Total Permanent Disability and Workers’ Compensation
Total permanent disability (TPD)—also known as permanent total disability (PTD)—is a classification of a work-related injury under state workers’ compensation laws that may provide an injured worker with lifetime benefits.
Total Permanent Disability May Qualify the Disabled Person for Discharge of Federal Student Loans and Grant Service Obligations
If you’re totally and permanently disabled, you may qualify for a discharge of your federal student loans and Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation.
Based on a person’s total and permanent disability, a TPD discharge relieves them from having to:
• Repay a William D. Ford Federal Direct Loan (Direct Loan) Program loan
• Repay a Federal Family Education Loan (FFEL) Program loan
• Repay a Federal Perkins Loan (Perkins Loan) Program loan
• Complete a TEACH Grant service obligation.
Before the federal student loans or TEACH Grant service obligation can be discharged, a person with a disability must provide information to the Department of Education to show that they’re totally and permanently disabled.
A person can show that they’re totally and permanently disabled in one of the following three ways:
• Veterans can submit documentation from the U.S. Department of Veterans Affairs (VA) showing that the VA has determined that they are unemployable due to a service-connected disability.
• People receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits can submit a Social Security Administration (SSA) notice of award for SSDI or SSI benefits stating that their next scheduled disability review will be within five to seven years from the date of their most recent SSA disability determination.
• People with disabilities can submit certification from a physician that they are totally and permanently disabled. The physician must certify that they are unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment that:
o Can be expected to result in death
o Has lasted for a continuous period of not less than 60 months
o Can be expected to last for a continuous period of not less than 60 months.
People with disabilities must continue to pay their student loans while awaiting approval of their application. If you have income of $600 or more reported to the Internal Revenue Service (IRS), you may have an income tax liability. The Department of Education reports the amount of the loan forgiven to the IRS. The IRS sees this unpaid debt as income.
To apply, contact the Department of Education at 1-888-303-7818 from 8:00 a.m. to 8:00 p.m. ET or send an email to DisabilityInformation@Nelnet.net.
In Texas, Total Permanent Disability (TPD) under workers' compensation laws provides lifetime benefits to workers who have suffered an injury that permanently prevents them from working. TPD may also allow for the discharge of federal student loans and TEACH Grant service obligations. To qualify for a discharge due to TPD, individuals must provide proof of their disability to the U.S. Department of Education. This can be done through documentation from the VA for veterans, an SSA notice of award for SSDI or SSI recipients, or a physician's certification of disability. While the application for discharge is processed, individuals must continue to pay their student loans. If the loan is forgiven, the amount may be reported to the IRS as income, potentially creating a tax liability. To apply for a TPD discharge, individuals can contact the Department of Education or send an email to the provided address.
