Can You Get Student Loans Forgiven If You Are on Disability?

If you are living with a significant disability, you may find relief from federal student loan obligations through the Total and Permanent Disability (TPD) discharge program. This program can eliminate the need to repay eligible federal student loans by guiding you through the requirements and steps involved.

Understanding Total and Permanent Disability Discharge Eligibility

There are three main pathways to establish eligibility for a Total and Permanent Disability (TPD) discharge, each requiring specific documentation.

One pathway for qualification is through the U.S. Department of Veterans Affairs (VA). If you are a veteran, you may qualify by providing documentation from the VA indicating a service-connected disability that is 100% disabling, or if you are considered unemployable due to a service-connected disability.

Another common method involves the Social Security Administration (SSA). You can qualify if you receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits. To meet this criterion, your SSA notice of award or Benefits Planning Query must show that your next continuing disability review is scheduled within five to seven years from the date of your last SSA disability determination.

The third pathway for TPD discharge is through certification by a licensed medical professional. A licensed medical professional (MD, DO, NP, PA, or certified psychologist) must confirm that you are unable to engage in any substantial gainful activity (SGA) due to a physical or mental impairment. This impairment must be expected to result in death, or have lasted or be expected to last for a continuous period of at least 60 months.

Substantial gainful activity refers to a level of work performed for pay or profit that involves significant physical or mental activities. For 2024, the monthly SGA income threshold is $1,550 for non-blind individuals and $2,590 for blind individuals. These thresholds are adjusted annually, with the 2025 limits set at $1,620 per month for non-blind individuals and $2,700 for blind individuals.

Eligible federal student loans include William D. Ford Federal Direct Loan (Direct Loan) Program loans, Federal Family Education Loan (FFEL) Program loans, and Federal Perkins Loans. Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligations may also be discharged. Private student loans are generally not eligible for this federal discharge program. If you have private student loans, you should contact your specific lender to inquire about any disability discharge options they may offer.

Gathering Documentation for Your Application

After understanding the eligibility criteria, prepare your application by gathering all necessary documentation. The Total and Permanent Disability (TPD) discharge application process is managed by Nelnet, the servicer for the U.S. Department of Education.

You can obtain the official TPD discharge application form through DisabilityDischarge.com or by contacting Nelnet directly. The application form requires specific details based on your chosen eligibility pathway. Accuracy and completeness are important when filling out the form.

If you are applying based on a VA determination, you will need to provide documentation from the VA that confirms your 100% disability rating or unemployability due to a service-connected disability. For those qualifying through the SSA, you will need to submit a copy of your SSA notice of award or Benefits Planning Query. This documentation must explicitly state your next continuing disability review period, as outlined in the eligibility requirements.

For applicants relying on a physician’s certification, the medical professional must complete a specific section of the application form. This section requires the physician to certify your inability to engage in substantial gainful activity due to a qualifying impairment. The physician must provide their signature, date of certification, license number, and state of licensure. This section must be completed within 90 days of the physician’s signature if you are submitting a paper application.

Beyond the primary documentation for your disability, you may also need to include supporting documents such as proof of identity. Additional medical records that corroborate your physician’s certification can be beneficial in strengthening your application. Ensure all required sections of the form are filled out accurately before proceeding.

Submitting Your Application and What Happens Next

After gathering all necessary documentation and completing your application, the final step is submission. You have several options for submitting your Total and Permanent Disability (TPD) discharge application, including online, mail, or fax.

For online submission, you can upload your completed application and supporting documents through the DisabilityDischarge.com portal or via StudentAid.gov. If you prefer to mail your application, the address is U.S. Department of Education, P.O. Box 87130, Lincoln, NE 68501-7130. Alternatively, you can fax your application to 303-696-5250. Once submitted, a temporary suspension of loan payments and collection activities typically begins while your discharge application is under review.

The review process is conducted by Nelnet, in coordination with the Department of Education. You can generally expect to receive a decision regarding your application within 30 days of submission. If approved, you will be notified that your loans and/or TEACH Grant service obligation have been discharged. If denied, you will receive a notification explaining the reason, and your loans will return to their regular repayment status.

If your TPD discharge is approved based on SSA documentation or a physician’s certification, you will be subject to a three-year post-discharge monitoring period. This period begins on the date your discharge is approved. During this time, you must not take out any new federal student loans or TEACH Grants, nor engage in substantial gainful activity (SGA). If your annual employment earnings exceed the federal poverty guideline for a family of two (for 2024, $20,440; for 2025, $21,150), your loans may be reinstated. Failing to meet these requirements can result in the reinstatement of your discharged loans, with original terms and interest applying. Veterans who qualify for TPD discharge based on VA documentation are not subject to this three-year monitoring period.

Regarding tax implications, the Tax Cuts and Jobs Act of 2017 made TPD discharges tax-free at the federal level for discharges occurring between 2018 and 2025. State tax laws vary, and some states may still consider the discharged amount as taxable income. It is advisable to consult with a tax professional regarding your specific state’s regulations.