Episode 25: Disability Discharge of Federal Student Loans with Heather Watkins & Persis Yu

Average student loan debt is nearly $40,000 — per person! This economic burden can massively impact all the other money moves you make in your life.

Luckily, there is a disability discharge program for federal student loans, and more people qualify than you might think. Plus, the program is getting a lot easier to navigate, with some big, positive changes promised starting in July 2023.

Three vertical images in a row on a light grey textured background. First image is Persis Yu in a white dress shirt and black blazer with her arms folded across her chest. Second image is Mom Autism Money Logo that reads 'Growing Wealth and Family'. Third image is Heather Watkins wearing a blue shirt and smiling at the camera. Text reads ‘Disability Discharge for Federal Student Loans with Persis Yu and Heather Watkins, Season 3 Episode 2, MomAutismMoney.com’

Today, we’ll talk to Heather Watkins, a writer and disability advocate who successfully had her student loans discharged through this program. We’re also joined by Persis Yu, Deputy Executive Director and Managing Counsel of the Student Borrower Protection Center, who has been instrumental in advocating for improvements to the program and for student loan borrowers at large.

By the end of this episode, you’ll have a better idea of who qualifies for this program, how it’s expected to function after this summer, and what it may or may not mean as your child is figuring out how to finance their own education. This episode is also great for anyone who may qualify for the discharge program due to their own disability — it’s not just for parents.


Show Notes

Follow Heather’s Work.

Utilize resources from Persis and her peers at the SBPC.

Where to get started with the Disability Discharge program for federal student loans.

Currently, loan amounts canceled through this program are not counted as taxable income. But that could change on Jan. 1, 2026 if this portion of tax law isn’t extended. Contact your congressperson and Senator to request that this provision be extended. You can find your senator and congressperson here.

And if you want to provide the specific provision you want to see extended to your representatives, it’s Section 11031 of the Tax Cuts and Jobs Act.

Connect with your local Center for Independent Living for resources here.

Heather references Mass Rehab Commission, which is a vocational rehabilitation program in Massachusetts. Voc rehab programs can help disabled people pay for college depending on your state. We covered voc rehab in this episode.

And you can find your state’s vocational rehabilitation program here.

Want to consolidate your old loans to take advantage of the recount of payments for student loan forgiveness that Persis was talking about? Here’s where you can find the consolidation application (must be done by May 1, 2023  or earlier to qualify for this specific program.)

Here is more detailed information on the IDR Account Adjustment and how it might affect you as a borrower.

Full Episode Transcript

Brynne: Welcome to another episode of Mom Autism Money. Today we’re covering disability discharge of federal student loans. That’s right. Depending on your child’s situation, they may be able to get their student loan balance erased. The program is a little bit confusing, but it’s gotten a lot better in recent years thanks to advocacy efforts.

And today we’ll be talking to one woman and disability advocate who got her loans forgiven through this program, Heather Watkins. We’ll also be talking to a lawyer who has been using her position as a literal legal advocate to push for better access to this program, Persis Yu.

Heather Watkins is a disability activist, author, blogger, mother, and graduate of Emerson College with a BS in Mass Communications. Born with muscular dystrophy, she loves reading, daydreaming Chocolate, and serves on a handful of disability related boards and projects, including Disability Policy Consortium, Advisory Board’s National Research Center for Parents with Disabilities and Open Door Arts. Heather is also a former chairperson of the Boston Disability Commission Advisory Board.

Publishing experience includes articles in MDA’s Quest Magazine, Mass Rehab Commission’s Consumer Voice Newsletter, and she’s also blogged for sites like Our Ability, Art of Living Guide, Disabled Parenting, Grubstreet, Rooted in Rights in Women’s Media Center. Heather’s short story, Thank God I have Muscular Dystrophy, was published in 2013 as a part of a compilation in the Thank God I am an Empowered Woman book series. Her blog, Slow Walkers See More, includes reflections and insights from her life with disability.

Persis Yu is the Student Borrower Protection Center’s Deputy Executive Director and Managing Council. Persis is a nationally recognized expert on student loan law and has over a decade of hands-on experience representing student loan borrowers.

Persis was previously a staff attorney at the National Consumer Law Center and the director of its Student Loan Borrower assistance project, where she led a team of attorneys to advocate on behalf of low income student loan borrowers. She co-authored NLCL’S legal treatise, Student Loan Law, and was a contributing author to the treatsies Fair Credit Reporting, Consumer Credit Regulation and Unfair and Deceptive Acts and Practices.

Prior to joining NCLC, Persis was a Hanna S. Cohn Equal Justice Fellow at Empire Justice Center in Rochester, New York. Her fellowship project focused on credit reporting issues facing low income consumers, specifically in the areas of accuracy, housing and employment.

Persis is a graduate of Seattle University School of Law and holds a Master’s of Social Work from the University of Washington and a Bachelor of Arts from Mount Holyoke College.

Without further ado, let’s get into all the nitty gritty details of disability discharge of federal student loans.

Brynne Hi, everyone. Welcome to Mom Autism Money. Today we’re going to be talking student loans and specifically, disability discharge for those student loans. And we are here today with two guests and guys, I dunno if you wanna take a second to just tell us a little bit about yourself.

Heather: Sure. I’ll dive in. This is Heather Watkins.

I am chiming in from Boston, Massachusetts. I am a disability rights activist. And a mother, blogger, writer and I serve on a handful of disability related boards and projects, including, um, the Disability Policy Consortium and on the advisory board for the National Research Center of Parents with Disabilities, and as a former chairperson for the advisory board for the Boston Mayor’s Commission for Persons with Disabilities.

