Taking on student loans is a huge commitment. You sign up for them knowing you’ll need to work hard to pay them off — but what if something serious happens and you aren’t able to?
What if you come down with a serious illness, or are involved in an accident that leaves you physically unable to work? If you’re left totally and permanently disabled, you could qualify for student loan forgiveness through the U.S. Department of Education.
However, as you might imagine, this can be a lengthy and complex process. Here’s a complete guide on the process of applying for student loan forgiveness due to a disability.
What Is Total and Permanent Disability Discharge?
Total and Permanent Disability (TPD) discharge is a program created by the U.S. Department of Education. It relieves the disabled borrower from having to repay federal student loans or TEACH Grant service obligations.
Nelnet, a student loan servicer, assists the Department of Education with this process. Nelnet manages all of the communications with borrowers on behalf of the Department.
Which Loans Are Eligible for TPD Discharge?
TPD discharge only applies to federal student loans. It relieves debt from the following:
- William D. Ford Federal Direct Loan (Direct Loan)
- Federal Family Education Loan (FFEL)
- Federal Perkins Loan Program loans
In addition to these three federal loans, TPD discharge can also relieve you from having to fulfill a TEACH Grant service obligation. If you have one of these loans and are looking to apply for a TPD discharge, you must first prove you are totally and permanently disabled.
How to Prove You're Totally and Permanently Disabled
There are three ways you can show you meet the TPD discharge requirements, according to the FederalStudentAid:
- If you’re a veteran, you can apply for TPD discharge and provide documentation from the VA showing you have a service-connected disability (or disabilities) and are unable to work.
- If you receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), and your next disability review will be within five to seven years of your most recent one, you may apply for TPD discharge. You can submit paperwork showing your SSA notice of award for SSDI, SSI benefits, or a Benefits Planning Query that states the date of your next review.
- You can submit a certification from a doctor (an M.D. or D.O.) declaring you’re totally and permanently disabled. The physician must certify you’re unable to work due to a 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.
Each option for conditions eligible for TPD discharge has its own set of requirements when going through the application process.
How to Apply for TPD Discharge
The Department of Health has agreements with the Social Security Administration and VA that allow them to determine who qualifies for a TPD discharge. If they think you might qualify, they’ll contact you to let you know next steps. If you’re contacted based on information received from the SSA or VA, you don’t have to provide supporting documents.
If you haven’t been contacted and believe you meet the requirements above, you can fill out the application, attach supporting documents, and mail it in to the Department.
If you’re unable to complete the application on your own, your representative can complete and submit your TPD discharge application on your behalf. With this option, your representative will have to complete an Applicant Representative Designation form. This has to be submitted and processed before they’re able to work with your representative.
Obtain a TPD Discharge Application
There are a few ways you can get the application:
- Start the application online. You can’t fully complete all the required parts online, since you will have to physically send in supporting documents. However, you can get it started online — visit the link here. The Department will use the information you provide to send you a partially completed application in PDF form, which you’ll print and fill out the rest by hand.
- Download and print the application. Instead of filling out the first part of the application online, this option allows you to download and print the entire blank application and fill it all out by hand. You can find the blank application here.
- Request an application by phone or email. With this option, you’ll contact the Department either via phone or email and request an application be mailed to you. The phone number is 888-303-7818 and the email is DisabilityInformation@Nelnet.net.
Filling Out a TPD Discharge Application
Regardless of the option you choose to obtain the application, you’ll have to fill out some or all of it by hand.
If you opted to start the application online, you’ll have filled out the first and second sections already. A PDF version of it will be emailed back to you for you to print out and manually complete the third section. If you printed the application yourself or requested one be mailed to you, you’ll manually fill out sections one through three.
Once the application is filled out, you’ll have to attach supporting documents or have a physician fill out the fourth section. The supporting documents for each disability option differ a bit.
Veteran Affairs determination: If you’re a veteran, you must supply documentation from the VA that shows the VA has determined one of the following:
- You have a service-connected disability (or disabilities) that are 100% disabling.
- You are totally disabled based on an individual unemployability determination.
Social Security Administration: If you’re applying as a recipient of SSDI or SSI benefits, your paperwork must be an SSA notice of award for SSDI or SSI benefits. The paperwork must also state your next scheduled disability review will be within five to seven years of your most recent disability determination.
Physician certification: You can submit your application with a certification from a physician that shows you are totally and permanently disabled. After filling out sections one through three of your application, you’ll have a physician (either an M.D. or D.O.) complete section four of your application. It is important to note that with this step you have to mail in the completed application within 90 days of the date your physician signed the application.
After attaching all necessary paperwork to your application, you must mail it in to the Department. The address to mail your application and supporting documents can be found here. You can also fax it, email it, or scan and upload it to the disability discharge website.
