The men and women of the United States military have made indelible sacrifices. Those with sustained injuries have paid a high price already. Recently, the idea of canceling their student loan debt has gained significant support across the country.
The first item to clarify is the definition of a “veteran” pertaining to student loan forgiveness. You may assume an applicant must be a wounded soldier who served his or her country during a time of war.
However, anyone who has served in any military branch and received an honorable discharge qualifies as a veteran, and it does not matter whether you served 20 years or two; you are entitled to student loan debt forgiveness.
This article will cover several avenues that veterans can take to seek student loan forgiveness and the steps needed for each.
Total and Permanent Disability Discharge
A total and permanent disability discharge, also known as a TPD discharge, remains the primary form of financial aid available to disabled veterans.
This type of student loan forgiveness extends to all William D. Ford Federal Direct Loan Program Loans, Federal Family Education Loan (FFEL) Program Loans, Federal Perkins Loans, and Teacher Education Assistance for College and Higher Education (TEACH) Grant Program service obligations.
The TPD program is overseen directly by the U.S. Department of Education and used to require a significant amount of documentation for a veteran to prove eligibility. As of August 2019, though, student loan debt forgiveness for veterans is now automatic by an executive memorandum signed by President Trump.
This change means that much of the confusion and lag times associated with disabled veteran student loan forgiveness have been taken out of the application process. Many veterans will be alerted by letter, even without applying, that they are immediately eligible for this relief.
A “total and permanent” disability is one that meets the following criteria:
- You acquired the disability while on active duty for any branch of the U.S. military.
- The disability prevents you from engaging in any productive work.
- The disability has lasted (or is expected to last) for a minimum of five years.
If you are not contacted by the Department of Education or Veterans Affairs, you can fill out a TPD application online or request a print copy by phone or email. The TPD application process is run by a company called Nelnet, and this company ensures that any federal student loan payments will stop for 120 days as you gather your required documentation and submit your application.
Nelnet can be contacted in the following ways:
- Email: email@example.com
- Telephone: 1-888-303-7818, Monday–Friday from 7 a.m. to 2 a.m. Eastern Standard Time (EST), Saturday from 8 a.m. to 7 p.m.
If you are, for any reason, unable to complete your application without assistance, Nelnet offers several options. Your designated representative can apply on your behalf by accessing and completing the Applicant Representative Designation Application. This form is necessary even if your designated representative already has a power of attorney to act on your behalf. Nelnet must fully process it before they can begin to work with your representative.
Proving Total and Permanent Disability
Even though the recent executive order automating TPD discharges has been signed and implemented, some veterans may still have fallen through the cracks of the automation process and might be required to show their disability to receive relief.
If you have a total and permanent disability and have not been directly contacted by the Department of Education or your loan servicer, you will need to send some documentation of your ailment at the time of your application.
You can show disability in several ways:
- Provide documentation from the VA that states you had a service-related disability, which was 100% prohibitive of employment. This document must also contain the effective date of the VA’s disability determination.
- Provide a doctor’s certification from a licensed M.D. or D.O. (doctor of osteopathy) indicating your permanent disability and your inability to work because of it. This document must include a specific indication of a physical or mental impairment that you have already endured or can be expected to endure for a continuous period of at least 60 months or can be expected to result in death.
One final way that you may qualify for a TPD discharge is through any Social Security Administration (SSA) correspondence that the Department of Education regularly receives regarding Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) that you are receiving. If your next scheduled disability review occurs within five to seven years from the date of your most recent SSA disability determination, the Department of Education will contact you with specific details on how to apply for a TPD discharge.
You will not be required to submit documentation of your SSA disability determination. If, for any reason, you are receiving SSDI or SSI benefits, and your next scheduled disability review falls within that five-to-seven-year range, and you have not been contacted about a TPD discharge yet, you can apply using the standard application form.
You will need to add documentation of your SSA notice of award for SSDI or SSI benefits, or you can use a Benefits Planning Query (BPQY Form 2459), indicating that your next scheduled review falls within the designated time frame.
Public Service Loan Forgiveness Program
Disabled veterans who may have less serious traumas and would like to take another approach to student loan forgiveness can seek debt relief through the Public Service Loan Forgiveness (PSLF) program.
This initiative is aimed at those who wish to work in government-related fields. This type of student loan forgiveness can alleviate any debts sustained under the William D. Ford Federal Direct Loan Program.
PSLF does not apply to Federal Perkins loans or FFEL loans. However, these types of loans can become eligible for PSLF if you are successful in consolidating them in a Direct Consolidation Loan. Private student loans are not eligible for PSLF.
Eligibility for disabled veteran student loan forgiveness under PSLF requires that a minimum of 120 months (10 years) of payments have been made on time before the cancellation application.
Qualifications for PSLF include:
- You must be employed full time by a U.S. federal, state, local, or tribal government or an affiliated nonprofit organization.
- You must have student debt incurred under the Direct Loan Program or have recently consolidated other types of federal student loans into a Direct Loan.
- You must make 120 months’ worth of qualifying payments on this Direct Loan under an income-driven repayment plan.
Other Financial Aid Helping Disabled Veterans
More options exist to assist disabled veterans today than ever before. If loan forgiveness through the aforementioned programs is not a possibility for you, do not fret.
There are several additional programs that you may qualify for. Here are a few options:
- Prior Service Veterans: You may not realize that the National Guard and reservists qualify for student loan forgiveness. Many military branches only extend student loan forgiveness to first-time soldiers, but the National Guard provides incentive-based aid to current and prior members.
- National Defense Student Loan Discharge (NDSLD): Veterans who have Stafford Loans or Perkins Loans and served in areas with “direct fire and/or imminent danger” for at least one year qualify with just a letter of explanation and a correctly completed Department of Defense discharge form.
Even specialized scholarships for military spouses exist for those families that may have faced a shift in income due to a service-related injury and need to send a loved one back to school.
Standing by Our Nation’s Best
With so many economic and global challenges facing everyone today, disabled veterans burdened by college debt need more support than ever.
CollegeFinance.com is committed to supporting veterans through all aspects of their higher education journeys. With detailed resources that help you make informed decisions about your college funding, CollegeFinance.com is here to help guide our nation’s best toward a more comfortable financial future.