Miscellaneous – Department of Education Releases Additional Information on Federal Student Loan Discharge

Last month, the Department of Education announced a new process to identify and notify federal student loan borrowers with disabilities who may be eligible for a Total and Permanent Disability (TPD) loan discharge. The Department has worked with the Social Security Administration (SSA) to identify a subset of federal student loan borrowers who receive Social Security disability benefits and meet the eligibility criteria for a TPD loan discharge. Approximately 387,000 current borrowers have been identified. Beginning in April, the Department began sending out customized letters to these 387,000 borrowers explaining the steps they can take to apply for a TPD loan discharge. Last week, the Department released additional Questions & Answers including information related to the impact of a TPD loan discharge on Supplemental Security Income and Social Security disability benefits, Medicaid eligibility, and eligibility for premium tax credits and cost assistance under the Affordable Care Act. Borrowers considering a TPD loan discharge, as well as information and referral specialists, may wish to consult this new background information.

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