And I identify as a Black disabled woman with a physical disability. And that is the lens and lived experience that I’ll be chatting with all today. So thank you for having me.

Persis: My name is Persis Yu. I’m the Deputy Executive Director at the Student Borrower Protection Center. I use she/her pronouns and I have been representing student loan borrowers both at an advocacy policy level and also through direct representation for over a decade.

I am also based in Boston, Massachusetts, and in addition to representing borrowers, um, directly, I served as the lead legal aid negotiator at the Department of Education, negotiated rule-making where we last rewrote the rules for the disability discharge program.

So thank you so much for having me here.

Brynne: Thank you both so much for being here. We’re really excited to delve into this topic. Heather, I know that. You have actually used this program in the past, the disability discharge program, and if memory serves, I think they actually reached out to you to initiate that process.

I’m wondering if you can tell us a little bit about what that experience was like, how it got started, how you kind of moved through it, bearing in mind that. Heather’s experience happened probably before these changes that were initiated — I think it was August of 2021 — but we would love to hear about your experiences with that program.

Heather: Sure, sure. This was, I got contacted in 2016 during the, like the tail end of the Obama administration, and I had looked into loan discharge prior to that, like years before that, and I was like, Hmm, I, I don’t think I’m eligible. You know, I went through and looked through all the criteria and I was like, yeah, this is, I, I don’t think I’d go through.

So I didn’t wanna go through like, the whole hassle of, you know, filling out the forms and, and just getting a rejection letter. So I just decided that, you know, I wouldn’t be, you know, it wouldn’t be possible for me. So well then years later, I started hearing a lot of chatter that the criteria had sort of increased or the, the latitude for who was eligible under the program.

The administration had just added more guidelines, I suppose, and, you know, I still kinda shrugged it off and, and didn’t pay too much attention to it. And then I, you know, I got some information in the mail and I’m still looking at, you know, looking it over and I’m thinking: This sounds really good. I wonder if this is just too good to be true.

I read it a few times and you know, it, it said that I was, I had been matched up through, you know, the benefits that I was receiving and I was a candidate to have my loans discharged. So I, I filled out the forms and then it said, um, that, you know, my income would be monitored for the next three years. So I was like, okay.

And so each year I had to fill out a new form, you know, um, detailing my income, signing that and sending it back. And then by the end of those three years, I got a letter saying that I was all set and my, all of my loans were discharged, including my parent loans, which I didn’t realize, you know, prior to getting that, all of that information in the beginning that that would be included.

But it was. So this was like a really, really welcome surprise and it helped me to navigate like the long-term planning because you, you think, you know, I have so much of this kind of debt. There’s only so much I can do in terms of planning day-to-day and budget. And so having that relief was such a, just a huge gift and, um, release for me.

And gave me so much more peace of mind. So that’s my experience in a nutshell.

Brynne: I’m really glad that those student loans got forgiven and it can be such a huge burden because these are one of those types of debt that even if you’re going through something like bankruptcy, student loans are extremely difficult to get forgiven or knocked off your record unless you’re using one of these federal programs.

I feel like there are still hoops to jump through. I heard about that three year, three year income monitoring.  

Heather: Oh yeah. And that’s, that can be a little bit intense. So for, for someone like myself who does a lot of freelance work, you’re kind of worried about like what you take on, what will send you over, what will you know, throw up a red flag, what will, you know, get a knock on your door or your a telephone call saying, you know, you can’t do that. So I was kinda nervous a little bit, but I knew, you know, to just take it easy, take a deep breath and just relax cause you’re so skeptical all the, all of the time with good news of that sort, you know, that has been my experience.

It’s like, is that, you know, is this too good to be true? But in, in fact was the gift that it was. So, you know, I just had to go with it and, and, and just kinda, you know, just chill as they say, you know, and believe that this is something that actually can happen for someone like you.

Brynne: No, that’s amazing. And that’s actually one of the questions on my list.

I’m wondering, you mentioned that they expanded who qualified for the program? I’m wondering in the language, from what I can see, you have to have a total and permanent disability. That’s the language used in order to qualify for this disability discharge. And I’m wondering specifically because our audience, you know, their kids are autistic, and what autism looks like is so different for everybody.

I’m wondering what that total and permanent disability actually looks like in terms of the law.

Persis: Yeah. And I’m happy to jump in there and, and certainly speak from the, the legal perspective of what this, of what this means. I mean, first of all, you know, it’s called the Total and Permanent Disability Discharge Program.

And I think that’s a terrible name. And it is, it is one that I think does lead to a lot of folks getting discouraged about applying for the program because first of all, it’s just not, doesn’t really accurately capture the program. So the legal definition of what you, the criteria that you have to meet is that you have to…

The, the standard of what it means to be totally and permanently disabled is to be unable to engage in substantially gainful employment for 60 or more months. So that is not forever. And this has actually been a problem with the program, um, is that folks have gotten discouraged cause they think well, I must be, you know, totally disabled for the rest of my life with absolutely no hope of, of ever, you know, being able to do anything meaningful and substantially gainful employment.

And that’s not true. That is not the standards that, um, that is used here. It has changed over time. It used to be much stricter and I think unfortunately the label that we put on it has not kept up with what the definition is. But, so the, the broad stroke is that, you know, the person, the borrower must have, you know, some kind of condition that keeps them from working for roughly five years, either past or present.

And so that can be demonstrated in a number of different ways. There’s a form that borrowers can use and they can take it to their doctor and their doctor can fill out the form. Um, and you know, this is, this is caused historically some issues because it did have to be a medical doctor. This is one of the changes actually that is coming about, starting in July, is that there’s gonna be a broader range of medical professions who can certify this form.

