Borrower Frequently Asked Questions (FAQs)
Below you will find a series of commonly asked questions regarding discharges due to total and permanent disability.
Defining Total and Permanent Disability (TPD) Discharge
What does “discharged” mean?
If a loan or TEACH Grant service obligation is discharged, this means that you are no longer required to make any further payments on the loan or complete the TEACH Grant service obligation. However, you are still responsible to meet the requirements of this program as outlined under Apply for a Discharge. If you do not meet these requirements, your discharged loan or TEACH Grant service obligation will be reinstated and you will be required to repay the discharged loan or complete the discharged service obligation.
Requesting a Discharge
How do I get my student loan or TEACH Grant service obligation discharged based on a Total and Permanent Disability?
Fill out the application, Discharge Application: Total and Permanent Disability, have your physician complete and sign Section 4, and submit a copy of the completed application to each of your loan holder(s) or, for a TEACH Grant service obligation, to the U.S. Department of Education (the Department). Your loan holder and the Department will determine whether your application supports the conclusion that you are totally and permanently disabled. Certain veterans may apply under a separate process. Please see Veterans Disability Discharge for more information.
What types of doctors may certify total and permanent disability on the Discharge Application: Total and Permanent Disability?
Only a doctor of medicine (M.D.) or osteopathy (D.O.) who is licensed to practice in the United States may certify total and permanent disability on the Discharge Application: Total and Permanent Disability. For this purpose, the United States includes the 50 United States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, and the Federated States of Micronesia and Palau.
Chiropractors, herbalists, physician's assistants, registered nurses, licensed practical nurses (LPNs), Ph.D.s, interns, etc., are not eligible to certify total and permanent loan discharge applications. Typically, a resident physician in training is not a fully licensed M.D. or D.O., so we cannot accept an application signed by a resident in training. However, some states do fully license residents in training. A resident who is fully licensed may certify the application.
Applications certified by anyone other than a licensed M.D. or D.O. will be returned.
Can a podiatrist or psychologist sign the application?
A podiatrist or psychologist cannot certify the discharge application, unless he or she is also a doctor of medicine (M.D.) or doctor of osteopathy/osteopathic medicine (D.O.).
I live outside the United States. Can I still apply for discharge due to total and permanent disability?
If you live outside the country, you still need to have your application completed by a physician licensed in the United States. Your local physician may work with a physician in the United States to help you apply for discharge.
My loans are with several loan holders. How do I apply for discharge of all my loans?
You must submit a separate TPD application to each loan holder. You may fax or mail a photocopy of your application to each subsequent loan holder.
Who determines whether or not I’m totally and permanently disabled?
Your physician certifies that you are totally and permanently disabled in accordance with the U.S. Department of Education’s regulations. Except for certain veterans (see below), totally and permanently disabled is defined as being unable to engage in any substantial gainful activity by reason of any medically determinable 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. Your loan holder and then the Department’s Total and Permanent Disability (TPD) Servicer conduct a medical review in order to determine whether the information provided by your physician on the discharge application supports the conclusion that you are totally and permanently disabled. The Department may follow up with your physician if additional information is required to make the determination that you are totally and permanently disabled.
Veterans are considered totally and permanently disabled for purposes of disability discharge if they provide documentation from the U.S. Department of Veterans Affairs showing that they have been determined to be unemployable due to a service-connected disability. See Veterans Disability Discharge.
What happens after the TPD Servicer’s medical review?
The medical review is a determination of whether or not your discharge application supports the conclusion that you are totally and permanently disabled. If the TPD Servicer determines that your discharge application supports the conclusion that you are totally and permanently disabled, the TPD Servicer will send you a notice of the decision. The notice will indicate that your loans and/or TEACH Grant service obligation are now discharged and that you will be subject to a 3-year post-discharge monitoring period that begins on the date the discharge is granted. The notice will also explain that your obligation to repay the discharged loans or complete the discharged TEACH Grant service obligation will be reinstated if you fail to meet certain requirements during a 3-year post-discharge monitoring period that begins on the date the discharge is granted. The discharge will be reported to national consumer reporting agencies, and any loan payments that were received after the date the physician certified your discharge application will be returned to the person who made the payments. If the TPD Servicer determines that your discharge application does not support the conclusion that you are totally and permanently disabled, you must resume repayment of your loan(s) and/or comply with all terms and conditions of your TEACH Grant Agreement to Serve.
I have a partial disability that limits my ability to work, but I am able to work on a very limited basis. Am I eligible for a total and permanent disability discharge?
To be eligible for a TPD discharge, a physician must certify that you are unable to engage in any substantial gainful activity by reason of any medically determinable 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. “Substantial gainful activity” is defined as a level of work performed for pay or profit that involves doing significant physical or mental activities, or both. If your condition allows you to work at a level that would be considered substantial gainful activity, you cannot be considered totally and permanently disabled.
