Trying to Understand Disability Student Loan Forgiveness? Here are Your Options

Federal student loan borrowers qualify for disability student loan forgiveness if they suffer from any mental or physical disability that is severe, or permanent and prevents them from engaging in substantial gainful activity. Proof of the disability can come from a doctor, the SSA, or the VA.

Borrowers with disabilities can have their student loan debt discharged if a permanent physical or mental impairment prevents them from working. The Department of Education accepts proof of your disability from a doctor, the Social Security Administration, or the Department of Veterans Affairs. Some private lenders may rely on the same information.

Ahead, learn what disabilities qualify for student loan forgiveness and how to apply for a total and permanent disability discharge (TPD discharge).

Any permanent physical or mental impairment that prevents you from working can qualify for student loan forgiveness. For example, borrowers have received a TPD discharge due to:

• stage IV or terminal cancer

• chronic fibromyalgia

• degenerative disc disease (severe back pain)

• major depression

• bipolar disorder

Attention-deficit hyperactivity disorder, on the other hand, is typically not severe enough to cause measurable functional impairments that keep you from working. It’s worth looking into, though. If your doctor believes that it causes significant impairment, you can still apply for cancellation due to ADHD.

The SSA maintains a list of adult impairments, any of which could qualify you for disability discharge.

Learn More: Income-Driven Repayment Plan Forgiveness

All federal student loans are eligible to qualify for tpd discharge due to disability, including:

• Direct Loans.

• Federal Parent PLUS Loans — discharged only if the parent becomes disabled.

• Federal Family Education Loans (FFEL).

• Federal Perkins Loans.

• Joint Spousal Consolidation Loans — the non-disabled spouse will still be responsible for the loan.

For private student loan debt, contact your lender to learn if they’ll forgive your loans due to disability. Read more about private student loan forgiveness programs.

Learn More: Can Defaulted Student Loans be Forgiven?

There are three options to prove your disability and start the discharge process:

• Physician’s certification: Your primary care physician or specialist can certify they believe you can no longer work due to your medical issues. To apply, you will need to download a PDF copy of the Total and Permanent Disability Discharge Application form and get your doctor’s certification.

• Social Security Notice of Award: You qualify if two things are true: First, you receive Social Security Disability Insurance or Supplemental Security Income benefits. Second, your notice of award letter from the Social Security Administration must say that your next scheduled disability review will be within five to seven years from the date of your most recent SSA disability determination.

• Veteran Affairs Determination Letter: If you are a veteran with a service-connected condition that has left you unemployable, you can qualify for this type of loan discharge without providing documentation from your doctor. As a veteran, you will qualify if you have a letter from the VA stating you either have a service-connected disability that is 100% disabling or if you are totally disabled based on an individual unemployability rating.

Related: Student Loan Forgiveness for Veterans

Not long ago, Education Secretary Miguel Cardona announced the department would provide automatic TPD discharges using data matching to identify borrowers listed in the SSA and VA’s system as having a qualifying disability rating.

In addition to removing this application barrier, the department shared it would:

• Stop asking borrowers to provide information about their current income.

• Pursue eliminating the three-year monitoring period for income.

Borrowers seeking disability discharge based on a physician’s certification do not qualify for this automatic forgiveness. They can start the student loan forgiveness for disability process by visiting disabilitydischarge.com. That website, which is administered by the student loan servicer Nelnet, allows you to apply online or by submitting a paper form.

You have four options to submit the application:

• Submit TPD form by postal mail: US Department of Education, PO Box 87130, Lincoln, NE 68501-7130.

• Submit TPD form by fax: 303-696-5250.

• Submit TPD form by email: DisabilityInformation@Nelnet.net.

• Submit TPD form online: https://secure.disabilitydischarge.com.

Learn More: Student Loan Forgiveness During Coronavirus

To discharge your loans due to a physical or mental impairment, you’ll need to complete the Total and Permanent Disability Discharge Application. The TPD Discharge form is two pages long.

You’ll complete the first page and, if you’re applying based on a disability rating from the SSA or VA, you’ll attach a benefits letter from the agency and submit the application.

If you’re getting your doctor to certify that you’re severely and permanently disabled, then you’ll complete the first page and have your treating physician complete the second page.

Once done, you’ll submit the form to Nelnet for processing using one of the options listed above.

The application process from start to discharge often takes less than 30 days to complete.

You can check the application status by contacting Nelnet at 888-303-7818. Customer service representatives are available Monday–Friday from 7 am to 2 am EST and Saturday from 8 am to 7 pm EST. You can also email the loan servicer at DisabilityInformation@Nelnet.net.

If your application is approved based on a physician’s certification, you’ll be put under a three-year post-discharge review where the Education Department will check your earnings.

For the three years after this review begins, you’ll need to file paperwork showing your income for the past tax year. If your income exceeds the Poverty Guideline amount for a family size of two for your state — no matter your actual family size — your balance can be reinstated. The easiest way to prove your income during the three-year monitoring period is to provide a copy of your tax return, W-2, or Social Security benefits award letter. You can get that letter at ssa.gov.

You can avoid this monitoring period if your discharge was granted based on SSA or VA documentation, following policy changes made under the Trump and Biden administrations.

After the period ends, your loans will officially be discharged. You’ll no longer need to report your income or update your contact information. Here are three other things that will happen:

Refund of payments. You will get a refund for payments made after Nelnet gets notice of your disability, but payments made before this notice was received won’t be refunded.

Taxable income. Not so long ago, legislators passed two laws — The Tax Cuts and Job Act and The American Rescue Plan Act — that made all student loan forgiveness — even for disability — tax free through December 31, 2025. These laws apply only to federal tax liability with the IRS, however. Consult with your state tax office or a tax professional to see if you’ll owe income taxes for the discharged loans.

Credit report updated. Not long after the discharge is granted, the lender or servicer will contact the credit bureaus and report the status change. This update shouldn’t have a negative impact on your credit score, but your score could drop if you get the loans removed from your credit history.

Learn More: Income-Driven Repayment Plan Forgiveness