But to say that you meet this criteria of either of currently having a condition that has either kept you from working for the last 60 months or for future 60 months or total of 60 months.

So it could be like, you know, Two years in the past, three years in the future for whatever. But I think one of the pieces that has been really helpful is that there is also this connection to government ratings. So the, the standard for the education department is similar to the Social Security Administration.

It’s not the same, but it is very similar. And so there has been a recognition over time that you can use the records that social Security already has in order to identify people and identify folks who have met the criteria without having to jump through additional hoops. They’re continuing to work with the Social, social Security Administration to identify what those categories are.

There was the definition that led to the automatic data matches back in 2016 was for folks who had review periods of five or seven years. Or longer. And so they would match everyone who had social security records that met this criteria and then sent automatically, um, letters to say like, Hey, guess what you qualify, which is a process that Heather described.

And so folks were able to then return that paperwork and get those loans canceled. Um, they have expanded the categories or they are in the process of expanding the categories to include greater numbers of borrowers to capture, to, to better capture, uh, the folks who qualify. The other piece that I’ll say that’s really exciting about the new changes is that they’re automating it more.

So, you know, they sent out these letters in 2016 to several hundred thousand borrowers, but unfortunately, only about a third of the borrowers ever responded. And so what they realized was that, hey, we have a lot of people who qualify to have their loans canceled, but they’re not responding through the means that we’re communicating to them.

And so they’re now automatically canceling those loans. They’re also getting rid of that monitoring period, too. So the hoops are getting lower for folks to qualify. The other piece that I will say is that borrowers can qualify if they have, uh, disability ratings through the Veterans Administration. So that’s another process where the government already has a process of identifying folks with disabilities and they’re able to match those records to get this release to people a lot simpler, and a lot faster.

Brynne: That sounds like some exciting changes coming up around the corridor. I love the fact that it can be intermittent.

Persis: Well, I do want to clarify that it’s not quite, it does need to be continuous. 60 months do need to be continuous, but it is only 60 months. It is not like for the rest of your life or like for forever and ever and ever.

I guess that’s kind of what I would wanna clarify right there.

Brynne: Gotcha. Gotcha. Thank you. Yeah, that’s a huge difference.

Persis: Right.

Brynne: You mentioned that monitoring period is going away. Is that going away, uh, completely? Or is it just being shortened, or how and when is that happening?

Persis: Yeah, so actually they did get rid of it as part of the pandemic response was the first time when they eliminated the monitoring period.

And so what will happen is that the, the regulations have codified that, um, there will no longer be a review period for income going forward. And so the only thing that that will remain though is that there is this three, the three year period will still remain in which borrowers will not be able to take on new loans.

Or if they do take on new loans, that the, the loans that were canceled will be reinstated. So there is still a three year period, kind of like a watch period, but what they found was that a lot of folks had their loans reinstated because they didn’t complete the paperwork.

It was just so many hoops and so much bureaucracy, and it meant that a lot of people were kept on the hook for their loans that they shouldn’t owe because of, because of silly paperwork requirements that were frankly, pretty, you know, they were to onerous for a lot of folks to get through, that has been eliminated completely.

Heather: That’s really good to know. Wow. Yeah, and, and you know, I was just thinking about, uh, what you said about the language in the beginning and how that can be like, sort of keeping people from really pursuing this loan discharge. Cause that’s exactly what happened. I would, I, you know, initially read through all of that and was like, ah, this is just, you know, too cumbersome.

This is, this is just too involved. It doesn’t sound like I’m eligible. And I just kept saying nah. So I was so, you know, grateful when I received that paperwork saying, you know, you’ve been matched up. Because at the time, you know, I was receiving SSDI and they said I was automatically matched up to have the loans discharged.

So that was, uh, you know, it’s just a, a great big exhale. It was like, oh, this is wonderful, because again, it just makes for so much more relief added to your life and less of an economic burden. And, um, helpful in doing long-term planning. You benefit so much more when you’re able to contribute, you know, even in your, you know, better, in your family and your community.

So it’s, it’s, it’s also just a head scratcher why I see people, you know, pushing back about others who are eligible for, for this program, because I’m thinking they can contribute to the economy, you know, light bulb, you know, so I, I just don’t understand that kind of being upset about folks who are eligible versus, um, others who aren’t, and people not being able to see the bigger picture, you know, the wider lens.

Persis: I think that’s so important. And, you know, thinking about the impact that just the fact of debt has on so many people’s lives. You know, uh, I mean there’s been research this, this is not just student loan debt, but of course, uh, in particular with student loan debt, that it has a huge impact on folks’ mental health.

And there was actually this one fascinating study done showing that even people who weren’t making payments on their student loans, when they had that, those loans cancel. They were able to do better financially in other areas of their lives. And so I think it speaks to the weight that student loan debt has on folks and it’s so important to be able to, you know, relieve folks of this debt.

And in particular when we know that they’re not able to get the benefit of the education that they received for whatever reason, or that, you know, we know that they’re not gonna be able to pay it off, so why hold it over people’s heads forever? But I also wanna say to the, to the issue of like the language we use, I think that’s why it’s so important to have disability activists as a part of this conversation too.

You know, I’ve been in this area for over a decade, and this rule in particular has come up a number of times. And this last rule making that happened just a year ago was the first time that they had a disability advocate at the table. So people have been talking about you know the rules around how we treat borrowers with disabilities for decades without communicating with the people who were impacted by it.

And I think that’s why we had rules that didn’t make sense, that didn’t acknowledge the, the humanity or even reality of the disabilities that folks were facing. And so I am very excited about the new rules that we have. I don’t think they’re perfect. I still think that they could be better, but I think that they’re gonna go a long way into actually getting this relief to the folks who are entitled to it.

