How To Get a Disability Discharge for Student Loans

Total and permanent disability discharge is a type of student loan forgiveness for borrowers who cannot work due to a physical or mental impairment.

To be granted forgiveness, you must prove that you’re unable to work due to a physical or mental impairment. You may also have to go through a three-year monitoring period after your loan is discharged.

As of July 2024, the White House has forgiven $14.1 billion in student debt for 548,000 borrowers with a total and permanent disability.

You won't owe any federal taxes on your forgiven loans through Dec. 31, 2025. However, you may face state taxes. Check your state's policy on taxing student loan forgiveness.

More information is available on the Education Department's disability discharge website.

» MORE: Biden's student loan forgiveness 'plan B'

Which loans qualify for total and permanent disability discharge?

The following loans can be forgiven under total and permanent disability discharge:

• Federal direct student loans.

• Loans through the Federal Family Education Loan Program (FFELP).

• Perkins loans.

• TEACH Grants that requires a service obligation.

Automatic student loan disability discharges

In 2021, this loan discharge program became automatic for anyone with a disability as recognized by the Social Security Administration or Department of Veterans Affairs.

If you qualify, your student loan servicer will send you a letter about the loan discharge and give you the opportunity to opt out.

One reason you might opt out is if your state considers the amount discharged as taxable income and the cost outweighs the benefit. Find out from your state tax office.

» MORE: How to get student loan help

How to manually apply for a disability discharge

You can manually apply for a disability discharge of your student loans if you don't get an automatic discharge letter. Here are the steps to take:

1. Complete the Education Department's total and permanent disability discharge application.

2. Attach supporting documentation of your eligibility for discharge.

3. Send your application and documentation to Nelnet, the student loan servicer that processes disability discharges. You can also ask Nelnet for a 120-day payment pause while you're gathering your application materials. You automatically won't owe payments while it is processing your application.

Depending on your situation, you must supply supporting documentation from either the U.S. Department of Veterans Affairs, the Social Security Administration or a physician. Here’s what you need from each:

From the U.S. Department of Veterans Affairs (VA)

You must provide VA documentation showing you’ve received a VA disability determination because you:

• Have one or more service-connected disabilities that are 100% disabling, or

• Are totally disabled based on an individual unemployability rating.

The VA process is typically automatic.

From the Social Security Administration (SSA)

You can qualify for the loan discharge if you’re eligible for Social Security Disability Insurance or Supplemental Security Income. You may have to show one of the following documents to prove your disability:

• Your SSA notice of award, or

• Your Benefits Planning Query.

The SSA process is typically automatic.

From your physician

Your physician must sign your application and provide documentation to back up the claim that your impairment meets at least one of the following requirements:

• It is expected to result in death.

• It has lasted continuously for a period of 60 months or greater.

• It is expected to last for a continuous period of 60 months or greater.

How the 3-year monitoring period works

If you qualify for a total and permanent disability discharge through the SSA or a medical professional, you'll face a three-year monitoring period.

During this time, your loan may be reinstated if:

• You take out any new federal student loans.

• You get a notice from the SSA that you no longer have a total or permanent disability.

This monitoring period does not apply if you qualify through the VA.

Can I get a student loan refund for previous payments?

Yes. If you're approved for a loan discharge, Nelnet may refund you for previous payments you've made. The refund depends on how your qualified for the program:

• If you qualified through the VA, Nelnet will refund any payments made on or after the effective date of the VA’s disability determination.

• If you qualified through the SSA, Nelnet will refund any payments made after the date it received the SSA documentation.

• If you qualified through a physician, Nelnet will refund any payments made after the date the physician certified your discharge application.

What if my application gets denied?

If Nelnet denies your application, it will explain why. Payments will immediately be due again.

You have 12 months after the denial to dispute it by providing new information that supports your case.