How To Prove Your Eligibility
If you need to prove you are eligible for a TPD discharge, you must have one of these three documents of proof, according to Federal Student Aid:
Once you have one of the required documentations, here’s what’s next:
Important Things To Know About The Loan Discharge Process
There are a few important things to know about the federal student loan debt discharge program. For example, there is a three-year post-discharge monitoring period.
You will be required to repay your discharged loan if any of the following events occur:
- Your annual earnings from employment exceed poverty guidelines
- You take out a new federal student loan under a direct loan program or TEACH grant
- You receive another disbursement from the direct loan program or TEACH grant, and you havent returned the disbursement in 120 days
- You receive a notice from SSA stating you are no longer disabled
Another important thing to know is that loan discharges can receive different tax treatment:
- received before Jan 1, 2018, the discharge may be considered income for federal tax purposes
- received from Jan 1, 2018, to Dec 31, 2025, the discharge wont be considered income for federal tax purposes
You should contact a tax professional if you are worried about the tax implications of forgiving your student loans. There are important things to know about the loan discharge process, so be sure to read all the information carefully before you apply.
You can also get help from a veterans representative if you need assistance completing your application.
Make It A Priority To Avoid Missing Payments
Whether or not you believe you qualify for student loan forgiveness, it’s important to continue to make your monthly payments on time every month to avoid potential damage to your credit score. Remember that you’ll receive all of your payments back if you qualify for forgiveness, as long as they were made after the effective date of your disability determination.
While you’re at it, monitor your credit regularly to make sure no other issues pop up that could threaten the health of your credit.
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Applying For Federal Student Loan Forgiveness For Disability
If you think you meet the requirements of TPD and want to apply for student loan forgiveness due to disability, contact Nelnet about your options. You can call them at 888-303-7818 or email them at You can also fill out an application or have someone complete it on your behalf.
When applying for student loan disability discharge via TPD, youll be provided with the info you need to fill out the application. Nelnet will then check to see if your loans are eligible for forgiveness. Finally, they will contact your loan holders and notify them that loan payments should be suspended for 120 days.
At that point, youll be informed you can stop making payments and should fill out the application and submit it for processing. If you do not hand in your application within 120 days, your student loan payments will resume.
Once youre finished with your application, you can send it along with any supporting materials to:
U.S. Department of EducationP.O. Box 87130Lincoln, NE 68501-7130
Student loan forgiveness for disability applications are typically reviewed within 30 days. If youre approved for discharge due to SSA documentation or certification from a doctor, you will be subject to a three-year review period that starts on the date that your discharge is finalized and approved. During the review period, your income and any changes in your status will be monitored.
When Is Discharge Available
There are several programs that allow individuals to receive loan forgiveness for disability. These programs are divided into two categories: Borrower Assistance and Direct Loan for Disability. Borrower Assistance Programs Disability-specific programs are called borrower assistance programs. Such programs are typically offered by nonprofit organizations or other private financial institutions. Some of the major providers of such programs include: Alliance for Rehabilitation Services offers loan repayment for employees who suffer from an illness that prevents them from holding a job, as well as employees with a disability that requires regular medical care or other assistance with living independently.
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Student Loan Forgiveness For Disability: How To Discharge Debt
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How Does Student Forgiveness For The Disabled Work
Student loan forgiveness is granted to people with Total and Permanent Disability or simply TPD.
People with TPD are unable to work due to a serious illness or long-term disability.
However, student loan forgiveness is granted only to TPDs with the following loans or service:
- FFEL Program loan
- Federal Perkins Loan Program loan
- Direct loan
- Not everyone who has TPD is eligible for a complete discharge
Disabled student loan borrowers may be eligible for loan forgiveness but theres a massive hidden tax.
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Ruling From The Department Of Veteran Affairs
Veterans can qualify for student loan forgiveness if the VA indicates to the DOE that the veteran has a disability that is “100% disabling,” causing the person to be unemployable. If this is the case, the DOE will notify eligible veterans that they qualify for a student loan discharge, and if veterans believe they qualify but were never contacted, they can submit an application with information from the VA proving their disability status.
How To Apply For Total And Permanent Disability Loan Discharge
The Department of Education proactively works to identify student loan borrowers who qualify based on VA or SSA criteria, so there’s generally no application necessary for those who meet those qualifications.
If you’re found to be eligible, the Department of Education should send a letter to notify you and provide a date by which you can tell the agency that you don’t want the discharge. If you don’t respond, your loans will be automatically forgiven.
If you haven’t received such a letter and believe you qualify or if you think you’re eligible based on a physician’s certification, you can submit an application with your documentation to Nelnet, the servicer that handles TPD cancellations, via the TPD discharge website.
You can also apply by phone or email if you prefer. If this is the case, payment requirements on your federal loans will pause for 120 days, so you have time to submit any supporting documents.
If your disability makes it so you can’t apply on your own, someone can help you. Before they apply on your behalf, though, you and your representative will need to complete an applicant representative designation form, which you can download from the TPD Discharge website.
Once your application is submitted, Nelnet will explain the review process. You won’t be required to make monthly payments while the application is being reviewed.
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How Do I Request For A Total And Permanent Disability Discharge
There are three options for requesting for a TPD discharge:
1. Apply online
2. Print the application
3. Request via phone or email
Note:
*Only a certified and U.S. licensed M.D. and D.O. can sign for your supporting documents. So this doesnt include other medical professionals.
*If you live outside the U.S., your physician should be U.S. licensed. But if you have a local physician, he/she can just work with a licensed physician in the United States.