Heather: Yes, absolutely. I think that that’s, those are all great points. And I was also thinking about when you spoke about people having gaps in employment, that is just something that is so, such a, you know, um, a normalcy within the disability community itself. So, I mean, for instance, someone like myself who’s in need of care, was a caregiver to my, my dad for 11 years.

A mother and a community builder all at once. You may just have those gaps in, you know, your employment because your life might be calling for that. You might have to take time off not only for yourself, but maybe for a family member. And so, and those are things that, you know, might have to be explained to, you know, um, an a potential employer when pursuing different kinds of employment options.

And so that’s why it’s really key to have more employers and, uh, industries understand, the disability community as being complex and having range and nuance and that becomes more beneficial to the organization and the community as a whole. Those kinds of just, just those kind of understandings and considerations.

I tell people all the time, you want disabled persons in your community, in your classrooms, you know, in your places of employ, religious settings because of the, the lens and the lived experience and the higher sensitivity levels, adaptive skills, analytical skills. So many of us know, um, logistics like nobody’s business, and we’re often, you know, out of the box thinkers.

And have contingency plans. And so all of those kinds of skills are applicable to many settings. If you wanna, you know, upend orthodoxy, then choose the people who live that way, who’s very existence is resistance.

Brynne: Oh my gosh, I love it. And I feel like that’s something that I’ve always stressed out about, um, this, this type of like employment discrimination and I feel like, I’ve been stressing out about it more since, uh, not necessarily when the pandemic first hit, because I feel like, as a society  when everybody felt affected, we really built some accommodations into our employment structures.

Um, but in the time since as some of those accommodations have been removed, I felt so sad about the fact that there’s so many more obstacles now. Unnecessary obstacles, it seems like because we’ve proven as a society that we can provide the accommodations, we’ve just retracted our willingness to actually do it.

It seems like these past 12 or 24 months, I don’t know. I think about that a lot with workforce participation lately.

Heather: Yeah, definitely. Because it seems like, you know, overnight, um, because of the pandemic we had, you know, not only employment sectors, but like educational ones that seemingly, you know, became accommodating to the masses, right, because of the pandemic.

But prior to that, disabled persons, you know, um, whether they had an apparent non apparent or chronic illness, had been asking for such accommodations for eons. As soon as this, you know, the pandemic hit so many more people were able to participate and apply for different kinds of jobs and view theater and entertainment through online access.

So yeah, that was a game changer, right? And then now we’re starting to see some of that being, um, defaulted, you know, defaulted back to the way it was pre pandemic with more in-person stuff happening. So that’s a little bit, uh, you know, depressing and it really just, you know, lessens the options for participation.

And I’m not sure why you’d wanna do that. You’d want to have increased options for a, you know, wide variety of folks to participate. So, you know, we have to keep sounding that alarm and raising that kind of awareness.

Brynne: A hundred percent. A hundred percent. Now Heather, you mentioned that some of the student loans you got forgiven were parent loans.

Were those loans you had taken out for your child’s education?

Heather: Yep. The, the plus loans. So I had taken out those and you know, I was in that place where you’re paying for your own. And paying for your child. So, you know, there was, there’s so many of us who exist that way, too, where we’re trying to pay off our own loans, but, you know, now our, our kid is in college and we’re paying bills off as well as trying to manage our everyday household finances.

So, yeah, it, it was, it be, you know, became quite daunting.

Brynne: Yeah absolutely. And the reason I ask is, so we’re talking today about federal student loans, first of all. If you have private student loans through a private lender, they’re not eligible for this program. But if you have federal student loans, I’m wondering if there are specific types of student loans that qualify for you for this program. I kind of doubt it’s just a, a blanket over all student loan types ever for everybody. But I guess that’s my next big question is just what are kind of the nuances as far as which loans can be forgiven and who has to hold the loans in order for them to qualify?

Persis: So fortunately, this is one of the areas in which the many very confusing distinctions about student loans are, are less important. You know, in the federal loan space, this has come up a lot during the pandemic where you have the federal family education loans, which are the older loan products.

Those do qualify for this program. In addition to the direct loans and, and any loans owned by the Department of Education. Perkins Loans also do have a disability discharge program as well. So, fortunately, this is accessible for the federal loan products, whether or not it’s graduate plus loans, parent plus loans, or staffers loans.

So fortunately, federal loan borrowers do have access to this. There are some private lenders that say they provide disability discharges. It’s a little spotty, it’s a little hit or miss. I, I’ve worked with some borrowers who have tried to access those program. It’s gonna be lender by lender, but I certainly think that folks that they do have the private loans, they should still ask for it.

Um, it is becoming more, accessible to folks though not universal, unfortunately.

Brynne: Now, what if I was a parent who, you know, was sending my kid to school, I knew that, you know, they had a disability, that there was a high likelihood because of ableism and discrimination, that even after they graduated there would be issues maintaining consistent appointment, perhaps even for that 60 month period.

And I’m trying to strategize the way that I take out loans. If I took out a parent plus loan, and say that I didn’t have a disability myself, but my child did. Would those loans also be included in this or is there, is that a bad strategy?

Persis: So as of, as of now, there’s definitely a movement to try to expand access for parents who take out loans for folks with disabilities.

Um, that is currently not available. But there, there have been bills in Congress to try to expand the program to allow that, but unfortunately not, not at this point.

Brynne: Gotcha. My next question is, one thing that we’ve had come up is we will hear some people say, when your disabled child goes to college, don’t worry about the sticker price.

