The infamous student loans are known to have ruined lives of many graduates. Struggling to make their ends meet, a huge number of student loan borrowers wish their loans to be discharged. Although, it is quite difficult but there are some situations in which student loans can be completely waived off. One of them is Total and Permanent Disability of loan bearer .
A total and permanent disability (TPD) discharge can relieve borrowers from William D. Ford Federal Direct Loan (Direct Loan) Program loan, Federal Family Education Loan (FFEL) Program loan, and/or Federal Perkins Loan Program loan or complete a Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation.TPD discharge is not a simple process but there's a reason for it. According to a report by Department of Education's Office of the Inspector General in 1999, 23 percent of the borrowers who received a disability discharge between 1994 and 1996 joined a job and started earning shortly after the discharge was completed. Because of this the Department of Education had to make the process strict, so that people don’t misuse it.
One can apply for TPD discharge in following conditions:
1. He/she is a veteran, who can submit documentation from the U.S. Department of Veterans Affairs (VA) showing that the VA has determined that he/she is unemployable due to a service-connected disability.
2. If he/she is receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, his/her next scheduled disability review will be within five to seven years from the date of most recent SSA disability determination.
3. If he/she is unable to engage to work due to a medically determinable physical or mental impairment that:
Can be expected to result in death,
Has lasted for a continuous period of not less than 60 months, or
Can be expected to last for a continuous period of not less than 60 months.
(All the above conditions should be backed by supporting documents.)
Below are steps involved in complete TPD discharge process :
1. Inform Nelnet ( works on behalf of ED concerning TPD discharge requests) by phone (1-888-303-7818 ) or e-mail (firstname.lastname@example.org). In response a partially filled application form in PDF will be sent to by Nelnet. One can also apply online directly through www.disabilitydischarge.com or can download the PDF form, fill it and send it to : U.S. Department of Education P.O. Box 87130 Lincoln, NE 68501-7130.
2. Nelnet will review records of the applicant and will contact his/her loan holders and instruct them to suspend collection activity on his/her loans for a period of up to 120 days.
3. If Nelnet does not receive the application within the 120-day period, loan holders will resume collection activity on his/her loans, and applicant will again be required to make payments.
4. If the applicant wants his/her application to be completed and submitted by a representative he/she has to complete an Applicant Representative Designation form.
5. If the request has been approved, applicant and the holders of his/her loans and/or TEACH Grant service obligation will be notified about the approval.
6. Loan holders will be instructed by Nelnet to return any loan payments received on or after his/her disability date to the person who made the payments. For this purpose, his/her “disability date” is the effective date of the VA’s determination that he/she was unemployable due to a service‑connected disability. In case the applicant submitted SSA notice or a physician certificate effective date will be the date on which Nelnet originally received the documentation used to approve his/her request.
7. Loan holders will transfer his/her loans and/or TEACH Grant service obligation to Nelnet for discharge. He/she will then be subject to a 3-year post-discharge monitoring period that begins on the date the discharge is approved. There are requirements that you must meet during the post-discharge monitoring period.
8. Applicant's obligation to repay discharged loans or complete discharged TEACH Grant service obligation will be reinstated if at any time during the 3-year monitoring period he/she does not meet the requirements of the post-discharge monitoring period.
9. If the request gets denied he/she will be notified about the denial mail.
10. Loan holders will be instructed to resume collection activity on the applicant’s loans.
11. The letter applicant will receive will include the reason for the denial and instructions on what he/she can do if he/she has questions about the basis of the decision or believe there is other information that we should consider.
12. In case the applicant wants to re apply he/she can submit other documents supporting disability within one year of denial of his/her application. If he/she fails to do that within one year he/she will have to fill the application form again.
13. If Someone has submitted a consolidation loan application and it is being processed, he/she can still apply for TPD discharge by contacting the federal servicer who is processing his/her application for a consolidation loan and tell the servicer to suspend processing until after the submission of TPD discharge application and we Nelnet has determined whether he/she is eligible for TPD discharge. If the application has been approved, he/she can tell the federal loan servicer to cancel the consolidation request. If application has been denied, he/she can tell the federal loan servicer to move forward with the consolidation process.