Presented by:

Sally Clymer

Juliane Soprano


Beware of Consequences

In 1965 legislation was passed authorizing the discharge of some federal student loans for individuals who have become “totally and permanently disabled”. [1] This is commonly referred to as a “TPD” discharge. Unfortunately, many of the people the law is designed to benefit, namely people with a disability, are not even aware it exists and therefore do not take advantage of it.

Prior to 2012, an application had to be submitted to each individual lender. This process was complicated and often overwhelming. In 2012 legislation was passed to streamline the process allowing for a single application to the Department of Education, the agency charged with administering the TPD student loan debt program. Although this legislation was an improvement, it did not address the fact that eligible individuals continued to be unaware of the availability of this fed loan program.

Toward that end, beginning on April 18, 2016 through August 18, 2016, the Department of Education (DOE) will send notices to social security disability (SSD) and supplemental security income (SSI) recipients that have been designated by the social security administration (SSA) as “permanently disabled”. These notices will make people aware of their eligibility for student loan forgiveness as well as include a completed application for the TPD discharge. Below is a summary of the process and the consequences of receiving a discharge of student loan debt

(1) Receipt of letter and application for student loan forgiveness from the DOE;

(2) Sign and return application to DOE (retain copy for your records)

(3) Once DOE receives the application it will contact the lenders of your federal loans (fed loans) and suspend monthly payments;

(4) DOE processes your application for TPD student loan forgiveness, which takes approximately 3-5 months.   During this time your fed loan payment(s) will not be deducted from your disability checks.

(5)  If the application is approved, the loans will be permanently discharged. This means your student loan debt or fed loan payment will no longer be due.

(6) If the application is denied, the student loan debt will not be discharged and deductions will be reinstated and due as they were previously.

Although this may sound too good to be true, it is not. It’s an effort by the federal government to further the purposes of the disability program under social security, which is to be fair and just to those who are disabled from work. However, there are consequences individuals must be aware of:

(1) If your prior loans have been forgiven your ability to acquire future financial aid in the form of loans may be limited.   You may be ineligible or restricted in your ability to qualify for student loan forgiveness in the future; and

(2) Any student loan debt over $600 that is forgiven will be considered income and subject to income tax. Under some circumstances this may increase the taxes you owe. Consult a tax specialist for future information about your specific situation.

If the above consequences make a TPD discharge unrealistic, other options for relief are available in the form of debt consolidation or lowering the monthly payments through the William D. Ford Direct Loan Program.

If you currently receive disability benefits from Social Security and believe you may be eligible for a TPD discharge, contact the department of education at 1-888-303-7818.

For more information please go to

For financial aid resources visit Student


[1] A TPD discharge relieves you from having to repay a William D. Ford Federal Direct Loan (Direct Loan) Program loan, Federal Family Education Loan (FFEL) Program loan, and/or Federal Perkins Loan (Perkins Loan) Program loan or complete a TEACH Grant service obligation on the basis of your total and permanent disability.