Take out those max federal student loans, and because of that parent, parent plus student loan designation, don’t take them out in your own name. Take them out in your child’s name. Don’t worry about them holding debt because it can be forgiven. I’m wondering what you think of that strategy.

Persis: I have two separate thoughts kind of going through this.

I think for a lot of folks, the reality is, is that if a student is to pursue an education, debt has to be involved. Um, and, and I think that’s just the reality for too many people. You know, we don’t have a great system of funding higher education, so one has to figure out how to survive one way or another, and so, You know, I, I wanna put that kind of in one bucket, is that for a lot of people taking on debt just isn’t a choice if their child wants to get an education.

And so I wanna just acknowledge that reality to start with, that this isn’t a choice for everybody. Um, I do wanna say that, you know, unfortunately our student loan system is incredibly broken as well, and so I worry about encouraging people to take on debt or I worry about the fact of debt in people’s lives, rather because the systems that are supposed to deliver debt relief to folks have too often failed people.

Um, we’ve seen this in particular, I think the most public example of this is with the public service loan forgiveness program, where folks have been promised forgiveness of their loans after 10 years of public service. Only to find that 98% of people who applied were denied. And so we have right now, uh, this waiver program that just happened to try to begin to rectify that, but we haven’t fundamentally changed the way that our student loan system works, where I feel secure enough to guarantee that anybody is going to access the releif that they may be even entitled to because the system is just so hard to navigate and it’s run by servicers that frankly have let people down way too often.

Brynne: Absolutely. Absolutely. That makes sense.

Heather: I was just thinking about going forward, if I wanted to pursue graduate school that I would not go unless I got a, like a bulk of grants because I just don’t wanna take the chance of getting caught up again and having, you know, more debt. So these are all just considerations for the future, you know, being grateful that those were discharged, but then going forward thinking, you know, what are my options later?

So I’m glad we’re really having this conversation.

Brynne: For sure. Student loan debt is a heavy, heavy burden, not just financially, but I feel like psychologically too, it’s really hard to pursue your other financial goals when you have this gray cloud looming over you. When I went to school, that’s I, Heather. I love that.

That’s exactly what I did. I did grants and scholarships. I was like, I’m avoiding debt at all costs. Does bring up an interesting question though, during this waiting period, so let’s say that you do go to school. And you are expecting to get disability discharge at some point just because you’re familiar with your own career history or you’re familiar with the way you’ve traditionally been treated in employment settings, so you can kind of guess that you might qualify in the future. In that interim period where you’re demonstrating that you’re not working for 60 months during that time.

It’s great that the student loans will be discharged eventually, but during that time, I’m assuming people should be prepared to be making those payments on a regular basis. Is that accurate? Or?

Persis: So there’s a couple different things to flag for that situation. If you and your medical team believe that this is going to be a 60 month, um, period, there’s actually no reason to have to wait.

It does not have to be that you’ve complete, like there is no clock to say that you have checked off 60 months and then you must, and then you can apply if, if it is reasonably foreseeable that you think it’s, you won’t be able to work for the next 60 months, you can apply right now. For folks, I mean, I think one of the things that does, does hang people up is that, you know, again, there is this form and it says you have this total and permanent disability that you can’t do things, you know, and so it, I think a lot of people don’t want to apply, and I think that’s a legitimate choice for folks to make.

That they’re not ready to apply, that they’re not ready to say that this is, you know, what, how they, they see the next 60 months of their lives. And so there are other, other options. For many people if they’re not working, probably the best option is an income grant payment option because your payments can be as low as $0 if you have no income.

Or under the current standard, which is the discretionary income threshold is 150% at the federal poverty level. If your income is below that amount, your payments are zero, and that counts as a, as a on time payment. You know, your credit report will say that you’ve been making payments on this loan, so that is an option for folks.

If there is a payment and that’s not affordable, there are also other deferments and forbearance options that folks can use, as well. There’s no reason to make payments that one can’t afford. Um, I think it’s also important to note that you don’t get refunds of these amounts. If you do make payments thinking that you might have these loans canceled through the disability discharge process eventually, it may not be to your advantage financially to make payments at this point.

I mean, you want to avoid default because defaulting on the loans has pretty, pretty bad consequences. It can lead to loss of social security disability benefits. It can lead to the loss of, you know, tax refund if you qualify for the earned income tax credit.

This is probably one of the, the biggest negative consequences that the clients I’ve worked with have faced is that they lose their, their entire EITC, which can be thousands of dollars. And so, you know, it’s worth avoiding default. You wanna absolutely do that, but there’s a lot of ways that one can do that without necessarily having to make payments, or especially if those payments are unaffordable.

Brynne: We’ve touched on this a little bit, but I’m wondering if there are any areas of advocacy, either within the disability community or the student loan space, or any types of legislation to look out for in these coming months. I know there’s been some pretty significant changes over the past 18 or so months here, but kind of looking forward.

Persis: Yeah, so I think, like I mentioned before, you know the rules for the disability  discharge program are changing and they are automating a lot of these processes. They are expanding the categories that you know of the matches with the Social Security administration. And so folks should, you know, should be on the lookout for those changes.

And I think they should be on the lookout to see if those changes don’t happen. This is one of the things, it’s great to put things in writing and to say that you’re gonna do good things for folks. It’s another to actually make sure that people get the benefits that you’re promising. Um, and so that’s a thing that I, that I hope people will look out for, lookout see if those changes are happening, if they’re happening in their communities with folks that they know.

Things that people need to be advocating for is making them better. Right? It will be much better in July than it was last July, but that doesn’t mean it’s perfect. And I think the, I think the Department of Education and the administration still needs to be pushed on the ways that they should be delivering relief to borrowers and working on this program to make it as beneficial and to really match the reality of what borrowers with disabilities need.

