Father's Student Loan - Best Course of Action

[NefertitiX]

Hi All,

My Dad took out a student loan in the late 80's-early 90's and defaulted on it. Now, he is disabled and unable to work so his only income is his monthly SSI check. Recently he received a letter from the Dept. of Ed. informing him that they have "assigned" his debt to West Asset Management for immediate collection. From what I've read in this forum thus far it seems there is no SOL on gov't. backed student loans...is that correct? Based on the above, does he have any options? All advice is much appreciated.

Thanks,

Nef.

[LynnInMN]

Is he permanently disabled?? The following are the government guidlines.

What is the Department of Education's standard?

In order for your loan to be forgiven, you must be totally disabled, and the injury or illness must be expected to continue indefinitely or result in death. Even if your condition prevents you from working in your chosen field, you are not considered permanently and totally disabled so long as you can attend school, earn money, or get another job somewhere.

If you were disabled when you took out the loans, your condition must have deteriorated substantially, rendering you permanently and totally disabled.

What if they do find me totally and permanently disabled?

If they decide to forgive your loans, there is some good news for you. Not only do they cancel the unpaid balance and interest of Defense, Direct, and Perkins Loans, but the cancellation applies retroactively, as well. The lender has to return any payments that you made after the date you became certifiably permanently and totally disabled.

How does discharge of consolidated loans work?

You can have a consolidated loan discharged if you can show that you became permanently and totally disabled after you took out the underlying loans. It will not be held against you if you consolidated them after your injury or illness occurred.

Is there anything I can do if my disability is not total or permanent?

The Department of Education should help you obtain a loan deferment or forbearance so that you can at least temporarily stall the payments.