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Student Loan Disability Discharge

Established Member

Re: Student Loan Disability Discharge

Minion, congrats. It's frustrating how the interest on student loans is so much higher than the federal rate. Be sure to keep all of your paperwork forever.
Starting Score: 616
Current: Equifax - 710
TransU - 694
Experian - 788
Goal Score: 760
Message 111 of 128
New Contributor

Re: Student Loan Disability Discharge

I have al my paperwork and letters in a file. I had a super easy time filing for diability so I got a little nervous that someone would pull the rug out from under me. The sad thing is if they would have taken the smaller payments I would have been able to pay in full. 

Message 112 of 128
Established Member

Re: Student Loan Disability Discharge

Be sure to hang onto those papers. They came after mine over 30 years later~! I'm still not sure what is going to happen about it. 

Starting Score: 616
Current: Equifax - 710
TransU - 694
Experian - 788
Goal Score: 760
Message 113 of 128
New Member

Re: Student Loan Disability Discharge

Thank You Everyone For Your Comments RE Discharge and how it affects your credit rating.  I am in my 50s and owe less than $5,000 in loans from graduate school.  I am fully prepared to pay taxes on this amount.  This tax year is going to kill me as I also got my "back pay" check from social security from the time of my disability date to the date it was approved - unfortunately - they don't take taxes out of that lump-sump payment, so I'll owe taxes on that too. 

 

The thing that most concerns me is what I am reading is how this could affect my credit score.  I have worked hard to achieve my score (800s) - the only debt I have (other than the student loan) is my mortgage and credit cards (the credit cards = about $15,000, all from medical bills....  I had both heart and brain surgery last year.... my medical bills exceeded $200,000 - loopholes from the insurance company and the need for a private nurse at home following brain surgery cost in excess of $13,000). 

 

I had employer sponsored Long Term Disability insurance which paid 60% of my annual salary - but they decided I was no longer disabled (**bleep**?) while Social Security decided I was completely and totally disabled.  (I am appealing the private disability insurance company and waiting for their answer.)  

 

There is no way I can live in my current home and location on SSDI alone w/out my private insurance LTD, so I plan to sell my place and move to Tampa FL which is 28% less for cost of living and housing is 56% less.  All things being equal (this will depend upon the Presidential election, if there is another housing bubble burst or recession), I should be able to sell my place and after closing costs be able to put between 25% - 30% down on a cheaper place in Florida.  I won't have a luxury lifestyle, but will be able to live within my SSDI monthly check.

 

What is killing me are the stories about how the discharges are ruining credit scores/histories.  Mine are pristine.  It appears once these appear on the three CB reports it will take considerable amount of work and time to have the credit reports corrected so if the scores are lowered, they can readjust  which will be necessary for the  purchase of a new condo in Tampa. 

 

My disability is neurological in nature and it is hard to process new information and instructions.  If somene could organize the process they went through in an orderly step-by-step fashion with phone numbers and documents I should use and gather for each step (rather than sharing their story in  narrative form), it would help greatly.  For example, from what I can tell, it doesn't help to call the Department of Ed.

 

Thank You

Message 114 of 128
New Member

Re: Student Loan Disability Discharge

My sister had student loans from the 1960s.  When she and her husband went to purchase their first home in the 1980s, a letter arrived (to my parents home, go figure) regarding her outstanding loans, which had grown due to interest charges.  Since she had twins born prematurely with special needs, my parents never told her of the letter and paid the loans.   At the time there were many stories in the media of many people (very well off doctors and lawyers) who failed to pay off their loans.  They found their cars being taken by tow trucks and held......  suddenly they came up with the $$$ to pay the loans. 

Message 115 of 128
Highlighted
New Member

Re: Student Loan Disability Discharge

Thank You For Your Continued Comments RE Discharge and how it affects your credit rating. 

 

I am in my 50s and owe less than $5,000 in loans from graduate school.  The thing that most concerns me is what I am reading is how this could affect my credit score.  I have worked hard to achieve my score (800s) - the only debt I have (other than the student loan) is my mortgage and credit cards (the credit cards = about $15,000, all from medical bills....  I had both heart and brain surgery last year.... my medical bills exceeded $200,000 - loopholes from the insurance company and the need for a private nurse at home following brain surgery wasn't covered). 

