The Total and Permanent Disability Discharge program can provide complete student loan forgiveness for disabled Americans who qualify! This incredible program can be lifechanging if you’ve been struggling to keep up with your student loan payments.
I discovered this program back in 2017 when my husband was able to wipe out over $50,000 in student loan debt through this program. It was surprisingly easy! All we had to do was submit some paperwork about his disability benefits and then wait for that paperwork to be processed. This program provided life-changing relief to my family when we needed it most.
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Total & Permanent Disability Discharge
The Total and Permanent Disability (TPD) discharge process excuses disabled borrowers from having to repay their Direct Loans, FFEL loans and Perkins loans. It can also excuse you from having to complete a TEACH Grant service obligation!
What is the Total & Permanent Disability Discharge?
The Total & Permanent Disability Discharge program provides student loan forgiveness for disabled Americans who qualify.
If you are eligible, you could receive total student loan forgiveness for your eligible loans including:
- Federal Family Education Loan (FFEL) Program loans
- Federal Perkins Loans
- William D. Ford Federal Direct Loan (Direct Loan) Program loans
If you received a TEACH Grant, the program can also relieve you of your service obligation as well.
Who is eligible for total student loan forgiveness?
Total and Permanent Disability is a term used by the U.S. Department of Education to indicate a condition that prevents an individual from engaging in substantial gainful activity and is expected to last for a continuous period of at least 60 months or result in death.
In order to be eligible, you must be able to prove that you qualify by submitting documentation from the Department of Veterans Affairs, Social Security Administration or an authorized medical professional. The documentation that you submit must show that you are severely and permanently disabled.
How do I apply for student loan forgiveness?
The Department of Education works with the Department of Veterans Affairs and the Social Security Administration to identify veterans who may qualify. If one of those agencies identifies you as a potentially eligible candidate, you will receive a letter about it. Unless you intentionally opt-out, you will receive total student loan forgiveness automatically.
If you are not automatically identified, you can reach out and apply. It’s a lot easier than it sounds.
There is a three-step process to apply for total student loan forgiveness for disabled Americans:
- Complete a TPD Discharge Application.
- Upload your supporting documentation.
- Send your application and documentation to Nelnet, the company that processes TPD discharges.
The documentation that you need to include will depend on whether you’re working with the VA, Social Security Administration or a medical professional.
- Veterans: If you’re a veteran, you can qualify for a TPD discharge by providing documentation from the VA. This documentation should show that you have either one or more service-connected disabilities that are 100% disabling or that you are totally disabled based on an individual unemployability rating.
- SSDI or SSI Recipients: If you’re eligible for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), you must provide documents that demonstrate at least one of the following:
- Your next continuing disability review is scheduled between 5-7 years from the date of your last determination.
- Your next continuing disability review has been scheduled for at least three years.
- You have a medical onset date that occurred at least 5 years prior to your TPD discharge application was submitted.
- You qualify for SSDI or SSI based on the compassionate allowance criteria.
- You are currently receiving SSA retirement benefits and met one of the eligibility criteria listed above just before becoming eligible for retirement benefits.
- Medical Professional’s Certification: Another way to qualify for TPD discharge is by having a licensed medical professional certify your application. This certification must confirm that you are unable to engage in substantial gainful activity due to a physical or mental impairment that is expected to result in death, has lasted for a continuous period of at least 60 months, or is expected to last for a continuous period of at least 60 months. The certifying medical professional must be either a MD, DO, NP, PA or certified psychologist.
What happens after you submit your application?
Once your application is received, all collections activity will be suspended for up to 120 days while a decision is being made. You will not be required to make any payments on any of your loans while your application is being reviewed. Please note that this suspension doesnotnecessarily mean that your application is approved, it just means it is being processed.
Unfortunately, any wage garnishments or tax garnishments that are currently being collected will continue until a final decision has been made.
The agency will review your application and supporting evidence to ensure that the application is complete. If the application is complete and appears to meet the eligibility requirements, the application will be forwarded to the US Department of Education for a final decision.
It usually takes 30 days or less to complete your application and render a decision.
If your application is approved, your loans will be discharged. That means they are forgiven. Any loan holders must return any payments made after your disability date to the person who made the payments. Your loan obligations may be reinstated if you no longer meet the criteria for the discharge within the next 3 years.