I think that’s the piece you, I think they’ve made a great step forward, but I think they can always, there can always be improvements to that process. The other thing I do wanna flag is that right now disability discharges are not taxable, but the tax provision that is, um, the part of the tax code that is keeping that non-taxable is going to sunset in a couple of years.

And so we want to make sure that people don’t get a bill from the IRS because they have their loans canceled, right? So that’s a thing that people need to be talking to their representatives, to their senators about, to ensure that people are not getting an IRS bill in a couple of years. Um, when that, when that tax provision sunset.

Heather: Well, that’s a really good heads up.

Persis: Yeah, and it caused a lot of confusion for borrowers before this was a change that came, I guess it’s not that recent. Back in 2017 was the, was when they changed the tax code to protect borrowers who had their loans canceled due to disability. But the way, the way that, you know, the way that Congress works, they don’t do things permanently.

They do them in cycles. And so there needs to be a lot of pressure to make sure that this doesn’t happen again. You know, there are actually ways to deal with these tax bills that don’t, that aren’t necessarily mean paying a tax bill, but there aren’t a lot of resources to help folks navigate that system.

Again, we have, you know, systems upon systems where people have hoops to go through just to get the relief that they’re, they’re actually entitled to under law. So we wanna make sure that those benefits are protected.

Heather: Is part of this being held up right now through the Supreme Court, not being able to follow through on the student loan discharges at the moment?

Persis: So President Biden announced a plan to cancel up to $20,000 of student loan debt for individual borrowers who made less than $125,000 a year, or families less than $250,000 a year. And so that particular debt relief has been held up in court. There are a number of groups who have sued the administration for this plan, and so two of those cases, have resulted in, in stays that have prevented, uh, the administration from actually carrying out on that, on that relief.

And so that is the Supreme Court has granted cert on those cases, and so it will be held earlier in 2023.

That is not holding up disability discharges though, to be clear. So the other types of relief that are available to federal student loan borrowers, whether or not that’s a disability discharge or public service loan forgiveness or cancellation through income driven payment, for example, or any number of the other reasons.

You know, we’ve heard about borrower defense. Um, folks who have been defrauded by their school, for example. Um, so the, those cancellation programs are allowed to go forward. It is just this up to $20,000 of cancellation from August. Of course that will be hugely beneficial for a lot of folks. We know that of the 40 million people who qualify through the income guidelines, 20,000 of those would be, you know, completely debt free.

And so there are a lot of folks in all communities who will, who would benefit from that relief. And so that is being held up, but the other programs are not.

Heather: Thank you so much for that clarification, because that, that just, it’s just so important when I also think about so much of the connective tissue, right?

Because when you, you don’t really have to worry about that portion of income and how much it can be dedicated to ,you know, your housing, your healthcare, other aspects of your education, and just your local economy, it would be so great if, again, if people would widen the lens and really see how having that kind of relief really helps us all, you know?

Persis: I think that’s such an important point. I mean, you know, through a lot of the, the last couple years where the president has been weighing whether or not to provide this debt relief program that he did eventually announce back in August, our organization did a fair amount of polling about folks’ perceptions of cancellation and whether or not they supported it or not.

And I think one of the pieces that was really interesting to me, is how, you know, of course amongst people with student debt, there was, you know, a lot of support for student debt cancellation. But even amongst people who did not have student loan debt, people who didn’t go to college, uh, or people who had paid off their student loan debt support for debt cancellation was really high.

And I think it really does highlight how this is a community issue, right? So, I think almost everybody knows somebody with student debt. Everyone cares about somebody with student loan debt. It is not, you know, just an issue that impacts borrowers, but it impacts their families, it impacts their children, um, and it does impact their neighbors and communities.

And so I think, I think that folks, actually, there are folks who do understand that, but unfortunately there are, there are some people who either don’t understand that or are trying to use the political and legal process to prevent folks from getting this relief, you know, for their own political gain.

But I do think that there are a lot of people who do recognize how this is a community issue, that communities are stronger when your neighbor can participate in the local economy, when your neighbor is, you know, healthy and secure. And student debt is a barrier to folks, you know, growing their businesses.

If they’re business owners. Buying homes. And, and paying off other debts as well. I do think that I, I agree that it’s such a big community issue.

Heather: Yes, definitely. I think it’s just one that people really ought to pay attention to it, you know, it speaks to quality of life issues and concerns that if they were alleviated we could dedicate energy, time, and attention elsewhere, you know, to impacting and how we impact our local community and our wider, greater economy. So it’s just really, really important.

Brynne: Absolutely. When you were paying off your student loans prior to the disability discharge, you had mentioned you were on SSDI. With all of these programs that have income limits and asset tests, and then to have the student loans on top of that, even if you’re on an income-based repayment program.

I have to imagine that doesn’t feel great . Um, because there is, I mean, yes, there are, there is employment discrimination. It does make it hard to work, but there’s also very real, uh, systemic barriers to being able to fully build out your personal finances when you’re interacting with some of these programs.

Heather: Sure. I mean, I’m still am on SSDI and I still, it, it’s, you know, it’s doing a lot of management, you know, and juggling what jobs are good for you, what makes sense with your healthcare and. health insurance because, you know, I have a disability that not only impacts my mobility, but my respiratory muscles as well.

So I use, you know, a piece of durable medical equipment in the form of a ventilator that assists my breathing when I’m sleeping at night, similar to some someone, uh, who may have, uh, sleep apnea, what they might use. And so my health insurance covers a large portion of that. And without that, then I could risk respiratory failure.

