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There is a separate process from the Social Security Administration’s process that is available through NelNet to discharge federal student loans (no matter who the servicer is).  It’s called a Total and Permanent Disability Application.  The good news is that it has been taking our firm only about two months to obtain this 100% discharge of student loans.  It’s also tax free for any applications approved prior to 2025.  After that, it will depend upon whether the program’s tax forgiveness waiver is extended by Congress.

A couple critical issues arise when filing these applications.  First, is the need to get it right the first time around — in other words don’t file a half-%$$ application and expect it to be approved by the Department of Education.  Second, many jobs nowadays are performed remotely and at all hours of the day or night.  So an employer’s inability to reasonably accommodate an employee under the Americans with Disabilities Act may need to be explored and included as a supplement to the TPD application.  Third, you can work, although at a minimal level and earning no more than the poverty level for a family of two.

This begs the question:  how much work can be performed, but yet qualify as being unable to engage in “substantial gainful activity”.

Student debt is no longer just a young persons’ issue. As of December 2018, approximately 8.4 million Americans aged 50 and older owe $289.5 billion in student loans, approximately 20% of total student loan debt.  This represents a 512% increase from the $47.3 billion owed by that cohort in 2004, making the growth of student loan debt among older borrowers the greatest among any age group.

A 2017 analysis by the Consumer Financial Protection Bureau reveals that from 2012 to 2017, total student loan debt for borrowers aged 60 and above increased by 72% in New Jersey, 107% in Pennsylvania, and 146% in Delaware. Many of the growing number of older borrowers face challenges that make them more reliant on their loan servicers for assistance and more vulnerable to misrepresentations by those servicers.

The data also shows that record numbers of older student loan borrowers are struggling with repayment.  Delinquency rates for student loan borrowers over 60 has jumped by 80-106% in the Northeast United States.  Typically, student loans are often a bigger problem here in the Southeast, so I would guess Florida’s delinquency rate has increased at least 100% from five years ago.  AARP reports that federal student loan borrower defaults increase with age.  In 2015, approximately 29% of federal student loan borrowers between 50 and 64 were in default; for borrowers aged 65 and above, the default rate rate rose to 37%  The default rates for those below 50 is 17% – still high unfortunately.

While I don’t generally post our client reviews, there are times where I simply can’t help myself.  This one in particular shows the difference between having an advocate on your side versus getting your information from the student loan servicer — who by the way represents the creditor only.  They do NOT represent the borrower.

Who are all these people?  People who want to put an end to the student loan crisis.  Most are Bankruptcy Judges from the Middle, Southern and Northern Districts.  The rest are us committee members who helped to put in place a new Student Loan Modification Program which goes into effect September 1, 2019 for the Middle District of Florida.

As I like to put it, the idea behind the Student Loan Modification program is to: 1) increase communication between bankruptcy debtors and student loan servicers; 2) increase awareness of various options available to reduce student loan debt; and 3) end the needless forbearance and accrual of yet more debt in bankruptcy by providing easier access and instructions for federal programs as well as mediation opportunities for private student loans.

I have a few trainings scheduled in the near future for other bankruptcy attorneys who have requested this:

Yes, it’s a holiday weekend and I’m not quite sure why a local consumer group JEDTI is doing their 2nd Annual Convention today, but it is about a 100 degrees out and I think I’d melt outdoors anyway so why not?

JEDTI was originally made up of mostly foreclosure defense attorneys, and this is how I came to be a part of the group several years back.  It was amazing the knowledge this group imparted and I am forever grateful to be a member.

Now that the foreclosure crisis is for the most part behind us, JEDTI has morphed into other consumer protection areas including robocalls under the TCPA, fair debt collection violations, credit repair and reporting violations under the FCRA  — and now perhaps student loans if they like what I have to say.