Watch the clip below from Jonathan Ginsberg to know more about student loan forgiveness for disabled:
Although student loan disability forgiveness can be a great help to those who are eligible, the forgiven amount is still taxable. Not all people with TBD get their loans discharged.
Is Forgiveness The Same As Discharged Student Loan Debt
According toStudentAid.gov., the terms forgiveness, cancellation, and discharge mean nearly the same thing. If youre no longer required to pay on your loans due to your job, this forgiveness or cancellation. If youre no longer required to pay on your loans due to a total and permanent disability or the closure of the school where you received your loans, this is discharge.
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Monitoring Period After Discharge
If your application is approved and you’re not a veteran, you’ll go through a three-year post-discharge monitoring period, during which your student loans could be reinstated. The federal government will reinstate your loans if they find that you:
- Have received annual earnings that exceed the poverty guidelines for a family of two.
- Have gotten notice from the Social Security Administration that you are no longer disabled.
- Have taken out a new federal student loan through the Direct Loan or TEACH Grant programs.
- Have received a federal loan disbursement from a loan taken out before the discharge was approved and didn’t return the loan disbursement.
- Failed to submit annual income information.
Which Loans Are Eligible For A Disability Discharge
Borrowers of the following loans can get a federal TPD discharge for disability:
- William D. Ford Federal Direct Loan Program loans
- Federal Family Education Loan Program loans
- Federal Perkins Loans , or
- Teacher Education Assistance for College and Higher Education Grant service obligations.
Other loan programs and private loans have their own discharge rules.
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Disability Discharge Tips And Faqs
Q: Is it possible to work and still be eligible for a disability discharge?A:Even though the government may say otherwise, the answer should be yes. You are allowed to earn less than 100% of the poverty line for a family of two during the three year watch period after a final discharge is granted. This allows you to explore whether you can get back in the workforce.
Q. Can I qualify if I have a disability that prevents me from working in the occupation for which I was trained?A: Not if you are able to work in a different occupation. To be eligible, your disability must make you unable to engage in any type of substantial gainful activity.
Q: Is evidence of a Social Security or Veterans Affairs disability decision sufficient to qualify for a student loan discharge?A: For V.A., yes, if you have been determined to be unemployable due to a service-connected condition. For Social Security, in some cases, yes as of July 1, 2013. If you are receiving Social Security Disability Insurance or Supplemental Security Income benefits, you can submit a Social Security Administration notice of award for SSDI or SSI benefits stating that your next scheduled disability review will be within 5 to 7 years from the date of your most recent SSA disability determination as a way of proving eligibility for a disability discharge. You may do this instead of submitting a certification from your doctor.
Q: Can I apply again if I was denied the first time?
1. Pay stubs showing year-to-date income,
Important Limited Pslf Waiver
On October 6, 2021, the U.S. Department of Education’s office of Federal Student Aid announced a temporary period during which borrowers mayreceive credit for payments that previously did not qualify for PSLF or TEPSLF. This change will apply to student loan borrowers with Direct Loans,those who have already consolidated into the Direct Loan Program, and those who consolidate into the Direct Loan Program by October 31, 2022.For more information on the limited PSLF waiver, visitStudentaid.gov/pslfwaiver.
Key Points: Summary of Changes Under the Limited PSLF Waiver
The qualifying employment requirement has not changed.
Learn more about how this limited PSLF waiver may impact your loans.Act soon the waiver ends October 31, 2022.You can also contact us with questions.
Note: Servicing for the PSLF Program is managed by another federal student loan servicer.If you enroll in PSLF, your eligible loans will be transferred from Great Lakes to the PSLF servicer.If your loans have already been transferred to the PSLF servicer, you can log in to their borrower portal to track your PSLF payment counts.
Also note: if you received Teacher Loan Forgiveness, under the limited PSLF waiver, the period of service that led to your eligibility will count toward PSLF. Refer to StudentAid.gov’s Limited PSLF Waiver page and contact us to discuss whether you may be eligible to receive PSLF under the temporary waiver. Act soon the waiver ends October 31, 2022.
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How Do I Apply
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Apply With Veterans Affairs Documentation
Many people join the military to take advantage of the many VA education benefits. This includes the GI Bill, which covers the cost of in-state tuition for up to 36 months.
If you are a veteran applying for a TPD discharge, you must include documentation of your disability from the VA. This information will show that your disability is both complete and related to your military service or that your disability prevents you from meaningful employment.
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Request A Deferment Or Forbearance
It is important to make a plan to pay your student loans. You can request payment deferment or forbearance. In most cases, your loans will continue to accrue interest.
Forbearance allows borrowers to either make smaller payments or pause payments for up to 12 months.
Deferment pauses payments for up to three years. Those who qualify for deferment have economic hardships, expensive medical bills, military service, or have returned to school.
How Do I Know If My Loans Have Been Forgiven
If the Department of Education determines that you qualify for a TPD discharge, you’ll receive a notification that your loans have been forgiven or your TEACH Grant service obligation does not need to be completed. You’ll also receive a refund of any loan payments you made on or after the effective date of your disability certification.
If you qualify due to SSA documentation or a physician’s certification, note that you will be subject to a three-year monitoring period. If you don’t meet certain conditions at any time during this period, your loan or grant service obligation will be reinstated.
Reinstatement may occur if any of the following happens during the three-year period:
- Your annual earnings from employment exceed the poverty guideline amount for a family of two in your state.
- You receive a new federal student loan under the direct loan program or a new TEACH Grant.
- You get another disbursement from a direct loan or TEACH Grant that was first disbursed before your discharge, and you don’t return it within 120 days.
- The SSA notifies the Department of Education that you’re no longer disabled or that your next scheduled disability review will no longer be five to seven years from your last determination.
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