The Total Permanent Disability (TPD) student loan discharge program is a program in which federal student loans are forgiven if you are considered “totally and permanently disabled.” These loans include William D. Ford Federal Direct Loan (Direct Loan) Program loans, Federal Family Education Loan (FFEL) Program loans, Federal Perkins Loan (Perkins Loan) Program loans, and Teacher Education Assistance for College and Higher Education (TEACH) grants. This program is administered through the Department of Education (the Department).
Nelnet, a financial institution, contracts with the Department to directly assist borrowers with the TPD discharge process, as well as conduct the initial eligibility screening of borrowers seeking TPD discharge.
In recent years, the Department has begun an administrative data match partnership with the Social Security Administration (SSA), which helps to identify beneficiaries and recipients who may qualify for TPD. We will be focusing on this method.
The Department announced some changes on August 19 that would make this program more effective and expeditious for borrowers. SSA beneficiaries will no longer have to fill out the TPD discharge application if they are identified by the SSA administrative data match. Instead, you will receive an automatic TPD discharge according to the press release. Eligible SSDI and SSI recipients have the option to opt out of the automatic TPD discharge if they wish to do so.
As it currently stands, borrowers approved for TPD discharge must adhere to the three-year post-discharge monitoring period. If, at any point during the three-year post-discharge monitoring period your annual earned income exceeds the poverty guideline in your state for a family of two regardless of family size, you receive a new federal student loan, or if the Department is notified by SSA that you are no-longer disabled or eligible for benefits, you will be required to pay back your previously forgiven federal student loans. In 2021, the poverty guidelines for a family of two are $21,770 for Alaska residents, $20,040 for Hawaii residents, and $17,420 for the remaining 48 states and the District of Columbia.