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Disabled Individuals’ Student Loans Canceled!

Osterhout Berger Disability Law > Articles > Disabled Individuals’ Student Loans Canceled!

It goes without saying that one of the many challenges that the disabled face, in addition to ensuring month to month necessities such as housing, heat, food, medicine and insurance, are debts accumulated in better times before the onset of disability. Struggling to make car or house payments, credit card balances, etc., are significant added stresses which interfere with the ability to profit from treatments for their medical conditions.

Some very important relief has arrived in the form of the Biden Administration’s announcement on August 19, 2021 that it will be canceling some student loan debt through the Total and Permanent Disability (TPD) discharge program. TPD allows those with student loan debt to have their loans forgiven if they are unable to maintain substantial gainful employment due to physical and/or mental impairments. The information page of the TPD online, https://www.disabilitydischarge.com/Application-Process, explains that an application process must be processed online, and very clearly explains those steps. There is also an option to contact TPD by phone or email to obtain to have the paperwork physically mailed to the applicant. Claimants for this waiver can be represented, as long as the representative has filed an official designation form.

Federal Student Aid (FSA) regularly receives information from the US Department of Veterans Affairs and Social Security Administration regarding those who have been identified as 100% disabled for VA benefits, or who have been found disabled for SSA disability benefits (without a review period of shorter than 5 years). In cases where disability is acknowledged by a VA or SSA decision finding a claimant disabled, FSA is saying that they will contact these people directly to inform them of their right to apply for the TPD waiver. And, FSA is saying that in those cases it will not be necessary to submit any medical documentation because the determination by VA or SSA will be accepted as proving disability for the purposes of the TPD waiver. An application will still need to be filed in these cases, but it looks as though, at least in most cases, submitting proof of disability will not be necessary. As such, cases where another federal agency like VA or SSA have determined that the claimant is disabled promises to be a fairly painless process.

And, even in cases where there has not already been a VA or SSA determination of disability, an applicant for a TPD waiver can submit an application along with a certification from a physician showing inability to engage in any substantial gainful activity because of a mental and/or physical impairment. Such an impairment(s) will be considered as “disabling” and establish eligibility for a TPD waiver if one of three conditions is met: (1) the medical condition can be expected to result in death; (2) the medical condition has lasted for a continuous period of at least 60 months (5 years); or (3) the medical condition can be expected to last for a continuous period of at least 60 months. (While the information page describes FSA’s process of reviewing the application and forwarding its recommendation to the Department of Education for a final decision, at least at this time it does not appear to contain any deadlines for how quickly they make their decision.)

Of note: the TPD information page clearly says that if someone has a student loan that is currently in default, with payments being made by wage garnishment and/or Treasury Offset, FSA is still entitled to those payments until the TPD waiver request is approved. It does not discuss the retroactive effect of a TPD waiver approval – in other words, if someone is found disabled for the last 5 years, the website does not indicate whether that would mean that there is a refund for any garnishments or offsets already made – this is something that OBL will be following very closely.

In short, TPD is one very valuable benefit that disabled individuals can take advantage of while trying to restructure their life after disability.

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