Adjusting to life with an injury or chronic illness is undoubtedly a challenge, especially if it has an impact on your ability to work and earn a living. Luckily, federal student loan borrowers with disabilities may be able to qualify to have all or some of their federal student loans canceled through what is known as a total and permanent disability, or TPD, discharge.
Learn more about how TPD works if you’re a borrower with a permanent medical situation.
What Is a TPD Discharge?
“TPD refers to total and permanent disabled, meaning you won’t be able to work, you wouldn’t have income, and so you wouldn’t be able to pay back your student loans,” says Megan Walter, senior policy analyst with the National Association of Financial Aid Administrators. “This is different from economic hardships or unemployment deferments.”
If you are temporarily unable to work because of an injury or illness, that isn’t the same thing as TPD. In those cases, you may still be able to find some relief by reaching out to your student loan servicer to discuss options that may be available to lower your monthly payment amount or pause your payments. With TPD discharge, however, you may be able to achieve full relief from having to pay back direct loans, some Federal Family Education Loans, Perkins loans and TEACH Grant service obligations.
How to Qualify for TPD Discharge
Prior to 2019, all borrowers were required to submit an application for a TPD discharge. However, because failure to apply prevented many borrowers from receiving relief, the department began to automatically forgive the loans of federal student loan borrowers who were identified by the U.S. Department of Veterans Affairs and the Social Security Administration.
Both the VA and the SSA use a data matching system to help the U.S. Department of Education identify borrowers who qualify for a TPD discharge based on their status.
— Automatic discharge via the VA: This is an automatic determination that you are totally unemployable either due to a service-connected disability or based on an individual unemployability rating.
— Automatic discharge via the SSA: The Department of Education works with the SSA to identify people who qualify for Disability Insurance or Supplemental Security Income benefits, who would then also qualify for student loan discharge.
Once the Education Department is alerted that a borrower qualifies for this discharge, it will automatically forgive student loans and/or the TEACH Grant service obligation, meaning they will not have to apply for a TPD discharge.
Borrowers who are identified for an automatic discharge will receive a notice of approval for a discharge and are given the opportunity to opt out, but do not have to do anything if they wish to have their loans forgiven.
[Read: Best Private Student Loans.]
Additional Way to Qualify
If you believe that you qualify but have not received an automatic discharge, you can also attempt to have your loans discharged by certifying that you are unable to work or earn an income due to an injury or illness from which you are not expected to improve or recover.
This process involves a certification from an authorized medical professional. You must get evaluated and receive documentation from one of a: doctor of medicine, doctor of osteopathy, nurse practitioner, physician assistant or certified psychologist.
The certification means you are “unable to engage in any substantial gainful activity” because of a mental or physical impairment that can be expected to result in death. The condition must have lasted continuously for at least 60 months, or can be expected to last continuously for at least 60 months.
[Read: Best Student Loan Refinance Lenders.]
How to Apply for TPD Discharge
To apply for a TPD discharge, you can submit via the StudentAid.gov website. The application can be completed in 10 minutes or less online.
If your request for TPD discharge is denied, you may be able to ask for a reevaluation of the application. This would involve providing new supporting information about your eligibility for discharge within 12 months of the denial notification date.
Can You Have Private Loans Discharged for a TPD?
“There is no single federal disability discharge standard applied to private lenders,” says Casey Yontz, bankruptcy attorney and founder of USBankruptcyHelp.com. Instead, everything comes down to your contract.
“Sometimes private loan contracts provide a discharge for a substantial disability, while others may offer no relief at all,” says Yontz. “So it is very important that borrowers review the contract/promissory note and the lender’s policy.”
Walter adds that if you qualify for federal TPD discharge, though, there’s a strong chance that private loan companies will follow suit. “Obviously, the process is going to be a little bit different,” says Walter. “You’ll have to go through the process with the federal loan servicer, and then you’ll have to go through with your private loan servicer.”
Other TPD Discharge Considerations
Some types of loan discharge or forgiveness may be counted as income on your tax returns, and at one time, that included TPD discharge. However, the federal government put a pause on that during the COVID-19 period, and recently, the One Big Beautiful Bill Act made permanent that TPD discharge is excluded from gross income for both federal and private student loans.
Student loan borrowers who were granted TPD discharge used to be subject to income monitoring for a three-year period, during which the lender or Department of Education could check in with you to be sure you still met the criteria for the discharge and request earnings information. However, this requirement ended in 2022. The department noted that 98% of reinstated TPD discharges were simply the result of borrowers not submitting requested information.
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Student Loan Disability Discharge: Here’s What You Need to Know originally appeared on usnews.com
Update 08/18/26: This story was previously published at an earlier date and has been updated with new information.
