213 – Total Permanent Disability (TPD)
- BORROWER’S TPD
- VETERAN’S TPD (SEE BELOW)
BORROWER’S TPD
A borrower’s Direct Loan is discharged if the borrower becomes totally and permanently disabled and satisfies the eligibility requirements in this section.
Discharge application process for a borrower who is totally and permanently disabled
Borrower application for discharge.
To qualify for a discharge of a Direct Loan based on a total and permanent disability, a borrower must submit a discharge application.
If the borrower notifies the Secretary that the borrower claims to be totally and permanent disabled prior to submitting a total and permanent disability discharge application, the Secretary provides the borrower with information needed for the borrower to apply for a total and permanent disability discharge, suspends collection activity on any of the borrower’s title IV loans held by the Secretary for a period not to exceed 120 days; and informs the borrower that the suspension of collection activity will end after 120 days and collection will resume on the loans if the borrower does not submit a total and permanent disability discharge application to the Secretary within that time.
Physician certification or Social Security Administration (SSA) disability notice of award
The application must contain –
- A certification by a physician, who is a Doctor of Medicine or osteopathy legally authorized to practice in a State, that the borrower is totally and permanently disabled; OR
- An SSA notice of award for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits indicating that the borrower’s next scheduled disability review will be within five to seven years.
Deadline for application submission
The borrower must apply to the Secretary within 90 days of the date the physician certifies the application, if applicable.
If, after reviewing the borrower’s completed application, the Secretary determines that the physician’s certification or the SSA notice of award for SSDI or SSI benefits supports the conclusion that the borrower meets the criteria for a total and permanent disability discharge, the borrower is considered totally and permanently disabled –
(A) As of the date the physician certified the borrower’s application; or
(B) As of the date the Secretary received the SSA notice of award for SSDI or SSI benefits.
The Secretary may require the borrower to submit additional medical evidence if the Secretary determines that the borrower’s application does not conclusively prove that the borrower is totally and permanently disabled. As part of the Secretary’s review of the borrower’s discharge application, the Secretary may require and arrange for an additional review of the borrower’s condition by an independent physician at no expense to the borrower.
IF APPROVED:
After determining that the borrower is totally and permanently disabled, the Secretary discharges the borrower’s obligation to make any further payments on the loan, notifies the borrower that the loan has been discharged, and returns to the person who made the payments on the loan any payments received after the date the physician certified the borrower’s loan discharge application or the date the Secretary received the SSA notice of award for SSDI or SSI benefits.
The notification to the borrower explains the terms and conditions under which the borrower’s obligation to repay the loan will be reinstated, as specified in paragraph (b)(7)(i) of this section.
IF DENIED:
If the Secretary determines that the physician’s certification or the SSA notice of award for SSDI or SSI benefits provided by the borrower does not support the conclusion that the borrower is totally and permanently disabled, as described in paragraph (1) of the definition of that term in § 685.102(b), the Secretary notifies the borrower that the application for a disability discharge has been denied. The notification to the borrower includes –
(A) The reason or reasons for the denial;
(B) A statement that the loan is due and payable to the Secretary under the terms of the promissory note and that the loan will return to the status that would have existed if the total and permanent disability discharge application had not been received;
(C) The date that the borrower must resume making payments;
(D) An explanation that the borrower is not required to submit a new total and permanent disability discharge application if the borrower requests that the Secretary re-evaluate the borrower’s application for discharge by providing, within 12 months of the date of the notification, additional information that supports the borrower’s eligibility for discharge; and
(E) An explanation that if the borrower does not request re-evaluation of the borrower’s prior discharge application within 12 months of the date of the notification, the borrower must submit a new total and permanent disability discharge application to the Secretary if the borrower wishes the Secretary to re-evaluate the borrower’s eligibility for a total and permanent disability discharge.
Conditions for reinstatement of a loan after a total and permanent disability discharge.