If your application is denied, you will receive a written notice with an explanation. You can appeal that decision within 12 months of the date you were notified that your application was denied.
What else do I need to know about student loan forgiveness for disabled Americans?
There are some downsides to this program that you absolutely need to understand before you apply.
You can’t go back to work or school within at least three years. You will be expected to repay any loans that were discharged if you obtain gainful employment or obtain new student loans within a three year period following the discharge. This is called the 3-Year Post-Discharge Monitoring Period. This rule does not apply to veterans.
You will not be able to get student loans again unless you follow specific steps.You will not be able to obtain student loans again unless you certify that you are employableandyou sign a statement saying that you cannot get those new loans discharged for your existing disabilities unless your condition significantly deteriorates in the future.
It will not affect your Medicare or Medicaid eligibilitybut it could affect other health insurance plans.Generally, government health care plans will not count the 1099-C income against your eligibility. However, you may find that it affects other health insurance options that are purchased through the Marketplace because it does count toward your overall taxable income.
My Experience
When my husband received his new VA disability rating in 2017, I was thrilled to discover that he could have his $50,000 in student loan debt wiped away. This was a tremendous relief for our family!
Back then, there was no automatic processing so we had to apply ourselves. It didn’t take very long to fill out the application. I was able to print evidence of his new VA rating from the VA website. When everything was done, I sent it off.
It only took a few weeks to receive a letter stating that his student loan debt had been completely forgiven. It was surprisingly easy!
The hardest part was getting the disability rating. It took years to get the VA to acknowledge the extent of his condition. We applied and appealed. It was a long and tedious process.
If you have been denied disability benefits that you deserve, the experts at Injury Claims may be able to help you fight back. Fill out their two-step questionnaire now to find out if you’re eligible for help!
You can also call CareConnect USA’s Student Aid Relief line for additional help with your student loans. They can be reached at 888-201-0431.
FAQs about TPD Discharge
While Total and Permanent Disability Discharge (TPD) is a crucial program for individuals with disabilities facing student loan debt, it isn’t always clear how to navigate its requirements and application process. Here are some common questions and answers.
What disabilities qualify for student loan forgiveness?
Student loan forgiveness for total and permanent disability (TPD) is available to individuals who have disabilities that meet the specific criteria outlined by the U.S. Department of Education. To qualify for TPD discharge, your disability must be total and permanent, which means it must:
- Prevent Substantial Gainful Activity: Your disability must render you unable to engage in substantial gainful activity. In other words, you should not be able to work and earn a substantial income due to your disability.
- Be Expected to Last at Least 60 Months or Result in Death: Your disability should either have lasted, or be expected to last, for a continuous period of at least 60 months (five years) or result in death.
There is no specific list of disabilities that automatically qualify for TPD discharge. Instead, it is the impact of the disability on your ability to work and its expected duration that determine eligibility. The Department of Education considers various factors, including medical records, physician certifications, Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, and Department of Veterans Affairs (VA) documentation when evaluating eligibility.
It’s important to note that eligibility for TPD discharge is determined on a case-by-case basis. If you believe you meet the criteria for total and permanent disability, it’s advisable to consult with your physician, gather the necessary documentation, and apply for TPD discharge through the official application process to have your individual case evaluated by the Department of Education.
Will I have to pay taxes on the forgiven amount?
Disabled Americans do not have to pay federal taxes on amount forgiven by a Total & Permanent Disability Discharge as long as their discharge is processed between January 1, 2018 and December 31, 2025.
However, states may consider it as income for state tax purposes. You will need to consult with your state tax office or a tax professional in order to be sure.
Relief Recap
Can student loans be forgiven if you have a disability? YES! The Total & Permanent Disability Discharge program provides complete student loan forgiveness for disabled Americans. This program erased $50,000 in student loan debt for my husband and it may be able to help you, too. Follow the instructions in this article to apply for this life-changing relief today!
Low Income Relief Team
The Low Income Relief Team has over 10 years of experience exclusively researching low income topics. Because we focus on keeping our content as up-to-date as possible, our articles are regularly revised by different authors. When an article has significant contributions from at least two different authors, we use the designation "Low Income Relief Team." Articles attributed to this author may also include some contributions by AI tools. However, every article written by the Low Income Relief Team is personally reviewed by our founder and resident poverty expert prior to publication.