What Happens After You Send In the Application?
After the Department receives your TPD discharge application, they’ll contact the holders of your federal loans or TEACH Grant service obligation and suspend collection on your loans while they determine eligibility. Basically, you won’t have to make any payments on your loans while they look over your application — this period can last up to 120 days.
However, if your loans are in default and your payments are collected through wage garnishments, this will continue until your discharge is approved.
Next, your application and supporting documents will be reviewed to make sure everything is completed. After the review process, the Department will reach a final decision.
What Happens If You're Approved?
Once the U.S. Department of Education approves your discharge request, you’ll be notified of the approval and your loans or TEACH Grant will be transferred to them for discharge. The lenders will also be asked to return any payments you made after the disability date, which is when the Department received your application.
If your TPD discharge was based on Social Security Administration documentation or a physician’s certification (this does not apply for veterans), you will be subject to a three-year, post-discharge monitoring period.
Starting from the date your discharge is approved, the Department will reinstate your obligations to pay back the loans again if one of the following is true:
- Your annual employment income exceeds the poverty guideline amount for a family of two in your state, regardless of your family size.
- You receive a new Federal Direct Loan, Federal Perkins Loan Program Loan, or TEACH Grant.
- A disbursement of your federal loans or TEACH Grant that you received before the discharge date is made, and you can’t ensure the full amount will be returned within 120 days.
- SSA determines you are no longer totally and permanently disabled, or that your next disability review no longer meets the five-to-seven-year review period.
You have a few other responsibilities during this three-year monitoring period. You have to contact the Department if:
- Your annual earnings exceed the poverty guideline amount for a family of two in your state, regardless of your family size.
- Your address or phone number changes.
- The Department requests documentation of your annual earnings from employment.
- You receive notice from the SSA you are no longer permanently and totally disabled, or your disability review doesn’t meet the five-to-seven-year period from your most recent review.
What Happens If You're Denied?
You’ll be notified via mail if your application was denied, and your loan holders will start collecting payments again.
This letter will state why you were denied and what you can do if you have any questions about the decision. If you have additional information you want the department to consider within a year of the denial letter, they will re-evaluate your application.
Other Questions About TPD
Does TPD Discharge Affect Taxes?
Thanks to the new tax code that went into effect early this year, the disability discharge of federal student loans is now tax-exempt. Previously, this discharge had to be reported as taxable income and could mean a pretty hefty tax bill when the time came. However, take note — this only applies to discharges during 2018 through 2025.
Is There Disability Discharge for Private Student Loans?
The U.S. Department of Education’s TPD discharge only applies to federal student loans, but what if your loans are private? While there aren’t any disability loan forgiveness programs for private student loans, some lenders have started offering this service themselves.
Here are a few lenders that offer disability discharge for private student loans with programs similar to the TPD discharge:
- Sallie Mae’s website states they will waive the current balance if a student becomes permanently and totally disabled. There isn’t an online application — you can call them at 800-472-5543 for more information.
- Wells Fargo offers private student loan forgiveness in the event of total and permanent disability. This forgiveness also extends to its Student Loan for Parents loan in the event the student receiving the aid becomes disabled, and the Wells Fargo Private Consolidation loan.
- Discover offers a 12-month forbearance for students suffering from hardships based on a medical disability.
If I Have Several Federal Student Loans, Do I Need to Submit Multiple Applications?
No. If you have federal student loans with multiple lenders, you don’t need to complete more than one application. When you send in your application, the Department contacts the lenders for all of your federal student loans.
If you have any more questions about the TPD discharge program through the Department of Education, refer to their FAQ page.
Jacquelyn Pica is a writer at The Penny Hoarder, a personal finance website that helps you make smart money decisions. Here’s their latest guide to paying off credit card debt. Find her on Twitter @JacquelynTPH.
Jean Poppe says
I recently qualified for discharge of my federal student loans due to disability based on my doctor’s certification. For purposes of the three-year monitoring: What is the definition of employment income? Does it include my husbands income? Does it include Social Security retirement income? Does it include ira retirement income? My concern is if I need to file income tax married filing separately to distinguish my income vs husband’s income.
Would be greatly appreciated if you can clarify any of this .
Robert Farrington says
The rule is you are disqualified if you have annual employment earnings that exceed the Poverty Guideline amount for a family of two in your state, regardless of your actual family size.
Employment earnings is considered W2 income, 1099 income, active partnership income, self employment/small business income. Social Security and IRA distributions are not considered employment income.
You shouldn’t need to change your filing status on your taxes – it can still be tracked by W2s or 1099s in your name/SSN.
Debra L Christopherson says
I applied for this disability discharge due to my rheumatoid arthritis and the fact that I’ve been receiving SSI for over two years and I don’t have another review for several years. I thought I qualified. But instead of being accepted or even denied, it says that my application has been rejected. What does that mean and is there a difference between a denial and a rejection?