And not having that paid for and so that I wouldn’t be able to use it at night and, um, wake up with, you know, a decent amount of oxygen running through my system, you know, um, so I don’t have brain fog and, you know, and, uh, have too much carbon dioxide buildup. All of those important things that are, make me vibrant and, and healthy.

So it is a, it is and has been quite, um, a juggling act. You know, really just paying attention to, um, what I’m doing and, and managing my household finances. So you become quite adept, right? And, um, skillful in analyzing what you’re doing and, and projecting and, and figuring out ways of making the ship run smoothly.

Those are some skills I’ve acquired over the years. I haven’t been without their challenge, their challenges, but, I think I’ve benefited in ways that I might not have ever conceived. So those are just more skills that I try to apply to my advocacy work and any of the, um, boards and projects I’m on. So, you know, who knew?

Brynne: That’s a really good point, that it helps bring me skills that you can bring to bring to other, other areas of your life as well. I love that.

Persis: You know, you mentioned, um, like ways that folks should be advocating and I think one of, I think this is another reason why it’s so important to have disabled voices at the table.

Both because you bring, you bring those skills, but I think it’s also important to highlight how much work it is to navigate all of these systems that able bodied folks, or folks who have never experienced poverty or folks who have never had to engage in these systems, just don’t understand. And so I think there’s both the skills that you learn of having to navigate that’s, um, important to bring to these systems. But also the knowledge about navigating these systems. It’s always shocking to me how many policy makers are in positions having never had to engage in the systems that they oversee or that they’re writing policies for.

And so I think having the knowledge about, you know, understanding how much labor is involved in working all of these different systems is so important. And I think about, you know, the number of years I’ve, I’ve spent looking at government forms and how poorly they’re designed for people to actually use and clearly aren’t designed by people who would ever have to use them.

And so I, I think that that’s an important voice to bring both for the, the skills that you’ve learned, but also to ensure that people understand like the hoops that they’re making people jump through.

When I started doing this work, I remember one of the first clients that I worked with was working to, to get one of these disability discharges, and it had taken her over seven years to get through the disability discharge process.

She had submitted application after application, and they kept getting rejected for paperwork issues. None of them were ever, because, you know, she wasn’t, you know, quote unquote disabled enough. It was all because… Oh, in this one instance, she accidentally used a form that had expired and so they needed her to send a new one.

In another instance, her doctor had completed, uh, his signature on the wrong line. At one point, her loans were transferred and she had sent it to the wrong place, and so it literally took her seven years to get through the disability discharge process, which is why I think, again, coming back to the changes in automating and matching and finding ways to match you know, borrowers with, with already existing records is so important.

You know, it, it seems like in some ways it seems like a minor thing. It’s just an administrative process. But I think it is these processes that are for many folks, the, the barrier of actually, you know, getting through the system.

Brynne: Oh my gosh, yes. Like these processes are the barriers themselves.

Persis: And I think in some ways it’s cause of this idea. And this has come up a lot in the, throughout this cancellation, you know, I. We should learn a lot of lessons from the rhetoric that’s been used to talk about student loan borrowers and cancellation over the last couple years because there’s this idea that only some people deserve the relief.

And so, you know, our government often puts up these barriers. Right. These paperwork barriers, these income guideline barriers to force people to go through the process to prove that they’re deserving enough of this relief. I think that’s one of the, the ways that we need to challenge the system to say like, I mean, first of all, you know, people should be able to get an education without having to deal with this burden, but you know, to the extent that they have it and we have relief programs, people should be able to access it.

It seems, it seems so simple. But really the systems in themselves impose the greatest barrier in many, in many ways.

Brynne: No, a hundred percent. A hundred percent. That’s another thing is like sometimes it feels like all of this extra paperwork is another full-time job on top of, on top of everything else that you have to do, or if you want to have full-time employment.

It’s like, well, I also have to allot time in my day to spend time on the phone , figuring out what went wrong with the paperwork or where to send this next thing, and it can just turn into a further hindrance that just pushes you down further rather than helping as much as it should. Of course, it’s worth pursuing.

The amount of debt relief you get is worth the effort. I feel like, especially with these new laws surrounding the process, it’s gotten a lot easier in recent years, but it is definitely. It’s definitely a challenge and I think we see that across so many systems.

Persis: Yeah. And you know, and I think the, it has gotten better in recent years and I think I attribute that to a lot of borrowers speaking up about their experiences.

And you know, one of the things, you know, we’ve talked about many the ways that having debt is harmful to folks and I think one of the things has that has prevented folks from kind of speaking about it is the stigma that’s attached to having debt. But in talking about the experience of having student loan debt, I think that has really transformed the conversation in the last couple years, which is why we’ve seen a lot of big changes, is that the voices of people with student loan debt has made a meaningful difference in changing the way that our government treats people with student loan debt.

And so I think we need to do that more. I think more folks need to be open about their experiences navigating these systems and what it means to have taken on this debt or this opportunity that you didn’t take on because you didn’t wanna have this debt.

You didn’t wanna have to live with this burden. And so I do think that the voices of folks who are impacted have been transformative in this process.

Brynne: Absolutely, and I’m really glad you brought that up. I mentioned that, you know, when I first started writing about money, I was lower income and I also mentioned that I didn’t take out student loans, and I was so petrified of that debt.

I don’t necessarily regret my decision, but my decision not to pursue my education initially the first time around traditionally absolutely impacted my earning potential. So when I hear people, you know, I feel like it’s a vocal few that are upset about the, uh, certain forgiveness programs or discharge programs.

I’m just kind of puzzled by it because it really, even if you were one of those people who did not take on debt, you, there’s no way. There’s a huge portion of the population that you’re still negatively impacted by these issues. Whether you owe money to the government or not. It still affects your income potential.

