Understanding the TPD Process
The following graphic explains how the total and permanent disability discharge application process works. Click on each step to view a description of the process.
NOTE: Certain veterans may apply for discharge through a separate process. Please see Veterans Disability Discharge for more information.
STEP 1: Complete Application
The borrower completes the discharge application and has his or her physician complete Section 4 of the form to certify that the borrower is totally and permanently disabled.
STEP 2: Return Application
The borrower sends his or her completed application to each loan holder collecting debt from the borrower. The application must be received by the borrower's loan holder(s) within 90 days from the date of his or her physician’s signature on the application.
Note: If the application is not received by the loan holder(s) within 90 days from the date the borrower's physician signed the application, the application will be returned to the borrower.
If a borrower receives a FFEL, Perkins, or Direct Loan program loan or a TEACH Grant prior to the date the physician signed the application (the Physician Signature Date) and a disbursement of that loan or grant is made on or after the Physician Signature Date and before the date the U.S. Department of Education (the Department) grants discharge, the loan holder must suspend processing of the borrower’s loan discharge request until the borrower ensures that the full amount of the disbursement has been returned to the loan holder or to the Department, as applicable.
STEP 3: Application Review
If the loan holder determines that the discharge application supports the conclusion that the borrower is totally and permanently disabled, the loan holder assigns the loan to the U.S. Department of Education (the Department). The Department will be the new loan holder.
If the loan holder determines that the application DOES NOT support the conclusion that the borrower is totally and permanently disabled, the loan holder will require the borrower to resume repayment of the loan.
If the Department also determines that the discharge application supports the conclusion that the borrower is totally and permanently disabled, the Department discharges the loan and/or TEACH Grant service obligation.
If the Department determines that the discharge application DOES NOT support the conclusion that the borrower is totally and permanently disabled, the Department requires the borrower to resume repayment of his or her loan and/or comply with the terms of the borrower’s TEACH Grant service obligation.
STEP 4: Discharge
The Department grants discharge of the loan and refunds any payments received after the date the physician signed the application.
A 3-year monitoring period begins on the date the Department granted discharge.
STEP 5: 3-Year Post-Discharge Monitoring Period
The Department will reinstate the borrower’s obligation to repay the discharged loan or to complete the discharged TEACH Grant service obligation if, within 3 years following the date the Department grants the discharge, the borrower:
1. Has annual employment earnings that exceed the Poverty Guidelines for a family of two in the borrower’s state;
2. Receives a new Perkins or Direct Loan or a new TEACH Grant; or
3. Fails to return a loan disbursement to the loan holder or TEACH Grant disbursement to the Department within 120 days of the disbursement date, in the case of a loan or a TEACH Grant that was made before the discharge date, but was disbursed during the 3-year post-discharge monitoring period.
During the 3-year post-discharge monitoring period, the borrower must promptly notify the Department if the borrower receives annual earnings from employment that exceed the poverty line amount for a family of two in his or her state, regardless of actual family size; or if there is a change in the borrower’s address or telephone number. If requested, the borrower must also provide the Department with documentation of his or her annual earnings from employment.
Notification of Reinstatement
If the borrower’s obligation to repay a loan or complete a TEACH Grant service obligation is reinstated, the Department will notify the borrower of the reinstatement. This notification will include:
The reason(s) for the reinstatement;
For loans, an explanation that the first payment due date following the reinstatement will be no later than 60 days following the notification of reinstatement; and
Information on how the borrower may contact the Department if he or she has questions about the reinstatement, or if the borrower believes that his or her obligation to repay a loan or complete a TEACH Grant service obligation was reinstated based on incorrect information.
The borrower is not eligible for future loans under the Perkins Loan or Direct Loan Programs, or future TEACH Grants, unless the borrower meets certain requirements. See the conditions listed here.