How to Qualify for a TPD Discharge
The U.S. Department of Education manages the TPD Discharge program, with a loan servicer named Nelnet handling all applications. To qualify, you must provide documentation from one of three approved sources:
- U.S. Department of Veterans Affairs (VA): You are eligible if you have documentation from the VA showing you have a service-connected disability that is 100% disabling or are totally disabled based on an individual unemployability rating. In many cases, the VA proactively identifies eligible borrowers and notifies the Department of Education, which may lead to an automatic discharge offer.
- Social Security Administration (SSA): You can qualify if you receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits. Your SSA notice of award must state that your next continuing disability review is scheduled within five to seven years or more from your last determination.
- Physician’s Certification: If you do not qualify through the VA or SSA, a licensed doctor of medicine (M.D.) or osteopathy (D.O.) can certify on the official TPD application form that you are unable to perform any substantial gainful activity due to a physical or mental impairment. The impairment must be expected to result in death, have lasted for a continuous 60 months, or be expected to last for a continuous 60 months.
Once you apply, your loan payments are paused while Nelnet reviews your case. You can start the application process at the official DisabilityDischarge.com website.
The Post-Discharge Monitoring Period
After a TPD Discharge is approved, you enter a three-year post-discharge monitoring period. During this time, your discharged loans can be reinstated if you do not follow specific rules. Your obligation to repay the loan will be reinstated if you:
- Have annual employment earnings that exceed the Poverty Guideline amount for a family of two in your state, regardless of your actual family size.
- Take out a new federal student loan, such as a Direct Loan or Perkins Loan, or receive a new TEACH Grant.
- Receive a notice from the SSA that you are no longer disabled or your disability review is no longer set for 5-7+ years.
- Fail to provide requested documentation of your income during the monitoring period.
This monitoring period is a critical phase, and staying compliant is essential to ensure your debt remains forgiven permanently.
Is a Total and Permanent Disability Discharge Taxable?
Under the American Rescue Plan Act of 2021, student loan debt discharged for any reason, including TPD, is not considered taxable income at the federal level through December 31, 2025. This prevents borrowers from facing a surprise tax bill after receiving debt discharge. However, some states may have different tax laws, so consulting with a tax professional is recommended.
Frequently Asked Questions (FAQs)
- What loans are eligible for TPD Discharge?
- Only federal student loans—including Direct Loans, Federal Family Education Loan (FFEL) Program loans, and Perkins Loans—and TEACH Grant service obligations are eligible. It does not apply to private student loans, although some private lenders may offer their own disability forgiveness programs.
- What happens if my TPD application is denied?
- If your application is denied, you can reapply if your condition worsens or if you have new medical evidence to support your claim. You will be required to resume payments on your loans once a final denial is issued.
- What is “substantial gainful activity”?
- According to the Department of Education, substantial gainful activity is a level of work performed for pay or profit that involves significant physical or mental tasks. During the three-year monitoring period, earning income above the federal poverty guideline for a two-person household is considered substantial gainful activity and will cause your loans to be reinstated. You can find the current figures on the Department of Health & Human Services website.
