The Department of Education is partnering with the Department of Veterans Affairs to contact disabled veterans who are eligible for student loan forgiveness. Last month, the Education Department announced it will send eligible veterans applications for a total and permanent disability discharge (TPD discharge) in the mail.
The TPD discharge has existed for many years. Many borrowers who are eligible for this option, including tens of thousands of veterans, are unaware this option for student loan forgiveness exists. This is why the Education Department and Veterans Affairs Department are teaming up to notify thousands of disabled veterans who are eligible. The Education Department will cross reference data in the National Student Loan Data System with information from the Veterans Affairs Department to identify eligible borrowers.
There is more good news for veterans who are eligible for this student loan forgiveness option. For many years, disabled borrowers who received a disability discharge would have to pay income taxes on the amount forgiven. Some borrowers received tax bills for more than $60,000. Under the new tax law, permanently disabled borrowers do not have to pay federal income taxes on forgiven higher education debt.
Who Else Is Eligible for a TPD Discharge?
Veterans are not the only group of federal student loan borrowers who can receive a TPD discharge. Unlike Public Service Loan Forgiveness (PSLF), all types of federal student loans are eligible for a TPD discharge. FFEL Loans, Direct Loans and Perkins Loans are eligible. TEACH Grant service obligations can also be eligible for a discharge.
If you are not a veteran, then you can show the Education Department that you are permanently disabled in one of the following two ways:
- If you are receiving Social Security Disability Insurance (SSDI) or Social Security Insurance (SSI) benefits, you may be able to send the Education Department a Social Security Administration notice of award. The notice of award should state that your next scheduled disability review will be within five to seven years from the date of your most recent disability determination. Your Benefits Planning Query (Form 2459) may also show this information. It is also possible the Social Security Administration already contacted the Education Department about your eligibility status. In this case, you may have already received a notice from Nelnet in the mail.
- Your physician could certify that you are totally and permanently disabled. In this case, your physician must certify that you are unable to perform gainful employment due to a physical or mental disability that can be expected to result in death or that has lasted for a period of no less than 60 months. The disability could also be eligible if it is expected to last for a period of no less than 60 months. Your physician must be licensed to practice medicine (M.D. or D.O.) in the United States or its territories.
Nelnet is the student loan servicer that assists the Education Department with TPD discharges. If you want to apply for a TPD discharge, then you would need to send your application to Nelnet. A representative can also fill out the application on behalf of disabled borrowers. For either option, it is critical that you submit the correct documentation that supports your disability claim.
Questions About Student Loan Debt Relief? Contact Our Kansas City Student Loan Lawyers
The Kanas City student loan lawyers at The Sader Law Firm can help struggling student loan borrowers look at options for debt relief. You can reach out to us by calling (816) 281-6349 or by using our online case review form.