Lawyer Explains: Student Debt Relief for Seniors

Hey, what's going on everybody? Welcome back to this week's Q&A Fridays. As always, I'm your host, Stanley Tate, and I'm joined by our co-host, Emma Head. What's up, Emma? Hey, everyone. All right, so what question do you have for me today, Emma? So today, Robert, age 72, wants to know, I know borrowers can be discharged for total disability, but what about borrowers who are well into their late 60s or even 70s who aren't actually disabled, but are just simply too old to hold down a job, and if they tried, would suffer health consequences, assuming they could even get anyone to hire them? All right, so we have basically, is there an old age forgiveness, right? Or is it because I'm drawn social security, is there forgiveness for that? And the short answer is no, there isn't forgiven just because you're old, right? Because you can go back to school in your 70s and borrow student loans. It doesn't mean that they're automatically going to be forgiven for that. The forgiveness programs are related towards your disability. Now, Robert's like, hey, look, I'm not disabled, but if I try to go to work, it will lead to a disability. Well, then maybe you need to go to work and get the disability, which is a shitty thing to kind of think about, like, oh, you got to go degrade yourself to get this forgiveness. But it's just the nature of these programs. That said, is it possible that a doctor could look at your age and say, you are unable to engage in substantial gainful employment, and that will last for, I think it's 60 months. If the doctor says that, then yeah, you can go ahead and fill out the form, even though you don't have a diagnosed disability through the social security officer or anything like that. But your doctor signs off and says you're not able to engage in substantial gainful employment, then you can get your loans forgiven through that disability discharge. But you would need a doctor to sign off on that. Okay, is there a name for that process? Yes, the total and permanent disability discharge application. And let's go ahead and pull it up. And so it's something that you can just put in Google. I just typed in TPD application PDF. And what you'll see here is that the very first question is, are you a veteran? No, if you are, yes, whatever. But let's say you aren't. Then it says go to item two. Are you currently receiving SSDI benefits? No, I'm not. Then cool. Then we jump down to section three, complete section three, and have an authorized medical professional complete and sign section four. And in section four is where the doctor signs off on it. Someone with an authorized medical professional certificate. And they just go through and they detail out your mental, physical or mental impairment. Is it expected to result in death? Yes or no. If it's no, applicant's impairment lasted or is expected to last for a continuous period of at least 60 months. Yes. Then complete five, what that is. Then number six of it. And then any limitations. So it is totally plausible that someone with old age, they have an impairment that's stopping them from working for a continuous period of at least 60 months, right? That's possible. So you could get it without having social security. And have any of your clients been through this process? Ones who weren't technically disabled in the beginning, but then they fill out this form and then they managed to get it. So I've had had clients that go through and get a disability discharge, but have I had someone just get it straight for old age? No. Like the last one we did is someone who, they're on a heart transplant list, right? Like we got that one done or one we're working on now. And it's about to wrap up as a young lady that has chronic fibromyalgia, but there isn't like a old age one. So typically for those people, the question really is, okay, if I can't get them forgiven because you can't get a doctor, what is like the best outcome we can hope for? And it is really, okay, what are your income sources? And for a lot of them, if it's just social security, then we know their payment's going to be zero or near zero. And so if I could tell you, all right, you're going to have a really super low monthly payment, or it's going to be near zero. And that payment will lead to loan forgiveness. But your burden is you have to fill out this paperwork every year, but it's going to go away at some point. Is that okay for you? And a lot of times they're like, yeah, that's fine. Okay. And are there any other avenues like bankruptcy, kind of undue hardship, angles that somebody could go down? Yeah, bankruptcy can be a really good option here if you're someone who's had your loans for a decade or so, like you weren't late to life education, right? And so now you're in your sixties, you've had your loans for several years. Bankruptcy can be a really good option for a federal student loans to discharge them there. But a lot of times when I say it to people, they're like, well, I don't want to file bankruptcy. And I'm like, I agree with you. I'm just saying, here's the universal options here that you can look at. But the other thing just going to be waiting on is income-driven repayment forgiveness. And so long as we're saying that there is a clear plan that you can have an affordable monthly payment so you can live your life. And we know that leads to loan forgiveness versus you stressing about affording and things like that. Then let's just do that part. Let's just take advantage of income-driven repayments. Let's do that. But if you can get a doctor to sign a form and it could be your doctor, it could be your specialist, whatever. And they're willing to sign it. Cool, do that as well. There's no wrong or right answer here. I guess the wrong answer would be just assuming that you'll be saddled with the debt and struggling to make monthly payments because that hasn't been true for any of my clients. Okay, and do you think there's any