Robert Farrington says
That could mean you didn’t properly fill out the forms. Why was it rejected?
Happynfree says
How long after TPD discharge does the garnishment stop and you receive reimbursement? I know it’s only from the date of the paperwork.
Robert Farrington says
Usually takes about 30 days or so once it’s approved.
Barbara H says
My letter explaing the discharge due to disability determined by SSA said that credit bureaus would be notified. Does this negatively affect my credit score or how other creditors such as mortgage holder or credit card companies treat my credit worthiness?
Robert Farrington says
Yes, it likely would be a positive but it’s impossible to know. Your loans will update on your credit report as discharged.
Lynn Tomlinson says
I just finished my 3 year monitoring period. I was thinking of doing something part time at home to supplement my income. I just talked to NELNET and they said they won’t be monitoring me any longer and that they are sending out a letter today. Has anyone tried working after the monitoring period is over? Just curious. Thanks!
Robert Farrington says
After your monitoring period you should be fine.
Shalene B says
Does my husbands income count towards the poverty limit? Or do they just use my income? We have been married 19 years.
Robert Farrington says
It’s the borrower’s earnings, not a spouses’ earnings.
Linda Ciabattari says
I’ve been disabled and collecting SSDI for 7 years. I have repeatedly tried to file for student loan dischage, but Nelnet keeps asking for the Benefits Planning Query from Social Security. When I ask for that from Social Security, all I get is a letter that states they will be reviewing my case from time to time. I have had only one review in the past 7 years which was in 2018 (been disabled since 2011). I have submitted the letter from Social Security that they have provided me as well as my benefits letters for the past 7 years and they will not approve my discharge. My doctor said he does not know how to fill out Nelnet’s certification form and doesn’t want to get involved. What can be done to get this loan discharged.
Robert Farrington says
Get a new doctor and/or speak with an attorney who can help you get the required documents from Social Security.
Annamaul93 says
If your SSI or SSDI medical review is only once every 5 or 7 years, ask the Social Security Administration for a SSA Benefits Planning Query (BPQY, form 2459). If you call 1-888-303-7818 (disability discharge office) and ask to be emailed the forms, there’s a “tip on applying” pdf they send along with the main application. They also send another OPTIONAL attachment/form for signing rights to a representative of your choice to file on your behalf. You don’t worry about that unless you want a proxy.
Short answer: ask SSA for a “BPQY”. They will know what you mean.
Joey says
How is income “monitored”? Just curious..
DO they check up on people’s tax returns? Call the IRS? Isn’t that illegal?
It’s a great service, but I wonder if they hound people..
Robert Farrington says
They check your tax returns. It’s not illegal because you agree to it as part of the program and sign documents that say you agree to it. There’s no hounding – it’s just like when you get a mortgage your lender goes and gets your tax returns as well – it’s painless on your end.
Amelia K says
I have finished my 3-year monitoring period in June 2018. The new tax code applies so I have no tax penalty associated with my discharged student loans. I am considering working part time as my health allows and wondered about the credit check for employment. The potential employer WILL do an extensive check into employees and their credit. How exactly will the credit report read … just that student loans have been discharged or is the reporting more detailed?
Robert Farrington says
It will read that the loans have been discharged. That’s it. Beyond that, it’s up to you and your employer to discuss it.
David says
Went into my local SS Office to get a copy of my SSA-2459 – As requested from Dept of Education for Student Loan Forgiveness. To my suprise, it said “medically reviewed every 3 plus years”. I have been collecting SSDI benefits since 2009 and only have had one medical review (filled out some document and sent it back – recieved a letter back saying we are not going to proceed any further on this matter…something to that effect). Essentially, in 10 years I’ve been reviewed once. I have yet to submit the SSA 2459 with my application, as I don’t know if it will get approved due to their every 5-7 year medical review policy. What should I do…any suggestions/advice? Thank you 🙂
Robert Farrington says
You should submit your most recent documentation no matter what. If you get denied for forgiveness, then go raise hell at the SSA to get reviewed again, then repeat the process.
Michael Pullen says
I have been on disability for about 8 years. I am veteran, but not a service connected disability. VA has been giving me the run around on getting this done. They say they are not qualified to fill it out?? I only have one or two months left to file this. My Benefits Planning Query says I am to be reviewed every 3+ years, but needs to be 5 to 7+ years for forgiveness. I have no idea how to find a doctor to do this and read something about “doctor shopping” and how it can have a negative effect on me. What can I do? Please help??
Robert Farrington says
If the VA isn’t handling your case, then you should have a doctor handling it. Or you can work through SSA.
