A total and permanent disability (TPD) discharge relieves federal student loan borrowers from payment of qualifying federal student loans upon a showing that the borrower meets certain requirements for being considered totally and permanently disabled.
Qualifying Loans
- Direct
- FFEL
- Perkins
- Parent PLUS (Based on parent’s own disabilities, not those of the student’s).
Requirements
To qualify for a TPD discharge, the borrower or the borrower’s representative must complete and submit a TPD discharge application, along with documentation showing that the borrower meets the Department of Education’s requirements for being considered totally and permanently disabled.
Applicants for TPD must provide documentation from one of three qualifying sources:
- The U.S. Department of Veterans Affairs (VA)
- The Social Security Administration (SSA)
- A physician
There are specific requirements for each type of supporting documentation that the borrower may submit to demonstrate eligibility.
VA Documentation
If the borrower is a veteran, the borrower may qualify for a TPD by providing documentation from the VA that shows that that the borrower has received a VA disability determination because he/she (1) has a service-connected disability that is 100 percent disabling; or (2) are totally disabled based on an individual unemployability rating.
SSA Documentation
If the borrower is eligible for Social Security Disability Insurance or Supplemental Security Income, he/she can qualify for a TPD by providing a copy of the SSA Notice of Award or Benefits Planning Query showing that the next scheduled disability review will be five to seven years or more from the date of the last SSA disability determination.
Physician’s Certification
A physician may certify on the TPD discharge application that the borrower is unable to engage in any substantial gainful activity due to a physical or mental impairment that
- can be expected to result in death;
- has lasted for a continuous period of at least 60 months; or
- can be expected to last for a continuous period of at least 60 months.
Substantial gainful activity is a level of work performed for pay or profit that involves doing significant physical or mental activities, or a combination of both.
The physician who certifies the borrower’s TPD discharge application must be a Doctor of Medicine (M.D.) or Doctor of Osteopathy/Osteopathic Medicine (D.O.) who is licensed to practice in the United States.
Post Approval Review
If the borrower is approved for TPD under a physician’s certification or SSA, the borrower’s TPD status will be subject to a three-year post-discharge monitoring period that begins on the date the discharge is approved., The borrower’s obligation to repay will be reinstated if the borrower does not meet certain requirements at any time during this monitoring period.
The borrower’s obligation to repay will be reinstated if, at any time during the three-year post-discharge monitoring period, the borrower receives:
- Annual earnings from employment that exceed the poverty guideline amount for a family of two in the borrower’s state, regardless of family size;
- The borrower is issued a new federal student loan under the Direct Loan Program;
- Another disbursement (payment) of a Direct Loan that was first disbursed (paid out) before the borrower’s discharge was approved, and the new disbursement has not been returned to the loan holder within 120 days of the disbursement date; or
- A notice from the SSA stating that the borrower is no longer disabled, or that the borrower’s next scheduled disability review will no longer be five to seven years from the date of his/her last SSA disability determination.
During the post-discharge monitoring period, the borrower will be required to submit documentation of his/her annual earnings from employment. If the borrower does not submit this form with the required documentation, the obligation to repay will be reinstated.
Reinstatement
If a TPD is vacated and payment obligations reinstated, the borrower will again be responsible for repaying the loans in accordance with the terms of the promissory note.
If the borrower applied for a discharge of loans, the loans will be returned to the status they were in before you the discharge application. This means that if a loan was in default before the borrower applied for a TPD discharge, it will be returned to default status.
Tax Considerations
If the borrower received a TPD discharge of a loan before January 1, 2018, the loan amount discharged may be considered income for federal tax purposes under Internal Revenue Service rules. If the borrower received a TPD discharge of a loan during the period from January 1, 2018 to Dec. 31, 2025, the discharged loan amount will not be considered income for federal tax purposes.