Explained: The Total and Permanent Disability Discharge Process

“Loan discharge” means you don’t have to pay back some or all of your loan(s). A total and permanent disability (TPD) discharge relieves you from having to repay any of your federal student loan(s) and from completing any TEACH Grant service obligation.

General Qualifications and Application Process for TPD

Please note: If you received notification that you are eligible for TPD, you will not need to provide supporting documentation showing that you are totally and permanently disabled.

If you have not received notification that you are eligible for TPD and would like to be considered, you must provide documentation from one of three sources:


1. The U.S. Department of Veterans Affairs (VA) 

We recently established a process with the VA to identify veterans who are eligible for a TPD discharge. If identified you, we will send you a notice and inform you that your loans will be discharged in 60 days unless you request to not receive a discharge. However, if you’re a disabled veteran who has not yet received notice that you’re eligible for TPD, you still qualify for a TPD discharge by providing documentation from the VA that shows you have received a VA disability determination because you (1) have a service-connected disability that is 100% disabling; or (2) are totally disabled based on an individual unemployability rating.


2. The Social Security Administration (SSA)

If you’re eligible for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), you can qualify for a TPD discharge if you provide 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.


3. A physician

A Doctor of Medicine (M.D.) or doctor of osteopathy/osteopathic medicine (D.O.), who is licensed to practice in the U.S., can certify Section 4 of your TPD discharge application by documenting that you are 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.

You can start your TPD discharge application online or download and print a blank TPD discharge application. To request a hard copy of a TPD discharge application, contact us at DisabilityInformation@Nelnet.net or 1-888303-7818.

Are you a caregiver?

A representative can complete and submit the TPD discharge application on the disabled borrower’s behalf after completing an Applicant Representative Designation form.


What happens after you’ve applied for TPD Discharge:

1. We’ll ensure that you do not need to make payments on your loans while we determine your eligibility for discharge. Please note: If any of your loans are in default and payments are being collected by wage garnishment or Treasury Offset, the garnishment or offset will continue. If your request for TPD discharge is approved, the wage garnishment or Treasury Offset will be discontinued.

2. TPD discharge application reviews typically takes less than 30 days to complete. However, incomplete discharge applications or delayed responses by your physician can prolong our review process.

3. If we determine that you are totally and permanently disabled based on your documentation, we will:

  • Notify you that your loan(s) and/or TEACH Grant service obligation have been discharged;
  • Ensure that you get a refund of any loan payments received after the date we obtained your VA or SSA documentation or the date the physician certified your discharge application;
  • Notify you that you will be subject to a three-year post-discharge monitoring period that begins on the date the discharge is approved, if you receive a TPD discharged based on documentation from SSA or a physician.

If you’re eligible for TPD, consider the following:

If you get a TPD discharge, you may need to pay state income tax on the discharged amount, even if you don’t have to pay federal income tax on that amount. If you get a TPD discharge, you may want to talk with your state tax office or a tax professional before you file your state tax return.

TPD discharge is not based on income. However, if your TPD discharge was based on documentation from the SSA or a physician, we may reinstate your federal student loan or TEACH Grant service obligation if for the first three years after you get a TPD discharge:

  • Your annual earnings from employment exceed the poverty guideline amount for a family of two in your state
  • You got a new Direct Loan, or a new TEACH Grant
  • You get a disbursement of a Direct Loan or TEACH Grant before you get a discharge, and you do not return the full amount of the disbursement within 120 days of when you received it
  • If you receive a notice from the SSA stating that you are no longer totally and permanently disabled, or that your disability review will be less than five to seven years from the date of your most recent SSA notice of award for SSDI or SSI benefits

If you’re a veteran whose TPD discharge application is approved based on documentation from the VA, you aren’t subject to a postdischarge three-year monitoring period list above.

If your Social Security benefits, wages, and tax refunds have been garnished due to your defaulted federal student loan, you may receive a reimbursement of those funds if you qualified for TPD at the time the funds were taken. Contact your loan holder to request a refund and learn more about what you need to do.