Debra says
If they recently took my federal taxes while I’m waiting for my disability discharge application in the mail to come. Once I am approved for the discharge will they return my federal taxes to me ?
Robert Farrington says
No sadly. But any discharge you receive will be for the lesser amount of anything that was applied to your loan balance.
Lee says
I recently had my loans discharged via TPD and found out I don’t owe federal taxes (discharged in 2018 after 3 year monitoring). What I can’t find any information on is if I’ll owe California state taxes. My CPA is looking into it but anxious to find out if anyone knows? Almost 150k discharged so state taxes will be significant. Thanks.
Robert Farrington says
CA tax law typically complies with Federal law (and even exceeds it) when it comes to taxability of loan discharges. However, we can’t find the specific update for TPD discharge. You should definitely consult with a tax professional.
Jason says
I have a letter from Ssi and ssdi stating I’ve been disabled since 2011. Was seen in court in 2017 and approved….received back pay but was said to b seen in a year it’s been 2 and nothing…should I bother trying for dismissals of loans?
Robert Farrington says
Of course you should try for it, but you might need SSI to initiate a benefit planning query to get your timeline extended out.
Tammie says
I was approved for 100% disability by SSA in Feb 2014 for terminal cancer. I had two loans each about 2500 dollars and one Perkins loan for 755 that were processed under disability discharge in April of 2017. I started going to community college all online and completed my AA degree just last quarter while still undergoing surgeries for all the radiation damage. I have also been diagnosed with pelvic radiation disease, which is lifelong issues due to the high level of radiation I received. I have been accepted for University for an all online program ( I physically cannot manage full-time student face to face classes but can take online classes even from my hospital bed) My main question is that even though I know I am still within the three year monitoring period, and do not want to apply for federal student loans, am I eligible for grants like the Pell grant for my ongoing schooling? I cannot give up my disability as I still have at least 2 major surgeries in the next year and need the Medicare coverage. If they review me in the 5-year window, that would be this August but I have had 13 surgeries with at least 2 more in the process all due to cancer. Just looking for a way to complete my degree even with my illness.
Robert Farrington says
First, to get anything after a discharge, you must get your physician to sign a statement that you’re able to once again engage in sustainable gainful employment. And you must sign a statement acknowledging that you can no longer qualify for a future TPD discharge.
If you get a new grant or loan during the 3 year monitoring period (which it sounds like you’re thinking about), you must resume payments on the loans discharged.
SK says
I am a 100% service connected disabled veteran. I understand that I don’t have a monitoring period, so my question is less about me than about my child. I have one in college now and one that may be starting back to school soon. Does this discharge prevent me from having any parent loans? We try to minimize it, but I just want to make sure that it won’t affect the discharge process. I do not work but clearly I do have VA disability payments. Any ideas?
Robert Farrington says
Correct, you cannot get a Parent PLUS Loan (nor should you – we hate parent loans but understand what you can get). Have you looked into your VA Education Benefits since you’re 100% disabled? Specifically the DEA program since you are 100% disabled?
Annie says
After the three year monitoring period, if I (say, 5-10 years from now) am up for SSA disability review and it is determined that I am no longer disabled, would I then have to start paying back the loans, or would they still be forgiven?
In other words, would the loans be re-instated after the three year monitoring period if I stop being disabled?
Robert Farrington says
No, they will be forgiven. You will, however, be unable to get any type of future Federal aid unless your doctor certifies you’ll be able to get gainful employment. You’ll also never be able to get any loans forgiven in the future under disability discharge if they are for the same disability you have now.
Mike says
I am a 100% service connected disabled veteran, and I like to know if this discharge prevents me from to go back to work part-time, do volunteer work or continue my education(non-loans) in the future.
Robert Farrington says
It could.
– In your 3 year monitoring period, you cannot earn more than the guidelines stated above. So, you can volunteer, but even part time work may prove risky.
– You can totally continue your education, but you cannot get any more loans during the monitoring period.
– After the monitoring period, you can get new loans, but only if your physician certifies you able to work, and under the condition you cannot get discharge again
Mike says
I am presently going to school and I am also a 100% service connected disabled veteran. Did you know if I can apply for the discharge when I am in school and if I can continue pursuing my education?
Robert Farrington says
You can apply for the discharge whenever you qualify for it. You can also continue pursuing your education. The big issue is you cannot get any Federal money (grants, loans, etc) to help you continue pursuing your education after you apply for the discharge – you have a 3 year monitoring period where you cannot work, and then if you do ever need money again, you borrow it under the certification you cannot get loan forgiveness on it.
Tina says
Do your loans start all over again if you want to go back to school after your monitoring period is over?
Robert Farrington says
After the monitoring period, you can go back to school, you just cannot borrow more in loans unless a doctor certifies you fit to have gainful employment. You are also further disqualified from disability discharge for the same disability.