 

There is no way I can live in my current home,  so I plan to sell my place and move to Florida which is 28% less for cost of living and housing is 56% less.  All things being equal (this will depend upon the Presidential election, if there is another housing bubble burst or recession), I should be able to sell my place and after closing costs be able to put between 25% - 30% down on a cheaper place in Florida.  I won't have a luxury lifestyle, but will be able to live within my SSDI monthly check.

 

(NOTE:  I had Long Term Disability through a private insurance company from my former employer  which paid 60% of my former salary - while Social Security declared me totally disabled, they declared me as "recovered" and discontinued payments.  I am appealing their decision - a lengthy process.)

 

What is killing me are the stories about how the discharges are ruining credit scores/histories.  Mine are pristine.  It appears once these appear on the three CB reports it will take considerable amount of work and time to have the reports corrected so if the scores are lowered, they can readjust  which will be necessary for the  purchase of a new condo. 

 

My disability is neurological in nature and it is hard to process new information and instructions (when I downsized last year to adjust for the lower income from my LTD payments and bought my current condo, my real estate agent and mortgage broker had to explain and walk me through each document). 

 

Could you organize the process you went through in an orderly step-by-step fashion with phone numbers and documents I should use and gather for each step (rather than narrative form)?  It would help greatly.  As of now, reading your many posts, I don't understand what I should be doing or when.  When I got the letter from Disability Discharge it was nine pages - I couldn't understand it.  I called their number and a CSR explained to me the simple form to complete (check two boxes and sign).    This was the same with the Social Security application process.  It is very difficult to explain to others the nature of this disability and how I process information - but to have things but in an orderly fashion:  A, B, C,  or 1, 2, 3....  helps greatly. 

 

I know this is a lot to ask, but I'm certain there are others would appreciate having the process outlined in this manner -  particularly those with neurologic disorders or tramatic brain injuries. 

 

Thank You

Message 116 of 128
New Member

Re: Student Loan Disability Discharge

AMP, I am in a similar position to you with a need to sell my home. After a nasty divorce, I can't afford it.  I feel sick to my stomach and at the same time relieved about my approved TPD discharge. I received a letter that my discharge is effective as of 11/9/2016; then the 3 year monitoring period. My fears are mainly whether and if the process will affect my credit bureau reports,  scores etc., negatively.  I  am on SSDI for neurological problems and all of this is so stressful (totally unexpected after a brilliant career just to be shot down at 57 years-old). So many here tell the same scenario , but end up with different problems as regards their credit following discharge approval. I can't even wrap my head around all of it ...

 

Anyone .... does Navient send info to the bureaus, or does Nelnet? or both? On my Navient account  it  currently shows, as of 11/17/2016, my balance is zero - paid by the Department of Education. However, on Nelnet, my balance of $43,000 is still showing. Does anyone on here know what I should expect next? My loan payments have never been late. If the payments were $0, it was due to IBR. This process was a nightmare for me and took 11 months to this point, because of hiccups literally and somehow them never getting OVERNIGHTED INFORMATION 4 times! I am at the end of my tether and just want some postive things to happen. People, don't get me wrong - The day that I found out my loans will be discharged I was jubilant, but the following years will be a bumpy road it looks like.

Message 117 of 128
New Member

Re: Student Loan Disability Discharge

 

I'm keeping every piece of documentation - from the organization that confirms payment to the department of ed that shows balance of $0 and calling in every month to make sure no payments are due (you know how things can fall through the cracks).  Watching my FICO score like a hawk which is provided free by my bank and credit card company.- it does range because they get from the different credit bureaus.  Just will continue to watch in the coming six to 12 months. So glad it wasn't much money.  So many people have had $130,000 or more forgiven to learn they have huge tax bills.  May or may work against them with Trump's tax plan given new tax rates. 

 

I'm avoiding checking anything because every time you make an inquiry it is a ding against your score unless it is a mortgage inquiry - so for now using what is reported for free.  If there are big fluctuations or a drop, will then inquire and get fixed.   

Message 118 of 128
New Member

Re: Student Loan Disability Discharge

Yes, I have printed everything out too! Likewise I am using my credit card FICO for score right now. I did pull my 3 free reports, but did not request my scores last week. I am waiting until I need to, like you say. I am praying that this process gets some relief soon. The stress is unrelenting. Thank you for your reply so quickly! Much appreciated Smiley Happy

Message 119 of 128
New Member

Re: Student Loan Disability Discharge

Did you have a problem disputing more than one at a time .....

Message 120 of 128