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You're our top priority.
We want you to be able to make decisions about your student loans with confidence. We offer objective, independent, straightforward guidance on student loans and refinancing lenders. While our site doesn't answer every question or have every lender, we are proud to provide the information and tools you need — free of charge — to make the best decisions for yourself. So how do we make money? We get paid in two ways. First, you can hire us to develop a student loan strategy for you and implement that strategy on your behalf. Second, our partners compensate us. This may influence which refinancing lenders we write about, but it doesn't affect our recommendations or advice. Our partners cannot pay us to guarantee favorable reviews of their products or services.In 2023, nearly 67 million Americans received Social Security benefits each month, amounting to over one trillion dollars in total annual benefits, according to Social Security Administration data. Of these recipients, less than 5% owe federal student loans.
If you are part of this small group, you may wonder if your student loans can be forgiven while receiving Social Security. The answer is yes, through a total and permanent disability (TPD) discharge. The SSA doesn’t make a “100% disabled” finding. Instead, your SSDI or SSI record qualifies if your next disability review is scheduled 5 to 7 years out or 3 years out, if you have received disability benefits for at least five years or your disability began at least five years ago, or if you qualified through a compassionate allowance. If you now get Social Security retirement benefits, you qualify if your record met one of these tests before you switched. If your SSA record doesn’t qualify, you can still apply with a certification from a doctor or other licensed medical professional.
For those without a permanent disability, an income-driven repayment plan offers another route to loan forgiveness. Under IDR Plans, the U.S. Department of Education forgives remaining loan balances after 20 to 30 years of repayment, depending on the plan.
A one-time IDR account adjustment, now completed, gave many borrowers retroactive credit toward this forgiveness.
Related: What happens to student loans when you go on Social Security?
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Advertiser Disclosure
You're our top priority.
We want you to be able to make decisions about your student loans with confidence. We offer objective, independent, straightforward guidance on student loans and refinancing lenders. While our site doesn't answer every question or have every lender, we are proud to provide the information and tools you need — free of charge — to make the best decisions for yourself. So how do we make money? We get paid in two ways. First, you can hire us to develop a student loan strategy for you and implement that strategy on your behalf. Second, our partners compensate us. This may influence which refinancing lenders we write about, but it doesn't affect our recommendations or advice. Our partners cannot pay us to guarantee favorable reviews of their products or services.Are student loans forgiven if you are on Social Security?
Federal student loan borrowers receiving disability benefits through the Social Security Administration may qualify for automatic loan forgiveness. Since September 2021, borrowers identified as totally and permanently disabled based on data matching with the SSA get a loan discharge automatically without needing to apply.
These borrowers are notified of their eligibility for automatic TPD discharge first and can opt out if they wish.
In its August 2021 press release announcing the policy, the Education Department said the change would result in over 323,000 borrowers receiving more than $5.8 billion in federal student loan relief.
In that same announcement, the department announced plans to eliminate the three-year income-monitoring period, and it did so effective July 1, 2023. One rule remains: receiving a new Direct Loan or TEACH Grant within three years of an SSA-based discharge reinstates the debt.
Keep in mind that getting a student loan disability discharge won’t affect your Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits.
Note that private student loan forgiveness options for disability differ from the Education Department’s policy. Lenders like Sallie Mae and SoFi may release the primary borrower from a private student loan debt if they have a qualifying disability. But the cosigner may remain on the hook for the balance.
Related: SSDI and Student Loans
How to get loan forgiveness when you draw Social Security benefits?
If you are receiving Social Security but not because of a physical or mental impairment, your best option for loan forgiveness, other than a TPD discharge, is Income-Driven Repayment Forgiveness.
These plans are open to most federal student loan borrowers, including retirees. Parent PLUS loans are the main exception: they can’t be repaid under these plans directly. The plans offer affordable monthly payments and forgive remaining balances after 20 to 30 years of qualifying payments, depending on the plan. Some deferment and forbearance periods also count.
What is the student loan relief for Medicare and Social Security Recipients Act?
The Student Loan Relief for Medicare and Social Security Recipients Act is a bill introduced to eliminate student loan debt older than 20 years for Medicare and Social Security disability insurance beneficiaries, including current and future enrollees. It was introduced in December 2022 and again in December 2023, but neither version made it out of committee.
Related: Student Loan Forgiveness Age 65
Disabled and older individuals often struggle with student loan debt alongside substantial health care expenses. The Consumer Financial Protection Bureau discovered that 39% of consumers aged 60 and older with student loan debt neglected health care needs such as prescription medicines, doctor’s visits, and dental care due to cost concerns, compared to 25% of older consumers without student loans.
Had it passed, the Act would have helped over 3 million Americans aged 60 and older who collectively owe more than $86 billion in unpaid student loans, according to CFPB data.
Bottom Line
For many older Americans, federal benefits are their sole monthly income. Protecting your Social Security benefits and tax refunds from Treasury offset for defaulted student loans is crucial. Over the years, I’ve assisted hundreds of Social Security recipients to safeguard their funds.
Schedule a call with me today. Together, we’ll devise the best strategy to eliminate your student loans swiftly and secure your Social Security payments.
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