On August 24, 2022, U.S. President Joe Biden announced his plan for a broad student loan forgiveness initiative. The unprecedented plan would forgive $10,000 of federal student loans for borrowers under a certain income level. It would also forgive up to $20,000 for Pell Grant recipients.
The media has sparked some controversy while reporting this news. Student loans have moved into the center stage of American discourse. Arguments range from whether the plan offers enough forgiveness to whether it’s a fair measure for those who have already paid off their debt without receiving assistance.
The conversation also raises questions regarding students with disabilities. A search of the Education Department’s statement on the new measure reveals no mention of students with disabilities. Students with disabilities may wonder if loan forgiveness programs are meant for them.
The answer is yes.
Students with disabilities can clear themselves of student debt through a total and permanent disability discharge program.
What is total and permanent disability discharge?
Total and permanent disability (TPD) discharge is a means for students with disabilities to relieve themselves of student loan debt. Any student with a total and permanent disability (as recognized and defined by Social Security Administration) is eligible to have their loans automatically discharged.
Individuals may qualify for a TPD discharge if their disability matches the program’s definition of “total and permanent disability.” This definition states that a borrower must be unable to work due to long-term mental or physical impairments. Long-term disability typically lasts 60 months or more. The program’s TPD standards mirror those outlined in the 1965 Higher Education Act.
If you believe you are eligible for TPD loan forgiveness, there are a few ways to verify your qualification.
Students who are veterans can utilize the US Department of Veteran Affairs (VA) to prove their eligibility. The Department of Education (ED) frequently receives information from the VA. The ED can identify student veterans with total and permanent disabilities through correspondence. The ED will then reach out to those students via letter.
Suppose a student meets the TPD criteria but hasn’t received a letter. In that case, they will need to send in a TPD discharge application along with documentation from the VA confirming their disability. The VA documentation must indicate the following:
- The student has a service-connected disability(s) that is 100% disabling
- An individual unemployment determination has verified the student’s total disability
Social Security Administration
The Department of Education also receives information from the Social Security Administration (SSA) regarding students who may qualify for TPD.
The TPD discharge program’s website states:
“If we have received information from the SSA indicating that you are receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits and that your next scheduled disability review will be within 5 to 7 years from the date of your most recent SSA disability determination, we will contact you by letter to notify you that you are eligible for a TPD discharge.”
The letter will also state that you must let the ED know by the specified date if you don't want the discharge. If you don’t, the ED will automatically discharge the loans. If you want the discharge, no further action will be required on your part.
Suppose your SSA benefits indicate your qualification for TPD, but you didn’t receive a letter. In that case, you will need to send the ED a TPD application and a copy of any relevant SSA documentation.
Students with disabilities may also apply for a TPD discharge with the help of a physician’s certification. The physician must be a doctor of medicine or osteopathy licensed to practice in the U.S.
The physician must certify that the student cannot participate in any substantial or gainful activity due to a disability diagnosis. The disability itself must meet the following criteria:
- Expected to be terminal
- Has lasted for a period of no less than 60 months
- It is expected to last a period of no less than 60 months
What loans does a TPD discharge forgive?
A TPD discharge forgives the student loans borrowed through the William D. Ford Direct Loan. This is a loan program wherein eligible students and parents borrow directly from the ED. In the past, TPD discharges forgave other loan programs such as Federal Family Education Loan (FFEL) and the Federal Perkins Loan (FPL).
These loan programs have since been discontinued. The FFEL program, which worked with private lenders to provide government-guaranteed loans, concluded in 2010. The FPL, which offered low-interest loans for students facing “exceptional” financial need, ended in 2017.
TPD also forgives service obligations for individuals who receive support from a Teacher Education Assistance for College and Higher Education (TEACH) Grant. A TEACH Grant is a federal program that provides eligible students up to $4,000 per year. In return, students must fulfill a “service obligation.”
TEACH grants mandate that recipients complete four years of teaching at an elementary school, secondary school, or educational service agency that serves students from low-income families. The grant is converted to a direct unsubsidized loan if recipients do not fulfill these obligations.
How to apply for a TPD discharge
If you think you qualify for a TPD discharge and haven’t received an eligibility letter from the ED, you’ll need to apply directly. You can let the ED know your intent to apply by phone or email.
- Phone: 888.303.7818
- Office Hours: Monday - Friday 8:00 AM – 8:00 PM (ET)
- Email: DisabilityInformation@Nelnet.net
A representative may apply on behalf of the student if the student is unable to do it on their own.
Upon receiving an application, the TPD discharge program will contact any student loan holders relevant to the applicant. They will subsequently instruct a suspension of debt collection. The program will review the application along with any appropriate supporting documentation.
Students who currently have loans in default may be subject to penalties such as wage garnishment. It's important to note that students may still incur these penalties until final program approval.
If the program approves a TPD discharge application, they will notify loan holders to return any loan payments made on or after the applicant’s disability date. A disability date differs depending on the student’s source of documentation.
In the case of VA documentation, a disability date refers to the date that the VA determined the individual's TPD. For those applying with SSA documentation, a disability date refers to the date the TPD discharge program received the SSA paperwork identifying the individual's disabilities. For those applying with a doctor’s recommendation, this date refers to when the doctor signed the discharge application.
Upon approval, the applicant will receive a letter from the program informing them of their acceptance. It should be noted that, with the exception of VA acceptance, eligible students will have to pay their loans again if they don’t meet TPD qualifications within a three-month monitoring period.
Upon denial of the TPD discharge program, applicants will be notified of their ineligibility via letter. Loan holders will also be advised to resume collection.
If a student is experiencing a life-altering or inhibiting disability, they may be able to receive a higher education without additional financial burdens. The TPD discharge provides an incredible opportunity for access to higher educational opportunities. If you believe that the TPD discharge program is right for you, we hope this information has been helpful.