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Consequences of a disability discharge of student loans?

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A friend of mine has a bunch of student loans from Navient.  Some are federal; others are private.  But he managed to get on Social Security Disability for some medical conditions and think he may have a shot at getting them to discharge his loans due to disability.  The catch is that according to Navient, credit report would read, "paid with disability" for the discharged loans.  We are talking about roughly $150k as the grand total of all student loans.  While his health is pretty bad right now, he would like to go to graduate school should his condition improve in the future.  And if he does go to graduate school, he will need student loans to make it through.  

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Unless you get lucky, no judge is going to discharge student loans just because you are on social security disability. Especially not if that person is healthy enough to even contemplate future graduate school.

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Lots of discussion about this a little while ago here: https://www.fatwallet.com/forums/finance/1524580

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Stubtify said:   Lots of discussion about this a little while ago here: https://www.fatwallet.com/forums/finance/1524580
  
Oh, I forgot that I asked this before.  I guess at the rate things are changing, maybe something new has evolved?

FYI - To my understanding, Navient themselves would do the discharge, so no judge or court would be involved, but I could be wrong.

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You can get the federal loans discharged, but I think the process takes at least 3 years now...(see how PSLF applicants may be faring recently....at least its 3 not 10 or more) and it will be taxable income in the year forgiven...so either plan to do away with that through bankruptcy with the rest of the private loans (rules change every day it seems...) or get deferments for no payments on the (presumably) low income SSDI until it makes sense to do so

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collegestudent2017 said:   You can get the federal loans discharged, but I think the process takes at least 3 years now...(see how PSLF applicants may be faring recently....at least its 3 not 10 or more) and it will be taxable income in the year forgiven...so either plan to do away with that through bankruptcy with the rest of the private loans (rules change every day it seems...) or get deferments for no payments on the (presumably) low income SSDI until it makes sense to do so
  
Yeah, taxes can really get people.  If I am allowed to post this, someone pointed me here a while back (possibly a way to get out of tax problems from student loan discharge if you are low income), https://howtogeton.wordpress.com/2017/04/07/how-to-escape-tax-pr...

I didn't know about the 3-10 year thing.  I'll have to look into that.

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Gauss44 said:   
collegestudent2017 said:   You can get the federal loans discharged, but I think the process takes at least 3 years now...(see how PSLF applicants may be faring recently....at least its 3 not 10 or more) and it will be taxable income in the year forgiven...so either plan to do away with that through bankruptcy with the rest of the private loans (rules change every day it seems...) or get deferments for no payments on the (presumably) low income SSDI until it makes sense to do so
  
Yeah, taxes can really get people.  If I am allowed to post this, someone pointed me here a while back (possibly a way to get out of tax problems from student loan discharge if you are low income), https://howtogeton.wordpress.com/2017/04/07/how-to-escape-tax-problems-from-student-loan-discharges/

I didn't know about the 3-10 year thing.  I'll have to look into that.

  I was just saying disability discharge is like 3 years (I mean paperwork takes time....and they have to "verify" you're not just disabled for a little bit etc.) PSLF is non taxable forgiveness after 10 years in certain jobs with payments being made (120 total) and there is talks that that promise may not continue, and certain payments/jobs are being considered as not counting years after they've been made....btw nice resource

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Holy crap - $150k in student loans, supposedly can't work, collecting disability, and trying to figure out how stiff the lender yet still preserve the ability to borrow even more for graduate school?  Anybody else see a problem here?

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dcwilbur said:   Holy crap - $150k in student loans, supposedly can't work, collecting disability, and trying to figure out how stiff the lender yet still preserve the ability to borrow even more for graduate school?  Anybody else see a problem here?
  Yes. The amount is far too low....and I missed that. The problem will be that he is disabled NOW, and if he gets loans in the future, that condition must be WORSE to get the discharge.(good luck with that) I don't recall seeing any restrictions on discharge status for getting NEW student loans-you can't have defaulted, and discharge is not default. What is in a few years? In the next 15 this insanity will be blowing up so unless his goal is to make so much he isn't really disabled anymore, what is the point? Pay for the grad school later with the tax savings on super cheap school later on if its for pleasure/lifetime learning

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dcwilbur said:   Holy crap - $150k in student loans, supposedly can't work, collecting disability, and trying to figure out how stiff the lender yet still preserve the ability to borrow even more for graduate school?  Anybody else see a problem here?
  
The problem, aside from wanting to potentially dodge responsibility for his debt, is what does he plan to do with the alleged education he's received so far?  I mean, between the resume and the credit report, who would want the risk of hiring him with this kind of track record? Kinda defeats the point of even having an academic education.

Apologies if this is an ex-military person, or a potential terminal case; The way you paint it, though, it sounds as if your friend woke up with bad dandruff and a limp and decided SS Disability would be a nice option.

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Do you share the apartment with this person?

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