A debilitating sickness or injury can be life-changing and make it challenging or impossible to pay back student loans. Because of this, borrowers who are considered “totally and permanently disabled” may qualify to have their student loans discharged through a federal forgiveness program known as Total and Permanent Disability Discharge.
Since this is a federal program, it only applies to federal student loan debt and not private student loans. Here’s what to know about forgiveness of student loans for disability and who is eligible for the student loan disability discharge program.
Table of Contents
- Disability Discharge of Student Loans
- Can You Get Student Loan Forgiveness for a Disability?
- What Is Student Loan Total and Permanent Disability Discharge?
- Applying for Student Loan Disability Discharge
- What Happens if I’m Approved for Student Loan Disability Discharge?
- What Is Student Loan Refinancing?
- Refinancing Student Loans With SoFi
- FAQ
Key Points
• Total and Permanent Disability (TPD) Discharge forgives federal student loans for borrowers with total and permanent disabilities.
• Eligibility requires a disability lasting or expected to last at least 60 continuous months or that could result in death.
• Documentation can be provided by the VA, SSA, or a health care professional.
• SSA or physician approvals for TPD include a three-year monitoring period.
• Refinancing federal student loans disqualifies borrowers from the TPD Discharge program.
Disability Discharge of Student Loans
Student loan discharge due to disability relieves borrowers of their student loan responsibilities in the event of total and permanent disability. Receiving a Total and Permanent Disability (TPD) Discharge from the U.S. Education Department means that a qualifying borrower does not need to pay back federal student loans or complete a TEACH Grant service obligation.
This is one of the student loan forgiveness programs available for eligible borrowers with federal student loans.
Can You Get Student Loan Forgiveness for a Disability?
Federal student loans can be forgiven due to disability. Borrowers interested in a disability discharge need to apply for the program and provide documentation to show that they are considered “totally and permanently disabled.” The Education Department will review the application to determine if an applicant qualifies.
In some instances, the Education Department may receive information from the Social Security Administration (SSA) or the U.S. Department of Veterans Affairs (VA) that an individual may qualify for a disability discharge of student loans. In these cases of automatic discharge, the Education Department may contact a borrower to provide information about requesting a TPD discharge.
You might also have a representative apply for a TPD discharge for you, such as a relative or an organization like a veterans’ service organization. To do this, you must submit an Applicant Representative Designation form for the other party to act as a representative on your behalf. The form must be processed by the Education Department before they can work with the third party on a TPD discharge for you.
Again, the student loan disability discharge program only applies to federal loans, such as Direct Loans, FFEL Program Loans, or Perkins Loans. This program of loan forgiveness for disabled students doesn’t apply to private student loans.
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What Is Student Loan Total and Permanent Disability Discharge?
A Total and Permanent Disability Discharge means that a qualifying borrower will not be required to pay back federal student loans or complete a TEACH Grant service obligation.
Loans included in the program are those issued by the William D. Ford Federal Direct Loan Program (Direct Loans), the Federal Family Education Loan Program (FFEL), and the Federal Perkins Loans. With this forgiveness of student loans for disability, borrowers in a TEACH Grant service program may also be relieved from having to complete whatever service obligation remains in their program.
Who Qualifies for TPD Discharge?
To qualify for TPD Discharge, borrowers must meet the Education Department’s requirements for being “totally and completely disabled.” This means that they are unable to engage in “substantial gainful activity” because of a physical or mental impairment that has lasted — or is expected to last — at least 60 continuous months or that could result in death.
An individual must provide specific documentation from a qualifying organization or physician to prove that they meet the requirements. See more about this below.
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Applying for Student Loan Disability Discharge
If you would like to apply for a disability discharge of student loans, the first step is to fill out a TPD discharge application.
You’ll also need to gather together documentation showing that you meet the Education Department’s requirements for being “totally and completely disabled.” There are three ways to provide the necessary documentation:
1. Through the VA
If you are a veteran, you can work with the U.S. Department of Veteran Affairs (VA) to provide the documentation needed to prove that you are permanently disabled from a service-related injury.
2. Through the Social Security Administration
If you are already receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, you can use documentation from the Social Security Administration (SSA).
