The government has erased $14.1 billion in student loans for 548,000 borrowers through the Total and Permanent Disability Discharge program.
Updated Aug 27, 2024 · 3 min read Written by Anna Helhoski Senior Writer Anna Helhoski
Senior Writer | Economic news, consumer finance trends, student loan debt
Anna Helhoski is a senior writer covering economic news and trends in consumer finance at NerdWallet. She is also an authority on student loans. She joined NerdWallet in 2014. Her work has appeared in The Associated Press, The New York Times, The Washington Post and USA Today. She previously covered local news in the New York metro area for the Daily Voice and New York state politics for The Legislative Gazette. She holds a bachelor's degree in journalism from Purchase College, State University of New York.
Assistant Assigning Editor Cecilia Clark
Assistant Assigning Editor | Education financing products, Veteran's benefits, Student and graduate finances
Cecilia Clark is an editor on the loans team. She specializes in student loans and manages product reviews and roundups. Previously, she worked as a freelance writer and developed communications strategies for cybersecurity firms. Cecilia has also worked in post-secondary education, elevator operations management and sales and military nuclear command control, maintenance management and public affairs.
Fact Checked Co-written by Colin Beresford Colin Beresford
Writer | Personal finance
Colin Beresford is a former NerdWallet student loans writer. He previously was an automotive business writer for Car and Driver magazine and is a graduate of the University of Michigan.
Co-written by Eliza Haverstock Lead Writer Eliza Haverstock
Lead Writer | Student loan repayment, paying for college
Eliza Haverstock is NerdWallet's higher education writer, where she covers all aspects of college affordability and student loans. Previously, she reported on billionaires and investing for Forbes in New York, and she also covered private markets for PitchBook in Seattle. Eliza got started at her college newspaper at the University of Virginia and interned for Bloomberg, where she spent a summer writing a feature story about plastic straws. She is based in Washington, D.C.
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Total and permanent disability discharge is a type of student loan forgiveness for borrowers who cannot work due to a physical or mental impairment.
To be granted forgiveness, you must prove that you’re unable to work due to a physical or mental impairment. You may also have to go through a three-year monitoring period after your loan is discharged.
As of July 2024, the White House has forgiven $14.1 billion in student debt for 548,000 borrowers with a total and permanent disability.
You won't owe any federal taxes on your forgiven loans through Dec. 31, 2025. However, you may face state taxes. Check your state's policy on taxing student loan forgiveness.
More information is available on the Education Department's disability discharge website .
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Compare RatesThe following loans can be forgiven under total and permanent disability discharge:
Loans through the Federal Family Education Loan Program (FFELP) . TEACH Grants that requires a service obligation.In 2021, this loan discharge program became automatic for anyone with a disability as recognized by the Social Security Administration or Department of Veterans Affairs.
If you qualify, your student loan servicer will send you a letter about the loan discharge and give you the opportunity to opt out.
One reason you might opt out is if your state considers the amount discharged as taxable income and the cost outweighs the benefit. Find out from your state tax office.
You can manually apply for a disability discharge of your student loans if you don't get an automatic discharge letter. Here are the steps to take:
Complete the Education Department's total and permanent disability discharge application . Attach supporting documentation of your eligibility for discharge.Send your application and documentation to Nelnet , the student loan servicer that processes disability discharges. You can also ask Nelnet for a 120-day payment pause while you're gathering your application materials. You automatically won't owe payments while it is processing your application.
Depending on your situation, you must supply supporting documentation from either the U.S. Department of Veterans Affairs, the Social Security Administration or a physician. Here’s what you need from each:
You must provide VA documentation showing you’ve received a VA disability determination because you:
Have one or more service-connected disabilities that are 100% disabling, or Are totally disabled based on an individual unemployability rating.The VA process is typically automatic.
You can qualify for the loan discharge if you’re eligible for Social Security Disability Insurance or Supplemental Security Income. You may have to show one of the following documents to prove your disability:
Your SSA notice of award, or Your Benefits Planning Query.The SSA process is typically automatic.
Your physician must sign your application and provide documentation to back up the claim that your impairment meets at least one of the following requirements:
It is expected to result in death. It has lasted continuously for a period of 60 months or greater. It is expected to last for a continuous period of 60 months or greater.If you qualify for a total and permanent disability discharge through the SSA or a medical professional, you'll face a three-year monitoring period.
During this time, your loan may be reinstated if:
You take out any new federal student loans. You get a notice from the SSA that you no longer have a total or permanent disability.This monitoring period does not apply if you qualify through the VA.
Yes. If you're approved for a loan discharge, Nelnet may refund you for previous payments you've made. The refund depends on how your qualified for the program:
If you qualified through the VA, Nelnet will refund any payments made on or after the effective date of the VA’s disability determination.
If you qualified through the SSA, Nelnet will refund any payments made after the date it received the SSA documentation.
If you qualified through a physician, Nelnet will refund any payments made after the date the physician certified your discharge application.
If Nelnet denies your application, it will explain why. Payments will immediately be due again.
You have 12 months after the denial to dispute it by providing new information that supports your case.
After 12 months, you must start over with a new discharge application if you wish to reapply.
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Anna Helhoski is a senior writer covering economic news and trends. Her work has appeared in The Associated Press, The New York Times, The Washington Post and USA Today. See full bio.
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Colin Beresford is a former student loans writer at NerdWallet. Previously, he was an automotive business writer for Car and Driver magazine. See full bio.
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Eliza Haverstock is a lead writer on NerdWallet's student loan team covering loan repayment and alternatives to traditional four-year degrees. See full bio.
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