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PSLF payments while on short-term disability?

Home Student Loan Management PSLF payments while on short-term disability?

  • Avatar cityfox 
    Participant
    Status: Physician
    Posts: 3
    Joined: 02/07/2017

    I’m currently making monthly student loan payments under the PSLF program.

    I was recently diagnosed with a significant medical condition that will require intensive treatment over the next several (~6+?) months. I’m hospitalized now and will be for several weeks. I have been placed on short-term disability at the hospital when I am employed.

    According to the PSLF website, a qualifying payment is one made [among other criteria]:

    while you are employed full-time by a qualifying employer.

    Technically, I pretty sure I am still a full-time employee, just currently unable to work. Does anyone have any experience whether my payments going forward during my period of disability will count toward PSLF?

    #179316 Reply
    Avatar jhwkr542 
    Participant
    Status: Physician
    Posts: 1022
    Joined: 02/15/2016

    While no experience, I doubt these payments would count.  You need to work 30+ hours/week to be considered full-time, so whoever certifies your employment would probably note it (unless they don’t).

    #179392 Reply
    nachos31 nachos31 
    Moderator
    Status: Physician
    Posts: 421
    Joined: 01/12/2016

    I would encourage you to reach out to one of the students loan specialists who advertise on WCI and get their input and what steps you should take.

    #179501 Reply
    ChadCFP ChadCFP 
    Participant
    Status: Financial Advisor, Website Sponsor, Small Business Owner
    Posts: 67
    Joined: 10/04/2017
    Disability Insurance

    I’m currently making monthly student loan payments under the PSLF program.

    I was recently diagnosed with a significant medical condition that will require intensive treatment over the next several (~6+?) months. I’m hospitalized now and will be for several weeks. I have been placed on short-term disability at the hospital when I am employed.

    According to the PSLF website, a qualifying payment is one made [among other criteria]:

    while you are employed full-time by a qualifying employer.

    Technically, I pretty sure I am still a full-time employee, just currently unable to work. Does anyone have any experience whether my payments going forward during my period of disability will count toward PSLF?

    Click to expand…

    This is a tricky one and I can’t get to a good final answer. However, you are still employed full time even with a disability event. For example, when you go to certify at the end of the year, your employer wouldn’t say that you worked for 3 months and then took disability for 9 months. They would just mark that you were employed at that time.

    Again, I am not 100% certain on that answer but I don’t see why not.

    The other unique aspect could be once your income drops, you can submit updated information and ask your servicer to recalculate your payment amount at any time. If your scheduled monthly payment under an income-driven plan is $0, those “payments” of $0 still count towards the required 120 separate, monthly payments. Any month when your scheduled payment under an income-driven plan is $0 will count toward PSLF if you also are employed full-time by a qualifying employer during that month.

    Jan Miller and Travis Hornsby, both listed on the WCI recommended page, could be good contacts to confirm my thoughts above.

    Chad Chubb, CFP ® | WealthKeel LLC
    https://wealthkeel.com/wci | Gen X & Gen Y Physicians

    #179988 Reply
    Avatar jz 
    Participant
    Status: Physician
    Posts: 622
    Joined: 01/09/2016

    Will your disability payments be regarded  as income or compensation?  Best wishes.

    #179990 Reply
    ChadCFP ChadCFP 
    Participant
    Status: Financial Advisor, Website Sponsor, Small Business Owner
    Posts: 67
    Joined: 10/04/2017

    Will your disability payments be regarded  as income or compensation?  Best wishes.

    Click to expand…

    Yes, they would still be counted as income. However, income still drops but 60-70% or more depending on your coverage which is why it is a good idea to have them review current income.

    Chad Chubb, CFP ® | WealthKeel LLC
    https://wealthkeel.com/wci | Gen X & Gen Y Physicians

    #180142 Reply
    Liked by jz

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