Can Student Loans Be Discharged if I Am Disabled?

Possibly Yes. During the COVID pandemic, Student Loan interest and repayments were paused.

These repayments are due to restart currently in February of 2022. At the same time, many people who have suffered the effects of LONG-HAUL COVID, been injured, or have their health conditions worsen during COVID are discovering they can no longer return to work. Many people seeking Social Security Disability Benefits worry they will be unable to make their student loan payments while living on the fixed income provided by SSI or SSDI. 

Recently changes offered some relief to those burdened with Student Loan debt who cannot work due to illness or injury.

Under a total and permanent disability (TPD) discharge, you are relieved from having to repay certain types of loans. 

If you have a: 

• William D. Ford Federal Direct Loan (Direct Loan) Program loan,
•  A Federal Family Education Loan (FFEL) Program loan, and or a
• Federal Perkins Loan or to complete a TEACH Grant service obligation may be dischargeable due to being found disabled.

Once you have been found disabled, you must complete and submit a TPD discharge application, along with documentation showing that you meet the requirements for being considered totally and permanently disabled.

What do I need to show to qualify for a TPD discharge?

You can show that you qualify for a TPD discharge by providing documentation from one of three sources:

• the U.S. Department of Veterans Affairs (VA)
• the Social Security Administration (SSA)
• a physician

Each source has its requirements to show eligibility.

VA Documentation

If you are a veteran, you can qualify for a TPD discharge by providing documentation from the VA that shows you have received a VA disability determination because: 

1. have a service-connected disability that is 100% disabling, or 
2. are totally disabled based on an individual unemployability rating.

SSA Documentation

Once awarded Social Security Disability Insurance or Supplemental Security Income, you can qualify for a TPD discharge by providing a copy of your SSA notice of award or Benefits Planning Query showing that your next scheduled disability review will be five to seven years or more from the date of your last SSA disability determination.

Physician’s Certification

Finally, you can also qualify for a TPD discharge by having a physician certify that you are unable to engage in any substantial gainful activity on the TPD discharge application. 

This can be due to a physical or mental impairment. In 2021 Substantial gainful activity is $1310.00 per month. To qualify your physical or mental impairment must be one that:

• can be expected to result in death, or
• Has lasted for a continuous period of at least 60 months, or
• It can be expected to last for a continuous period of at least 60 months.

How do I apply for a TPD discharge?

You will need to complete a TPD discharge application. Once complete, it will need to be sent along with any required documentation to Nelnet. Nelnet is responsible for processing TPD discharge paperwork. The TPD discharge application will apply to all of your federal student loans and TEACH Grant service obligations. More information is available at disabilitydischarge.com under “Application Process.”

You can also let Nelnet know that you want to apply and request a TPD discharge application by phone or email. If you do, any required payments on your federal student loans will be stopped for a period of 120 days. 

This gives you time to submit your application and all required supporting documentation. You can also contact Nelnet by email at disabilityinformation@nelnet.net or by phone at 1-888-303-7818 Monday-Friday 7 a.m.-2 a.m. Eastern time (ET), and Saturday 8 a.m.-7 p.m. ET. 

We understand many of our current and former clients may be struggling under the demands of student loan debt. At Shook & Stone, our commitment to our clients extends beyond when you are granted disability benefits. We want our clients to be aware of all the benefits available to them due to their injury or illness preventing them from returning to work.