3. Through a Physician
You also can have a physician (an MD or DO), nurse practitioner (NP), physician’s assistant (PA), or certified psychologist certify that you are unable to earn money in any substantial way due to a physical or mental impairment. Here are the current official qualifications:
• The impairment could result in death.
• The impairment has lasted for a continuous period of at least 60 months.
• The impairment can be expected to last for a continuous period of at least 60 months.
What Happens if I’m Approved for Student Loan Disability Discharge?
If you’re approved for student loan disability discharge, what happens next depends on whether you were approved for a disability discharge through the VA, the SSA, or your physician.
If you provided documentation from the VA, the following will happen upon approval:
• You’ll be notified of the discharge
• Your loan holders will be instructed to return any loan payments received on or after the effective date of the disability determination
Otherwise, you will face a monitoring period.
The Three-Year Monitoring Period
If you provide documentation from the Social Security Administration or from your physician, there will be an additional step if you qualify: You’ll be notified that you are subject to a three-year monitoring period. Your loans or TEACH work obligation could be reinstated if you don’t meet certain requirements at any time.
During the monitoring period, your obligations may be reinstated if you receive a new federal student loan under the Direct Loan Program or a new TEACH Grant, or if the SSA determines you are no longer disabled.
If you don’t meet the requirements during the monitoring period — or if you don’t qualify for a TPD discharge at all — there are other options for lowering federal student loan costs. For example, if you are a veteran, you may be eligible for military student loan forgiveness.
If you work full-time in public service for a qualifying employer and make 120 qualifying payments on a qualifying repayment plan, you may be eligible for the Public Service Loan Forgiveness program.
Other potential options for student loan debt relief include contacting your loan servicer to find out if you’re eligible for deferment or forbearance, or to ask if you qualify for an income-driven payment plan, which bases your monthly payments on your discretionary income and family size, and generally results in lower payments.
What Is Student Loan Refinancing?
Refinancing student loans may also help lower your repayment costs. With refinancing, you exchange your old loans for a new loan.
Because you’re using the new loan to pay off the existing loans, it’s possible to change the terms of the loan, such as securing a lower interest rate if you qualify or shortening the loan term (both of which mean saving interest over the life of the loan). You could also lengthen the loan term, which can lower your monthly payments, but potentially results in paying more interest over the life of the loan.
Keep in mind that if you refinance federal loans, you’ll lose access to federal benefits and protections, including eligibility for TPD, income-driven repayment, or other federal loan programs such as deferment or student loan forbearance. If you think you might want to pursue a disability discharge or other federal loan programs in the future, refinancing your federal loans may not be a good choice for you. If you have private loans, however, refinancing may be worth exploring.
Refinancing Student Loans With SoFi
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
What disabilities qualify for student loan forgiveness?
To receive federal loan forgiveness under the Total and Permanent Disability Discharge program, you must have a mental or physical disability that severely limits your ability to work now and in the future. You’ll need to provide documentation of this total and permanent disability through the VA, the SSA, or a healthcare provider.
Can you get student loan forgiveness if you become disabled?
A borrower can apply for a student loan disability discharge only if they become totally and permanently disabled. An individual who qualifies for a TPD discharge is not required to pay back their student loan or complete their TEACH Grant service obligation.
Do you have to pay back student loans if you are on disability?
If a person is receiving SSDI or SSI benefits from the Social Security Administration and their next disability review is not for another five to seven years, then a person is considered totally and permanently disabled and eligible to apply for a TPD discharge. A three-year monitoring period follows a TPD discharge that is based on documentation from either the SSA or a doctor.
Does disability discharge apply to private student loans?
No. The federal disability discharge program applies only to federal student loans, such as Direct Loans, FFEL Program Loans, or Perkins Loans. However, some private lenders may offer disability discharge. Check with your lender.
Can a representative apply for TPD Discharge on your behalf?
Yes, you can have a representative such as a relative or an organization like a veterans’ service organization apply for TPD on your behalf. First, you must submit an Applicant Representative Designation form for the other party to act as your representative. Then the form must be processed by the Education Department in order for them to work with the representative to apply for a TPD discharge for you.
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