hope for Biden's new hardship forgiveness for people in old age? Yeah, so we know Biden's hardship forgiveness is in the works and it's still kind of getting the kinks knocked out of it so it can go live. But if you're someone who meets those requirements on their program, right now it's like if you have an 80% chance of defaulting according to the Department of Education's algorithm or you meet certain standards or you can produce evidence showing that you produce certain standards that are akin to undue hardship and bankruptcy but are a little bit more flexible then you can use that. But the problem is I can't really talk to you intelligently about that program today because I don't even know what the application looks like, right? So I can give you the broad strokes of it and we have a video coming out about that with those broad strokes and kind of go into the details of it. But yeah, is it a possibility? Sure. Will it fit your situation today, Robert? I don't know for sure. But when it comes out, we'll figure it out. Okay. What if Robert or anybody else is struggling with this problem and they have private loans? What can they do? Yeah. Now private loans are trickier, right? Because they don't have these forgiveness options. You are stuck on those loans until they are paid off. Now there's a question of how you're paying them off. Whether that's gonna be you pay them in full, you refinance for a lower rate, you negotiate a settlement or in the worst case scenarios when you come hell or high water, you're stuck in this position where you don't have any other outs, then maybe bankruptcy is the best option there. And that's true. I have a young lady. I think I told her story. She's down in Tennessee and she owes, you know, 60 something thousand dollars a year. She's 60 something years old and lives with her parents and she can't afford the loans because the interest rates are like 12% as well. And she makes like $40,000 a year. There's no way she's paying off these loans. So bankruptcy makes sense for her to deal with it so she can actually give herself a shot at peace. Because that's what she's really saying. She wants to pay back but they're not willing to work with her in a way that she can truly afford. And that's their prerogative as a lender. You made an agreement. You signed it. But then her prerogative too is to go ahead and file that bankruptcy and try to work out something whether it's getting rid of all of it or some of it so she at least can see the end of the road and have the peace that she needs to live her life. So back to Robert and his case. As you said, there's no, you know, forgiveness for people who are in there but is there any kind of protection for these people? Let's say they default on their loans. Do they get the same treatment as everybody else? Well, they're working on it, right? There was a news article. I think we shared a newsletter two or so weeks ago that was related towards lawmakers trying to outlaw the garnishment of social security payments. Right now that is a collection tool which makes sense because the federal government is paying you social security and you still owe them another debt. They should be able to offset that debt to recoup themselves, right? Then the counter argument to that is, dude, I'm on social security. I bring in $750 a month. You're gonna take 15% of that and you want me to live in this expensive ass world? So there are lawmakers working to try to get rid of that particular collection tactic but right now, no, there isn't special protection because you are retired. Okay, and finally then, if you were in Robert's position, what would you do? I would say you want to talk to your servicer, right? But it sounds like Robert has already talked to him and he's not getting the answers he needs. So he may want to talk to like someone a little bit more skilled or well-versed in these options. That could be me, right? You could schedule one-on-one with us. That could also be going on like subreddit groups and crowdsourcing that information. It could be using a website like the Institute of Student Loan Advisors. They offer free advice as well or it could be booking a consult with like student loan planner, whatever. I think you may just want to speak with someone who is more well-versed in all of the available options and can give you personalized advice looking at your loans versus just simply calling your servicer and getting someone who is effectively equivalent to like the person who handed you your waffle fries from Chick-fil-A that night. They don't really know how the waffle fries are made. They just know the is going to oil and they come out hot and tasty and delicious but they don't understand the whole process behind it. No shade towards me because there are some really dope ones but we also understand that if you were getting a great customer service experience you wouldn't even be on this channel giving me this information. You would already have it and be fine. Yeah, cool. So I think hopefully- Have you had Chick-fil-A fries before? I haven't. I've never even been to Chick-fil-A. Oh my God, Chick-fil-A fries are delicious. I don't even need no ketchup. I just need them salted and hot. One day, one day, make it happen. All right, is that anything else for Robert here? No, I think that's everything. Hopefully we've answered his question. All right, well, thank you so much, Robert for submitting your question. If you have a question, go ahead and you can sign up for our newsletter. We give you the opportunity to drop questions down there below. We also look at the comments here and try to pull those together as well but the best place to be able to try to get your questions answered is to sign up for our newsletter. Every week we deliver news on what's going on with student loans in a very plain English way so you can easily digest what's going on. It makes sense in this crazy world. With that being said, we'll see you next video. Peace.