If you are a 100% total and permanently disabled veteran (100% T&P) rated by the Veteran’s Administration, or rated as individually unemployable (IU) by the VA for a service-connected condition, you are qualified to apply for forgiveness of any outstanding balances on your FEDERAL student loans, basically wiping the balances clean. You will also be given a refund on any student loan payments you may have made since the date of your rating determination letter. (For instance, if you are retroactively rated as 100% T&P since 2006 and you made any payments since 2006, those payments will be refunded to you)
Please note: This program does not apply to private student loans, loans you co-signed for, nor is it for family members of the disabled veteran.
Here’s what you need to know, and how to apply
The Department of Education’s disability discharge program used to require veterans to adhere to a 3-year ‘conditional discharge’ period before getting approval for this program. They also had to jump through multiple hoops to get physician documentation of their disability. This is no longer required.
In August 2008, the Higher Education Opportunity Act (HEOA) made changes to the Higher Education Act that establish a separate process for determining whether certain veterans are totally and permanently disabled. Veteran borrowers will be considered totally and permanently disabled for purposes of this discharge if the veteran provides documentation from the U.S. Department of Veterans Affairs showing that the veteran has been determined to be unemployable due to a service-connected condition.
You may also click here for the complete and detailed information about the Department of Education’s Veterans Disability Discharge Program. You may also view the Dear Colleague Letter outlining the procedures, which includes all the contact information like email, address and phone numbers to the Department of Educations Veteran’s Disability Discharge Unit.
If you are a veteran, you will be considered totally and permanently disabled for purposes of this discharge if you provide documentation from the U.S. Department of Veterans Affairs showing that you have been determined to be unemployable due to a service-connected condition. If you provide this documentation, you are not required to have a physician complete Section 4 of this form or provide any additional documentation related to your disabling condition. You only need to complete Sections 1 and 3. In addition, certain terms and conditions for this discharge do not apply to you. See the Note to Veterans at the top of page 3.
Translation: If you send a copy of your VA letter of determination (ie, rating letter) stating you are unemployable (IU) or 100% permanently disabled, you do NOT need a physician’s signature and you do NOT need to wait 3 years for your approval. Your federal student loans, regardless of how old they are, will be FORGIVEN IN FULL.
If you are a T&P veteran who has been denied assistance for your student loans, I want to hear from you!
If you are a veteran who received a disability discharge of your student loans, but still has negative information appearing on your credit report from your student loan provider or the Department of Education, I want to hear from you!
If you are a totally disabled veteran who has been denied a VA Home Loan due to negative student loan information appearing on your credit reports, or denied a home loan due to unpaid federal student loan debt, I want to hear from you!
I worked VERY hard to get more transparency in this program. Despite the laws passed in 2008, there was no progress in 2009. By early 2009 you couldn’t find this discharge application because it was buried deep in the depths of the Department of Education website. If you called your lender to tell them about your disability, they would outright LIE to you and tell you the program didn’t exist.
That’s what they did to us. And this is what I did to fix it for EVERYONE:
I went through the GAO offices to raise hell about this, and within a month the entire DOE website was revamped with the information clearly offered on multiple pages. I submitted all the information about revamping the DOE application process via the Regulations.gov website via DOCKET ID ED-2009-OPE-0004 with my authored Document ID: ED-2009-OPE-0004-0016.
That seems to have fixed the problem.
Additionally, the 3-year conditional discharge requirement was waived and a NEW application was created to make it less confusing.
My two-year saga with the DOE will be one of the featured elements of my book about our days at Walter Reed, and how we became central figures in the Walter Reed Scandal.
I uncovered major issues with this program, all the way down to corruption from the government-contracted debt collection agencies. The story also includes a major lender, Sallie Mae, who repeatedly lied and harassed us despite confronting them for breaking the laws put in place to protect my husband. I found that Sallie Mae hadacquired a majority interest in Arrow Financial Services, the very collection agency hired by the DOE to harass him about student loans he legally didn’t have to pay.
I even got an apology from the CEO of ISAC (an Illinois lender), and ~$30K refund for another disabled borrower. This was not just a problem with one lender. It was nationwide.
My book will tell you all about it.
If you are having any difficulties with this program, I want to know. I’ll raise hell again if I have to!
If you found this post helpful or informative, you may also find more helpful topics by visiting my Veteran’s Advocacy page.