​Student Loan Relief Available for Some Borrowers with - Reeve Foundation

By guest author Stephanie Woodward

On March 29, 2021, the U.S. Department of Education announced changes that will result in student loan relief for some borrowers who have applied for Total and Permanent Disability Discharge (TPD).

What is Total and Permanent Disability Discharge and How Do You Qualify?

Under TPD, federal student loan borrowers who are totally and permanently disabled and are unable to engage in substantial gainful activity can apply to have their student loans completely discharged. If this discharge request is not due to a military service-related injury, then the person must (1) submit appropriate paperwork demonstrating they are totally and permanently disabled and that, because of this disability, they are unable to engage in substantial gainful activity, and (2) submit paperwork during the three year “monitoring period” about their earnings to show that they have not engaged in substantial gainful activity.

What is Substantial Gainful Activity?

The U.S. Department of Education defines substantial gainful activity as “a level of work performed for pay or profit that involves doing significant physical or mental activities, or a combination of both.” According to the Social Security Administration, a non-blind disabled person who earns more than $1,310 per month is engaged in substantial gainful activity.

What was the Problem?

First, people with disabilities are required to opt into TPD – it is not automatic for people with disabilities, even if the person receives payments from the Social Security Administration. This means that there are approximately 400,000 people are technically eligible for TPD, but many people have not opted into it because the process is confusing and the paperwork is onerous.

Second, even if a person opted into TPD, if that person fails to provide their earnings information during the three-year monitoring program consistently, their loans would be reinstated. They would be required to resume their student loan payments. A report from the Government Accountability Office in 2016 found that 98% of reinstated TPD discharges occurred because the person did not submit the required documentation, not because their earnings were too high.

What Did the Department of Education Change?

The Department of Education has waived the requirement to provide earnings information during COVID-19 for people who have applied for TPD. This means that borrowers will not be at risk of having their loans reinstated because they did not provide earnings information during the COVID-19 emergency. This means that about 41,000 people - who previously had their loans reinstated –will get their discharges back and have any funds returned to them that they paid since March 2020. Additionally, approximately 190,000 other people in the program will not be asked to submit earnings information throughout the COVID-19 emergency.

The Department of Education is also considering additional changes to how it will monitor TPD earnings in the future.

What Does This Mean for You?

If you are a person with a disability who has federal student loans and you are unable to engage in substantial gainful activity, TPD may be a good option for you, and, for now, the process is easier because you will not be required to submit earnings information until the COVID-19 emergency has ended.

To learn more about the TPD process, go to https://studentaid.gov/manage-loans/forgiveness-cancellation/disability-discharge

Stephanie Woodward is an attorney and founder of Disability EmpowHer Network. Stephanie is passionate about seeking justice for marginalized communities - and has an arrest record to show for it. As a proud disabled woman and civil rights activist, Stephanie is committed to bringing more women and girls with disabilities to the forefront through mentoring and activism.