Gardberg & Kemmerly, P.C. Attorneys at Law

I Owe Student Loan Money. Can the Federal Government Take My Social Security Disability Payments To Repay It?

The simple answer is yes, the government can take part of your backpay and monthly checks to repay any money that you owe the federal government, including student loan money. In 1996, Congress passed the Debt Collection Improvement Act. This Act allows the government to collect non-tax government debts by way of "administrative offset." For the first time, Congress allowed that Social Security disability funds can be used to satisfy outstanding federal debt. However, under this Act, the first $9000 received in any 12-month period is protected. Full-text of the 1996 act can be found at:

There are some exceptions to this rule, however. The Department of Education has a program by which your student loan debt can be discharged if you become totally and permanently disabled. It is hard to get, but something worth investigating if you believe you can meet the requirements. The following information is offered by the Department of Education:


  • Your student loan may be discharged (forgiven) if you become totally and permanently disabled. If a physician (doctor of medicine or osteopathy) certifies that you are totally and permanently disabled and you meet other requirements during a three-year conditional discharge period, your
    loan(s) may be discharged. This disability standard may differ from disability standards used by other federal agencies (for example, the Social Security Administration) or state agencies. Except as noted below for certain veterans, a disability determination by another federal or state agency does not establish your eligibility for this discharge.
  • You do not qualify for discharge if the medical condition or impairment existed at the time you applied for the loan, unless after that time, the condition significantly deteriorated and then you became totally and permanently disabled. In other words, an individual who was already totally and permanently disabled when he or she applied for a loan cannot have that loan discharged for that condition.
  • If you are a veteran, you will be considered totally and permanently disabled for the purposes of this discharge if you provide documentation from the U.S. Department of Veterans Affairs showing that you have been determined to be unemployable due to a service-connected condition. If you provide this documentation, you are not required to have a doctor complete Section 4 of this form or provide any additional documentation related to your disabling condition. Veterans who qualify under this standard are eligible for immediate discharge and are not subject to the standard discharge process that entails a three-year conditional discharge period.

Note: PLUS loans obtained by a parent on behalf of a student are not dischargeable on the basis of the student's disability.

What to Do:

If you believe you qualify for a discharge due to total and permanent disability, you and your doctor must complete and sign a discharge application form. (As noted above, veterans do not need to have a doctor complete the form.) You can request this form from the party that holds your loan, or you can download it now. Check a recent demand letter or bill for this loan; if you are requested to send payments to the National Payment Center in Greenville, TX, you should submit your completed form and required accompanying documentation (see form for details ) to:

U.S. Department of Education
P.O. Box 5609
Greenville, Texas 75403-5609

You may request a copy of the discharge application form by calling
1-800-621-3115. Note: in order to guard against fraud, the U.S. Department of Education (Department) will contact your doctor directly to confirm the nature and severity of your disability if you apply for a conditional disability discharge.

* Please note that this applies to federally funded student loans, NOT loans from private institutions.

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