The Secretary reinstates a borrower’s obligation to repay a loan that was discharged if, within three years after the date the Secretary granted the discharge, the borrower –
- Has annual earnings from employment that exceed 100 percent of the poverty guideline for a family of two, as published annually by the United States Department of Health and Human Services pursuant to 42 U.S.C. 9902(2);
- Receives a new TEACH Grant or a new loan under the Perkins or Direct Loan programs, except for a Direct Consolidation Loan that includes loans that were not discharged;
- Fails to ensure that the full amount of any disbursement of a title IV loan or TEACH Grant received prior to the discharge date that is made is returned to the loan holder or to the Secretary, as applicable, within 120 days of the disbursement date; or
- Receives a notice from the SSA indicating that the borrower is no longer disabled or that the borrower’s continuing disability review will no longer be the five- to seven-year period indicated in the SSA notice of award for SSDI or SSI benefits.
If the borrower’s obligation to repay the loan is reinstated, the Secretary –
- Notifies the borrower that the borrower’s obligation to repay the loan has been reinstated;
- Returns the loan to the status that would have existed if the total and permanent disability discharge application had not been received; and
- Does not require the borrower to pay interest on the loan for the period from the date the loan was discharged until the date the borrower’s obligation to repay the loan was reinstated.
Borrower’s responsibilities after a total and permanent disability discharge
During the three-year period following the TPD determination, the borrower must –
- Promptly notify the Secretary of any changes in the borrower’s address or phone number;
- Promptly notify the Secretary if the borrower’s annual earnings from employment exceed the amount specified in paragraph (b)(7)(i)(A) of this section;
- Provide the Secretary, upon request, with documentation of the borrower’s annual earnings from employment on a form provided by the Secretary; and
- Promptly notify the Secretary if the borrower receives a notice from the SSA indicating that the borrower is no longer disabled or that the borrower’s continuing disability review will no longer be the five- to seven-year period indicated in the SSA notice of award for SSDI or SSI benefits.
For veterans who are totally and permanently disabled, the veteran’s loan discharge application is processed in accordance with below:
Discharge application process for veterans who are totally and permanently disabled
Veteran’s application for discharge. To qualify for a discharge of a Direct Loan based on a total and permanent disability, a veteran must submit a discharge application to the Secretary, accompanied by documentation from the Department of Veterans Affairs showing that the Department of Veterans Affairs has determined that the veteran is unemployable due to a service-connected disability.
The Secretary does not require the veteran to provide any additional documentation related to the veteran’s disability. Upon receipt of the veteran’s application, the Secretary –
- Identifies all title IV loans owed by the veteran and notifies the lenders that the Secretary has received a total and permanent disability discharge application from the borrower;
- If the application is incomplete, requests the missing information from the veteran and does not make a determination of eligibility for discharge until the application is complete;
- Notifies the veteran that no payments are due on the loan while the Secretary determines the veteran’s eligibility for discharge; and
- Explains the Secretary’s process for reviewing total and permanent disability discharge applications.
- The Secretary will consider a borrower for whom data is obtained from the Department of Veterans Affairs showing that the borrower is “totally and permanently disabled” to be eligible for discharge and will not require additional documentation to discharge the borrower’s loans.
IF APPROVED:
If the Secretary determines, based on a review of the documentation from the Department of Veterans Affairs, that the veteran is totally and permanently disabled, the Secretary discharges the veteran’s obligation to make any further payments on the loan and returns to the person who made the payments on the loan any payments received on or after the effective date of the determination by the Department of Veterans Affairs that the veteran is unemployable due to a service-connected disability.
IF DENIED:
If the Secretary determines, based on a review of the documentation from the Department of Veterans Affairs, that the veteran is not totally and permanently disabled, the Secretary notifies the veteran that the application for a disability discharge has been denied. The notification to the veteran includes:
- The reason or reasons for the denial;
- An explanation that the loan is due and payable to the Secretary under the terms of the promissory note and that the loan will return to the status it was in at the time the veteran applied for a total and permanent disability discharge;
- The date that the veteran must resume making payments;
- An explanation that the veteran is not required to submit a new total and permanent disability discharge application if the veteran requests that the Secretary re-evaluate the veteran’s application for discharge by providing, within 12 months of the date of the notification, additional documentation from the Department of Veterans Affairs that supports the veteran’s eligibility for discharge; and
- Information on how the veteran may reapply for a total and permanent disability discharge in accordance with the procedures described in paragraph (b) of this section if the documentation from the Department of Veterans Affairs does not indicate that the veteran is totally and permanently disabled as described in paragraph (2) of the definition of that term in § 685.102(b), but indicates that the veteran may be totally and permanently disabled as described in paragraph (1) of the definition of that term.