Student Loan Plan: Medical Discharges and Keeping Current

Michael Lux Student Loan Blog, Student Loan Plan, Student Loans 0 Comments

In this edition of the Student Loan Plan, we will take a look at Tim, whose daughter is struggling to keep up with Navient and who may be able to get her loans medically discharged.  If you want tips for dealing with your student loans, contact us.

Tim writes:


I am writing hoping that you might be able to provide some advice. My daughter had taken out a student loan several years ago to attend school. Because of ongoing health issues she has not been able to stay employed for any amount of time. She is doing a little better and has gotten enrolled back in school. Because she has no income the student advisor at the school was able to get her into the program with very little cost to her. The problem is that she has a loan with Navient that has a high payment and she is unable to make the payments right now. She wants to honor the debt when she is able but they don’t seem to be willing to work with her. She is trying to get them to either defer the payments while she is in school or get them lowered to a small amount while she tries to complete her education.

She had gotten a co-signer when she got the loan originally. The person that co-signed is now living on social security and is in no position to help with the payments.

As it is right now they are not going to get any money because neither my daughter or her co-signer is able to make any large payments. I would like to be able to help her but I have had my own financial issues and don’t have any funds left after paying my own bills.

The reason I am writing is that I am hoping that you can offer some advice as to how she might be able to get them to work with her. Any advice you can offer will be greatly appreciated!

One more thing I wanted to mention, when she was working with Navient they had told her that she was approved to have her entire loan forgiven. This was because her doctor had given her a letter saying that she is disabled and not able to work. As it turns out they had somehow put all of her personal information into someone else’s account. They also put the other person’s personal information into her account. She got a call one day and the person told her that she was really sorry and explained what had happened. She was told that she was not approved to have the loan forgiven. She was not told any details as to how it happened. I have to think that this violates at least one if not several privacy laws. I am wondering if she might be able to use this information to get them to be more helpful. I would think a lawyer could take this information and get a lot more money from them than she owes. Problem is that lawyers want to be paid up front.

Thanks a bunch for any assistance you can offer!

The First Priority

In this situation, your first priority should be investigating the forgiveness due to disability.  This is an absolute game changer.  If you can make this happen, it is by far the best option.

The interesting part here is that it seems the loan was forgiven, but mistakenly applied to another account.  Before we get into the things we know, we will first cover the things we don’t know.  We don’t know what happened to cause this mistake.  We don’t know what or if any privacy laws were violated (this is definitely a great question for an attorney with some expertise in the area).

What we do know is that at some point someone decided the standards were met to forgive the loan due to disability.  Figuring out exactly what the standard for disability discharge is an important step.  Assuming it is a private loan, it should be a term of the loan, but it could also be company policy.  The more information you can get about this process, the better.  This is one of those times that it pays to ask lots of questions of your loan servicer.  Instead of asking, can I get my loan forgiven because of disability, ask how does one get a loan forgiven for disability.  What paperwork needs submitted?  Who makes the final decision?  What is the standard for determining disability and loan forgiveness?  Then take all your newfound information to try and get your daughters loans discharged.

If Things Get Bumpy

This could be a very frustrating process.  Considering what you have already been through, it probably has long since passed the point of frustration.

There is an Ombudsman for Navient, who serves as kind of an internal customer advocate.  In cases such as this, you may be able to get some assistance.  Our article on contacting the Sallie Mae/Navient customer service advocate should help.

If you feel that something fishy is going on with Navient and you want to push the issue further, you might consider filing a compliant with the Consumer Financial Protection Bureau.  The nice thing about this process is that Navient is forced to respond to your specific issue.

Moving Past the Disability Discharge

If you completely strike out on the loan forgiveness aspect, you might try looking into the Navient Rate Reduction Program.  This program was created especially for borrowers who are struggling to keep up on their loans.  The way it works is that your interest rate is lowered to 3% or lower in order to help you keep up with the loan.  Each year you can reapply to the program to keep your rate manageable.  This option is far better than a deferment or a forbearance because your loan balance will actually go down each month as opposed to just becoming a bigger issue each month.  If you are interested, check out our guide to signing up for the Navient Rate Reduction Program.

The One Obvious Solution

So far we have focused on longer term solutions to the debt.  In the short-term, the fact that she is currently enrolled in school could help.  Depending upon her enrollment status, she may not have to make any payments while in school.  This will again depend upon the terms of the loan and Navient policy, but it could be a short-term solution if none of the long term approaches work out.

Final Thought

There are a lot of directions this particular issue could go.  It may seem overwhelming, but you can break things down into steps and work your way through it.  Step one is to figure out the different routes you want to explore.  Make a list of all of them.  Step two is to collect information.  Use google, make phone calls to Navient, send emails, do whatever you can to learn and absorb the information.  Step three is to refine your plan.  Figure out what approach will work best for your family.  Be realistic about what is possible from a financial perspective.  Finally, be diligent.  If one customer service representative says no, don’t give up.  Keep learning and keep trying.


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