, a condition of recieving unemployment insurance benefits is your certification that you are looking for work (although that is not the same as working?)  You could call and ask...


Sometimes the income from disability insurance may be questioned, then paperwork would need to be submitted showing what the income if from, and that it's not from employment (some disability insurance payments are actually reported as "earned income", depending on tax withholding, so it can get a little tricky)


Even though the form states that there is an income "guideline" (see below) I have never heard of anyone who had income from actual employment being granted the discharge.


from the form: 

NOTE: A physician cannot certify that you have a total and permanent disability if, at the time of the physician’s certification, you are able to work and earn money in any capacity. However, if you attempt to work during the conditional discharge period, you may earn up to the poverty line amount each year during that period. This standard allows you to try to work without being disqualified from receiving a final discharge. The poverty line amounts are updated annually.


If you have a total and permanent disability, this means that you are unable to work and earn money because of an injury or illness that is expected to continue indefinitely or result in death.

NOTE: (1) This standard may be different from standards used under other programs in connection with occupational disability or eligibility for social service benefits. (2) You cannot be considered to have a total and permanent disability if your condition existed at the time your loan(s) was made, unless your condition has substantially deteriorated so that you are now totally and permanently disabled.

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Established Member
Posts: 22
Registered: ‎06-23-2008
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Re: what counts as earnings for the total disability discharge?

LynnInMN wrote:
Unemployment would never qualify...just being on unemployment implies you are capable of working and that you are seeking active employment.

I would like to address this statement...


The Unemployment program only requires that you are "ready, willing and able" to report to work. 


My husband would LOVE to be able to work.  He still keeps trying but it never gets past the interview process.


My DH is WILLING to work and, as a result, is on unemployment.  The reality of whether he CAN work can only be determined by his employer once he tries. 


How else can we determine his abilities if you never try?


In the verbiage of the loan discharge program it says that a disability rating by a government agency does not determine his eligibility for the loan discharge program.  This is where a doctor needs to verify his disability...not a government agency, right? 


So why would ANY government agency trump what a doctor's findings say?  


That's the irony.  Smiley Happy




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