I have a disability that prevents me from working in the occupation for which I was trained. Can I get a discharge?
To be eligible for a TPD discharge, your disability must make you unable to engage in any substantial gainful activity, as defined above. If your disability prevents you from working in the occupation for which you were trained, but you are able to engage in substantial gainful activity involving a different type of work, you are not considered totally and permanently disabled for discharge purposes.
How does the Department monitor my earnings from employment?
The Department will require you to submit documentation of your employment earnings, generally on an annual basis. To do so, you may submit any of the following as documented proof of income:
- Filed income tax return, with all attachments
- Pay stubs showing year-to-date income
- Social Security Statement. (Visit www.ssa.gov/mystatement. You must set up an account to see, download, save and print your full statement of earnings.)
NOTE: If you did not earn income from employment, send us a letter signed by you or your representative specifying the tax year(s) for which no income was earned.
My employment earnings exceeded the poverty guidelines for a family of two in the calendar year during which I submitted my discharge application, but this was the result of employment that occurred before the date the physician signed my application. What should I do?
The Disability Discharge Loan Servicing Center will work with you to document the period during which you earned the income. You may need to supply pay stubs and/or a letter from your employer to verify when you made the earnings.
I receive disability and/or retirement pay. Will that be counted as employment earnings?
No. The Department only considers earnings from work performed. However, in some cases we may require you to provide documentation of the disability/retirement pay to show that the income was not from work.
If I am approved as eligible for TPD discharge, when is my loan eligible for discharge?
It depends on the date your application was received by your lender. If your application was received by your lender before July 1, 2008, your loan is eligible for discharge 3 years after the date of disability. If your application was received by your lender after July 1, 2008, your loan is eligible for discharge 3 years after the date that your physician signs your application. If your application was received by your lender on or after July 1, 2010, your loan is eligible for immediate discharge. However, your earned income will be subject to monitoring for three years from discharge. And, if your earned income exceeds the poverty level for a family of two, your loan will be reinstated to repayment
How long will the discharge process take?
The Department’s review of your application can take anywhere from 30 days to a few months, depending on the completeness of the application and the response time of your physician, if it is necessary for us to contact your physician for additional information.
What happens during the post-discharge monitoring period?
During the 3-year post-discharge monitoring period that begins on the date the discharge is granted, the Department will check to see if you receive any new Title IV loans under the Federal Perkins Loan (Perkins Loan) Program or the William D. Ford Federal Direct Loan (Direct Loan) Program or TEACH Grants, and will monitor your earnings from employment. Your discharged loans and/or TEACH Grant service obligation will be reinstated if, at any time during the 3-year monitoring period, you (1) receive a new loan under the Federal Perkins Loan or William D. Ford Direct Loan Programs or a new TEACH Grant, (2) have annual earnings from employment that exceed the poverty guidelines for a family of two in your state, or (3) fail to ensure that the full amount of any Title IV loan (under the Federal Family Education Loan (FFEL) Program, the Direct Loan Program, or the Perkins Loan Program) or TEACH Grant disbursement that is made during the 3-year monitoring period for a loan or grant that you received before the discharge date is returned to the loan holder or to the Department (as applicable) within 120 days of the disbursement date. If your discharged loans or TEACH Grant service obligation are reinstated, the Department will notify you. The notification will include the reason or reasons for the reinstatement, an explanation that the first payment due date on a loan following reinstatement will be no earlier than 60 days after the date of the reinstatement, and information on how you may contact the Department if you have questions about the reinstatement or believe the reinstatement was based on incorrect information.
Are there any tax implications to getting my loan discharged?
The Department of Education is required by law to report the discharge of any debt greater than $600 to the IRS as income in the year that the loan was discharged, not at the end of the 3-year monitoring period. The Department of Education will also send you an IRS Form 1099-C. This may result in federal or state tax liabilities, depending on your situation. We recommend that you consult with a tax professional to determine how this may affect your personal taxes.
If the Department determines that I am not eligible for discharge, can I appeal the determination?
There is no formal appeal process. However, you can reapply for discharge if you believe that your situation has changed and can provide additional documentation establishing your eligibility. Please also see the Dispute Resolution section of this site.
What happens if I want to return to school and receive new loans after receiving a discharge?
Please see Student Loan Eligibility After TPD Discharge.
I currently receive Social Security disability benefits. Does that mean I automatically qualify for a total and permanent disability discharge of my loan balance?
The Department’s disability standard for discharge purposes may differ from disability standards used by other federal agencies (such as the Social Security Administration) or by state agencies. Eligibility for Social Security disability benefits does not mean you are automatically eligible for TPD discharge.