The Education Department is launching an updated student loan forgiveness application for borrowers with disabling medical conditions.
The new application incorporates significant recent regulatory changes to the longstanding disability discharge program, which went into effect over the summer. These updates are designed to expand access to student debt relief and make it easier for disabled borrowers to apply for, receive, and retain student loan forgiveness.
Here’s the latest.
Student Loan Forgiveness Via TPD Discharge Improved Under New Rules
Last July, the Biden administration enacted new regulations for Total and Permanent Disability discharges, a loan forgiveness program that has been around for years. The new rules codify several temporary TPD flexibilities the administration had implemented during the Covid-19 pandemic, and they broaden access to loan forgiveness under the TPD program.
One of the most important changes is an expansion of avenues to receiving student loan forgiveness for borrowers receiving Social Security disability benefits. Previously, the TPD eligibility criteria restricted loan forgiveness to those whose Social Security benefits were on a five or seven year disability review cycle, regardless of how long they had actually been disabled. The new regulations provide more flexibility, such as for borrowers who have a disability onset date five years prior to applying for TPD relief, or those who qualify for Social Security disability benefits based on a compassionate allowance.
The rule changes also expand the categories of medical providers who can certify that a borrower is disabled on a Medical Provider’s Certification (formerly called the Physician’s Certification). Rather than limiting the process to doctors only, the updated rules allow physician’s assistants, nurse practitioners, and independent psychologists to certify a borrower’s eligibility for relief under the TPD program.
In addition, the new regulations formally end the longstanding practice of post-discharge income monitoring after student loan forgiveness has been approved. This cumbersome administrative requirement often resulted in borrowers who had received student loan forgiveness under the TPD program having their loans reinstated due to earning a minimal amount of employment income or failing to submit a timely monitoring form. For most borrowers going forward, the only way to reverse student loan forgiveness during the post-discharge monitoring period would be to take out a new federal student loan.
New TPD Form Makes Applying For Student Loan Forgiveness Easier
The updated TPD Discharge application incorporates the recent regulatory changes, and is designed to make it easier for borrowers to apply for student loan forgiveness. And further revisions are in the works.
“A final rule published on November 1, 2022 (87 FR 65904) made changes to the TPD discharge regulations, including an expansion of the types of Social Security Administration (SSA) disability determinations that qualify a borrower or TEACH Grant recipient for TPD discharge; elimination of the requirement for borrowers who receive TPD discharges based on SSA determinations or a physician’s certification to provide documentation of their annual earnings from employment during the 3-year post-discharge monitoring period; and expansion of the categories of medical professionals who may certify an individual’s TPD discharge application which necessitate the updating of this information collection,” said the Education Department in a formal Federal Registry summary last week. “We have also revised the form based on public comment and internal review for ease of use and clarity. We have moved definitions to the front to allow users to know if their loans can be included on this form. We have moved forward where the completed form is to be sent and how to get assistance in completing the form.”
The most recent version of the form already outlines the five criteria that can qualify Social Security disability benefits recipients for TPD relief. It also includes the five categories of medical providers on the Medical Professional Certification portion of the application who can certify that a borrower qualifies for student loan forgiveness under the rule changes. The additional updates will include the changes summarized in the department’s Federal Registry announcement.
Billions in Student Loan Forgiveness Already Approved
The Biden administration has already approved $10 billion in student loan forgiveness under the TPD program during the last two years. This includes borrowers who were approved for discharge, or had their previously-reinstated loans re-discharged, under the pandemic-era flexibilities. This figure also includes borrowers who have been approved under the new regulations, as well as those who have benefited from a data-sharing initiative between the Social Security administration and the Education Department to identify disabled student loan borrowers.
The administration is also developing a new student loan forgiveness program under the Higher Education Act. This program may target several categories of borrowers for relief, including those facing hardships due to medical issues. The Education Department has been conducting multiple rounds of negotiated rulemaking to determine the eligibility criteria for the new loan forgiveness plan. The next rulemaking session is scheduled for next week, and final regulations are expected to be published in 2024.
Further Student Loan Forgiveness Reading
5 Student Loan Forgiveness Mistakes To Avoid, According To An Attorney
Didn’t Get A Student Loan Forgiveness Email? 7 Possible Reasons Why
More Jobs Eligible For Student Loan Forgiveness Under Expanded Rules
These Student Loan Forgiveness Updates Will Impact 9 Million Borrowers Or More