It still affects how you finance higher education as an individual within this larger system. So looking at things like this student debt relief, I feel like is just a positive net win for everybody.

Persis: Absolutely. And you know, I’d love to get to a place where, you know, folks could feel like they just needed or wanted to get an education and that was a thing that was accessible without, you know, these high stakes of, of debt kind of looming over them.

Brynne: Absolutely. Well, Joyce and I like to wrap up these things by just acknowledging that we don’t know what we don’t know. So I’m wondering if there’s anything that we haven’t yet touched on today that you guys feel like is really important for a people to know. I guess in this situation it could be, you know, somebody with a disability who’s looking to go off to college or holding those student loan debts in their own name.

Or even a parent who’s looking, you know, I’ve got a kid in high school, and I’m trying to figure out these next few years with their higher education. Is there anything that people should know that we just haven’t really touched on yet today?

Heather: I’d definitely say to research, um, and make sure you’re connecting with maybe your centers for independent living, maybe your, um, rehab commissions like here in Massachusetts.

We have, uh, the Mass Rehab Commission, places like that, that do a lot of advocacy work that deal with a lot of disabled students, have parents connect with guidance counselors that are typically kind of keyed in. Uh, I know my, my guidance counselor many years ago was a, another disabled black woman who was, had told me a lot about mass rehab and, and the program.

So I was really grateful to connect with them and have them pay portion towards my tuition, my books and fees. So I’d say do things like that. Just make sure that you do a lot of research. Get background information to connect with local organizations that have a lot of information and referrals that they can, um, maybe make use of, are, are some ways to that I think are really, really helpful.

Persis: So I think, you know, the way you frame this as you don’t know, what you don’t know is, is a really important, is a really important phrase for the student loan system as a whole. And its a really complicated system to navigate through. And unfortunately, there’s too many places where the, the people who are supposed to be your trusted guides to get through the system have really let borrowers down.

But I do think it is important for folks to know that there are options out there, certainly, you know, I think that the expansions to the disability discharge program are, are very important, but also don’t let folks pigeonhole you into that’s your only option. There are other options. I think income driven repayment is one of the most important options for folks that that’s getting more attention, but needs to have more, and I think it winds up actually being potentially one of the most beneficial tools for folks to navigate the student loan system.

And so the unfortunate reality is that people do need to be their own advocates through this system. But there are tools available, you know, the government websites studentaid.gov does have a number of resources on it. It is getting better to use than it used to be.

Aand there are other, other folks around. We have our website, which is uh, cancelmystudentdebt.org, which is available, and we try to provide resources for folks and other nonprofit organizations try to provide resources as well. So it is important to know that there are resources available, but sometimes you do have to kind of search them out yourself.

Brynne: Thank you guys both so much for being here. Before we go, I’m wondering if you might let us know one upcoming project you’re excited about, one thing you’re working on that’s really lighting your heart on fire. Also where we can kind of follow some more of your work as time goes forward.

Heather: My website is SlowWalkersSeeMore.com.

It’s my, um, circumstance and personal mantra, and I get really excited about a lot of the projects I’m involved in. One being a peer researcher with the National Research Center for Parents with Disabilities and our upcoming study that revolves around Black women and Latinas who have physical disabilities on their pregnancy experience and outcomes.

So we’re looking at year two, so that’s something that I’m really excited about. And a lot of the conversations revolving around reproductive healthcare and just navigating systems and, and how we can, uh, move forward and include, um, disabled persons again, who have apparent not apparent and chronic illness in these kinds of conversations going forward.

Persis: One of the things that I, that I am actually very excited about in the world that has not gotten a lot of attention is that there is this process that the Department of Education is going through called the IDR Account Adjustment. What this is going to do is it’s going to recount borrowers’ payments and capture them in terms of income driven repayment.

And that’s super wonky and super technical. But what effectively it’s going to do for borrowers is it’s going to get them closer to cancellation of their loans, or in many cases it’s for people who have had older loans, it’s gonna get their loans totally canceled. Um, so if you can’t tell, I get really jacked about the fact that people, people getting out of debt and, and having their loans canceled.

And this is a really important way that people who in particular, who have had had debt for decades, um, and this is a population we don’t talk about enough, is the growing older population of student loan borrowers and borrowers who’ve held onto their debt for 10, 20, 30, sometimes 40 years.

And so through this new program that the department has announced, a lot of the folks are gonna get credit for time that they, that they didn’t get counted beforehand, and will move them closer to cancellation. One of the things I do wanna flag for folks who do have older loans, who took out loans many years ago, more than a decade ago, that they may have these, um, FFEL loans, the federal family education loans.

Which have been excluded from so many different programs. And if folks consolidate those loans by May 1st, they will be included in this, in this recount. And you know, we have over 4 million people in this country have been in repayment, uh, for more than 20 years. And so if folks, you know, take the steps, unfortunately they do need to take many will need to take a step of consolidating their loans.

We’re gonna see a lot of people, um, debt free by the end of 2023.

Heather: That’s so good. Thank you so much for your work. That’s great.

Brynne: Truly, truly. And thank you both so much for joining us.

Brynne: Thank you so much to Persis and Heather, and thank you to all of you for tuning in every week. If you enjoy this podcast, please leave a five star review wherever you’re listening to help more moms find the financial education we’re so sorely lacking as mothers of autistic kids.

We’ll see you all next week as we discuss some surprising results from Drexel’s Autism Institute that reveal autistic individuals from middle income households actually have the worst health outcomes over the course of their lives.

Why is this happening? You’ll just have to tune in to find out. See you next week. Bye.

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