Can I Get Total And Permanent Disability Discharge (TPD) On Student Loans?

For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.

Kat Tretina Personal Finance Writer

For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.

Written By Kat Tretina Personal Finance Writer

For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.

Kat Tretina Personal Finance Writer

For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.

Personal Finance Writer Rachel Witkowski Correspondent/Editor

Rachel Witkowski is an award-winning journalist whose 20-year career spans a wide range of topics in finance, government regulation and congressional reporting. Ms. Witkowski has spent the last decade in Washington, D.C., reporting for publications i.

Rachel Witkowski Correspondent/Editor

Rachel Witkowski is an award-winning journalist whose 20-year career spans a wide range of topics in finance, government regulation and congressional reporting. Ms. Witkowski has spent the last decade in Washington, D.C., reporting for publications i.

Written By Rachel Witkowski Correspondent/Editor

Rachel Witkowski is an award-winning journalist whose 20-year career spans a wide range of topics in finance, government regulation and congressional reporting. Ms. Witkowski has spent the last decade in Washington, D.C., reporting for publications i.

Rachel Witkowski Correspondent/Editor

Rachel Witkowski is an award-winning journalist whose 20-year career spans a wide range of topics in finance, government regulation and congressional reporting. Ms. Witkowski has spent the last decade in Washington, D.C., reporting for publications i.

Correspondent/Editor

Updated: Aug 24, 2021, 3:20pm

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Can I Get Total And Permanent Disability Discharge (TPD) On Student Loans?

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It’s something no one wants to think about, but accidents and illnesses are painfully common. The Social Security Administration (SSA) reported that 25% of 20-year-olds will become disabled before they reach retirement age.

If you’re unable to work, you’ll struggle to make ends meet, let alone keep up with your student loan payments. However, there is some potential relief available to borrowers with federal student loans through the Total and Permanent Disability Discharge (TPD) program.

Qualified borrowers can apply to have the government forgive their outstanding student loans, eliminating their obligation to repay the debt.

What Is a Total and Permanent Disability Discharge?

The federal TPD has been available to student loan borrowers since the Higher Education Act of 1965 was passed into law.

Under this program, federal loan borrowers that meet the government’s definition of “totally and permanently disabled” can have 100% of their outstanding loan balance discharged.

When you apply, you submit your application to Nelnet , the federal loan servicer that manages the TPD program. If your application is approved, your monthly payments are suspended, and you typically enter into a three-year monitoring period. If you are still disabled at the end of the three years—and are not expected to recover—and have not received income or loans, the government will forgive your remaining loan balance.

Who Is Eligible for TPD Discharge?

Unfortunately, many people don’t realize they’re eligible for TPD and lose out on significant relief. According to the National Student Loan Defense Network, approximately 589,000 student loan borrowers were identified by the SSA as eligible for TPD. Over 60% of eligible borrowers did not apply for TPD, usually because they didn’t know the program existed or didn’t understand the application process.

That’s why it’s so important to carefully review the program’s criteria. To be eligible for TPD, you must meet the program’s definition of total and permanently disabled. Under the Higher Education Act of 1965, that means borrowers must be unable to work due to physical or mental impairments that are expected to last for 60 months or more.

The disability information is verified in different ways.

TPD Requirements for Veterans

If you are a veteran of the U.S. armed forces, you can qualify for TPD by providing documentation that shows the Department of Veterans Affairs (VA) issued you a disability determination due to either of the following reasons:

Note: In August 2019, then-President Trump signed a presidential memorandum that expanded TPD for veterans. Under the new rules, veterans that were determined by the VA to be 100% disabled or unemployable due to disability will automatically qualify for loan discharge through TPD unless they opt out.

TPD Requirements for Social Security Recipients

The government uses the SSA system to find borrowers that are eligible for TPD. If the SSA decides you are eligible, they will send you a notice of your eligibility for the program containing next steps. However, the SSA may miss you under certain circumstances, or a mail error can prevent you from receiving the notice. If that happens, you can apply by filling out a discharge application and submitting supporting documentation.

If you receive Social Security Disability Insurance or Supplemental Security Income, you may qualify for TPD by submitting a copy of your SSA notice of award or benefits Planning Query that shows your next disability review date. To be eligible, your next disability review date must be at least five to seven years from the date of your late SSA disability determination.

TPD Requirements for Those Diagnosed by a Physician

If you don’t qualify for TPD under the rules for veterans or Social Security recipients, you may be eligible if you are diagnosed by a qualifying doctor—a Doctor of Medicine (M.D.) or doctor of osteopathy or osteopathic medicine (D.O.) licensed to practice in the United States.

To apply for TPD, your physician will have to fill out part of your discharge application stating that you are unable to work due to physical or mental impairments that will result in death, has lasted continuously for the past 60 months, or can be expected to last for the next 60 continuous months.

What Student Loans Qualify for TPD?

Borrowers with these federal student loan types are eligible for TPD:

If you have private student loans, you are not eligible for the federal TPD discharge program. However, some major private student loan lenders—including Discover, Laurel Road and Sallie Mae—will forgive your remaining balance if you become permanently disabled. Contact your lender directly to find out what their policies are for loan forgiveness.

How to Apply for Student Loan Disability Discharge

To begin the application process for TPD, follow these steps:

  1. Visit DisabilityDischarge.com. DisabilityDischarge.com is the official TPD program website. On the site, you can find answers to common questions and start the application.
  2. Contact Nelnet . Contact Nelnet to inform it of your plan to apply for TPD. Nelnet will temporarily pause your payments for 120 days to give you time to gather the necessary information and submit your application. You can reach Nelnet by calling 888-303-7818 or by emailing disabilityinformation@nelnet.net.
  3. Collect documentation. Along with your application, you’ll also have to submit supporting documentation, such as a disability certification from your physician, your SSA disability determination or VA discharge paperwork.
  4. Fill out the application. You can begin your application online. You will have to print it out to complete it, and then you can mail, fax or email the application and supporting documents to the Department of Education:

U.S. Department of Education
P.O. Box 87130
Lincoln, NE 68501-7130
Fax: 303.696.5250
Email: DisabilityInformation@Nelnet.net

If approved, you’ll receive a notification, and you’ll enter into a three-year monitoring period. In any of the following circumstances, the government will reinstate your loans and you’ll have to repay your debt:

Issues to Look Out For With TPD

If you are eligible for TPD, the program can provide you with a significant amount of financial relief. It will completely eliminate your debt and remove that weight off your shoulders.

However, there are some things to keep in mind:

Future Borrowing

If your loans are forgiven through TPD, your borrowing options in the future may be limited.

Federal Taxes

The amount the government discharged through TPD was previously taxable as income for federal tax purposes. However, a new law was implemented that said loans discharged through TPD on or after January 1, 2018 are not taxable as income for your federal tax return. That rule is set to expire on December 31, 2025, so future TPD program participants may have to pay federal income taxes.

State Taxes

Depending on the state where you live, the amount discharged through TPD could be subject to state income taxes; that’s why some borrowers eligible for TPD opt out of the program. If you’re concerned about the impact loan forgiveness would have on your tax bill, consult with a tax professional.

Other Options for Student Loan Borrowers

If you have federal student loans but don’t qualify for TPD discharge, there are ways to make your debt more manageable:

If you’re ill or have been injured and can’t afford your loan payments, contact your loan servicer right away to discuss your options. There may be financial hardship assistance programs you can use to lower or suspend your payments while you recover.