Note Guidelines for Total and Permanent Disability Post-Discharge Refund Reporting

Under a process effective July 1, 2013, the U.S. Department of Education evaluates total and permanent disability applications to determine whether borrowers satisfy the requirements for loan discharge.

Guarantors pay lender claims after the Department determines that loans qualify for discharge. Then lenders must refund to those seeking the discharge certain payments received during the TPD application process. Refund payments according to these effective dates for the discharge:

  • After the total and permanent disability date provided in the Department’s official approval notification for the “standard” disability discharge.
  • On or after the total and permanent disability date provided in the Department’s official approval notification for the “veteran” disability discharge.

“Standard” total and permanent disability includes both U.S. Social Security Administration total and permanent disability determinations and physician certification determinations. Lenders must report to the Department any payment refunds issued following claim payment resulting from a standard TPD discharge.

The Department’s TPD servicer has not specified a timing or format requirement for this reporting. Lenders may establish their own policies and procedures for the timing and method of reporting. Send payment information to the servicer by postal mail to: 

U.S. Department of Education
121 South 13th Street, Suite 201
Lincoln, NE  68508

Or send email to disabilityinformation@nelnet.net.

Guarantor reporting

As a reminder, loan holders must notify guarantors of loans for which the Department receives total and permanent disability discharge applications. See these instructions for reporting TPD applications to USA Funds® or NELA®.

For more information

USA Funds offers a summary of the Nov. 1, 2012, Final Rule that establishes the new process for TPD discharge applications.

USA Funds Ask PolicySM also can provide information about the new federal requirements for TPD discharge applications. Use an online form to submit questions about the new process or any other federal financial aid policy.

The National Council of Higher Education Resources offers a Total & Permanent Disability Best Practices document with additional information.