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Can My Student Loans Be Cancelled if I Am Found Disabled?

If you have outstanding Federal Student Loans and you are found to be disabled, they can be cancelled or discharged, providing you meet the stringent requirements of the agency that awarded the loan.

A Total and Permanent Disability (TPD) discharge applies to a William D. Ford Federal Direct Loan (Direct Loan) Program loan, Federal Family Education Loan (FEEL) Program loan, and/or Federal Perkins Loan (Perkins Loan) Program loan, or complete a TEACH Grant service obligation on the basis for your total and permanent disability.

In order for this to occur, you must provide the requested information to the U.S. Department of Education to show your disability.  The information will be evaluated and a decision made regarding the discharge.

There are three ways to show your TPD:

  1. If you are a veteran, submit information showing that the VA has determined that you are unemployable due to a service-connected disability.
  2. If you are receiving Social Security Disability Insurance or SSI, submit a Notice of Award stating that your next scheduled disability review will be within five to seven years from the date of your most recent SSA disability determination.
  3. Submit certification from a physician that you are totally and permanently disabled. Your physician must certify that you are unable to engage in any substantial gainful activity by reason of a 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.

It is our experience that most Social Security Notices of Award do not contain information regarding scheduled disability reviews. After some research, we have found that this information is available to a Social Security disability recipient by requesting a Benefits Planning Query (BPQY). Once this information is obtained from Social Security, it should be submitted along with a copy of the Notice of Award.

Contact Nelnet; they assist in administering the TPD discharge process. Call Nelnet seven days a week from 8 a.m. to 8 p.m. at (888) 303-7818 or email [email protected].

If you have a Federal Student Loan and are on Social Security Disability, you can have it discharged with the right information. Contact Social Security today to get your Benefits Planning Query and start the process.