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(General) Subject: TPD Discharge Information - Guaranty Agency Assignment Procedures Effective July 1, 2013 (Updated October 30, 2013)

Posted Date:June 12, 2013

Author: Jana Hernandes, Service Director, Operations, Federal Student Aid

Subject: TPD Discharge Information - Guaranty Agency Assignment Procedures Effective July 1, 2013 (Updated October 30, 2013)

Note: On October 30, 2013, we updated this announcement by replacing several attachments. We also added a new attachment titled "Errata Sheet for Guaranty Agency Total and Permanent Disability Discharge Assignment Documents" which provides a list of the attachments that were replaced and a summary of the changes in each of the updated attachments.

In a May 17, 2013 Electronic Announcement posted on the Information for Financial Aid Professionals (IFAP) Web site, we explained how the total and permanent disability (TPD) discharge regulations will change on July 1, 2013.

This is the third in a series of Electronic Announcements that we will publish relating to the changes to the TPD discharge regulations. In this announcement, we provide procedures that Federal Family Education Loan (FFEL) Program guaranty agencies will follow when submitting all TPD discharge assignments to the Nelnet Total and Permanent Disability Servicer under the new regulations. These procedures are effective for individuals who submit TPD discharge applications on or after July 1, 2013.

Components of Total and Permanent Disability Discharge Assignment Procedures

The TPD discharge assignment procedures that guaranty agencies will follow beginning July 1, 2013 are attached in PDF format at the end of this announcement. The six components are as follows:

Procedures – Provides all operational instructions. Due to the new regulations, we have made the following significant changes to the Procedures document:

  • Removed all references and appendices related to the TPD application, including the referral of TPD applications. Applicants will submit TPD applications directly to the Nelnet Total and Permanent Disability Servicer. Guaranty agencies will not include applications in the assignment package.

  • Included information about the loan holder refunding all payments received after notification of a TPD discharge.

  • Included references to the new Loan Holder Notification File. For complete information about the Loan Holder Notification File, refer to our second Electronic Announcement (May 24, 2013) posted to the IFAP Web site.

  • Included updated contact information and address for the assignment process.

  • Re-formatted the document by adding a table of contents and removing appendices that no longer apply.

  • Removed the appendix for Veterans Disability Discharge and the process for referring veteran TPD applications. Note: If the borrower qualifies for discharge based on documentation from the VA, the loans are not assigned to the Department of Education (the Department). We will notify loan holders of the effective date of the VA determination. Upon receiving this notification, the loan holder discharges the borrower’s loans and returns to the sender any payments received on or after the effective date of the VA determination that supported the borrower’s eligibility for discharge.

Appendix I – Assignment File Format: Provides the assignment file format for TPD assignments submitted electronically. Other than some minor edits and corrections, this appendix has not changed in a significant way.

Appendix II – Assignment Form: Provides the TPD assignment form and instructions for assignments that are submitted manually (on paper). Other than some minor edits and corrections, this appendix has not changed in a significant way.

Appendix III – SAIG Record Specifications: Provides record specifications for submitting assignments through the Student Aid Internet Gateway (SAIG). Other than some minor edits and corrections, this appendix has not changed in a significant way.

Appendix IV – Manifest Instructions: Contains instructions for the manifest that must accompany hard copy files, including a revised Sample Manifest. Other than some minor edits and corrections, this appendix has not changed in a significant way.

Appendix V – Co-made Loans and Endorsers: Explains the required handling of joint consolidation loans, co-made PLUS loans, and endorsers who are disabled. Due to the new regulations, this appendix has been updated to remove all references to TPD applications, including the referral of TPD applications. In addition, we have revised text in the remaining sections as appropriate.

Contact Information

We appreciate the community’s patience and assistance as we implement the new total and permanent disability discharge regulations.

If you need assistance with TPD discharge processing, contact the Nelnet Total and Permanent Disability Servicer as outlined on the current Total and Permanent Disability Discharge and Veterans Disability Discharge Contact Information page.

Last Modified: 06/11/2013