Earlier this year, the Department of Education took steps to identify federal student loan borrowers with permanent disabilities by using Social Security data. According to the Department of Education, it identified 387,000 borrowers who are permanently disabled. Nearly half of the 387,000 were in default on their loans. Many disabled borrowers who have defaulted were at risk for having their Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) garnished.
The Department of Education’s move was an attempt to identify permanently disabled borrowers who were eligible to discharge their student loans. Although prior attempts had been made to identify borrowers, many were unaware they qualified for a discharge or had trouble submitting paperwork.
The Department of Education now sends paperwork to eligible borrowers to guide them through the steps of a total and permanent disability discharge. If you are permanently disabled and have not heard from the Department of Education, here’s the process of how this discharge works.
How to Receive a Total and Permanent Disability Discharge
The TPD discharge only applies to Direct loans, Federal Family Education Loans (FFEL), Federal Perkins Loans and Teacher Education Assistance for College and Higher Education grants. If you owe private student loans, you are not eligible for a TPD discharge from the Department of Education.
There are several ways to show you are permanently disabled. Keep in mind, the following documentation is not sent directly to the Department of Education, but to Nelnet, the servicer that handles TPD discharge requests.
- If you are a veteran, you can provide Nelnet with documentation from the Department of Veterans Affairs showing you are unemployable due to a service-related disability.
- You can submit proof of SSDI or SSI benefits. Your notice of award for SSDI or SSI benefits should state that your next review for continued benefits will be within five to seven years of the date your most recent determination.
- Your physician can submit documentation that you have a physical or mental impairment that can be expected to result in death or has lasted for not less than 60 months or is expected to last for 60 or more months. This documentation should show that your disability has kept you from engaging in paid work that involves significant physical or mental activities. Also keep in mind that once your physician has signed your documentation, that you must finish your application within 90 days.
To begin the process of applying for a TPD discharge, fill out the first steps of the application online. You can also print application materials or request them by calling Nelnet (888-303-7818). If for any reason you need assistance gathering and filling out this paperwork, your assistant will need to complete the Applicant Representative Designation Form.
After you have requested that you wish to seek a TPD discharge, Nelnet will contact your loan holders and instruct them to suspend collection activities. This process will last while Nelnet determines your eligibility (a period of up to 120 days). Within this 120 days, you are required to fill out the TPD application and submit documentation showing proof of permanent disability.
If you are denied for a TPD discharge, Nelnet will notify you by mail with the reason for your denial and steps you can take to request a re-evaluation of your case.
We hope this guide can help disabled people who are in need of a student loan discharge. Living with a permanently disability is challenging enough. Having SSDI and SSI benefits that you depend on for your survival garnished is unacceptable.
The Kansas City bankruptcy attorneys at The Sader Law Firm can help struggling student loan borrowers find solutions for managing their debts.