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(General) Subject: TPD Discharge Information - Implementation of Total and Permanent Disability Discharge Changes on July 1, 2013

Posted Date:July 3, 2013

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

Subject: TPD Discharge Information - Implementation of Total and Permanent Disability Discharge Changes on July 1, 2013

This is the sixth in a series of Electronic Announcements that we have published relating to the changes to the total and permanent disability (TPD) discharge regulations and process implemented on July 1, 2013. As explained in our previous announcements, the new TPD discharge process applies to all of the Title IV loan programs—William D. Ford Federal Direct Loan (Direct Loan), Federal Family Education Loan (FFEL), and Federal Perkins Loan (Perkins Loan)—and the Teacher Education and Access to College and Higher Education (TEACH) Grant Program. Under the new process, individuals seeking a TPD discharge will submit a single TPD discharge application directly to the U.S. Department of Education (the Department) rather than to their individual loan holders.

For complete information about the TPD discharge changes, refer to the previously posted Electronic Announcements in the "TPD Discharge Information" series. A compilation of the URLs for all of the announcements is available in the fifth Electronic Announcement in the series (June 20, 2013).

Note: For ease in reading, we refer to FFEL Program guaranty agencies, FFEL Program lenders or lender servicers, and Perkins Loan schools collectively as "loan holders." We use "we," "us," and "our" to refer to the Department. The Nelnet Total and Permanent Disability Servicer will continue to assist us in administering the TPD discharge process; we refer to the servicer by its name.

In this announcement, we provide key reminders about directing borrowers to the Nelnet Total and Permanent Disability Servicer and providing Loan Holder Notification (LHN) File contact information to the Nelnet Total and Permanent Disability Servicer.

Directing Borrowers to Nelnet Total and Permanent Disability Servicer

    • As explained in the first Electronic Announcement in the series (May 17, 2013), if a borrower informs a loan holder that he or she is totally and permanently disabled and wants to apply for discharge, the loan holder must now direct the borrower to the Nelnet Total and Permanent Disability Servicer. If the borrower submits a TPD discharge application to the loan holder, the loan holder must forward the application to the Nelnet Total and Permanent Disability Servicer.

      Note: If a borrower who submitted the loan holder-specific TPD discharge application prior to July 1, 2013 contacts other loan holders about discharge on or after July 1, 2013, the borrower must be directed to the Nelnet Total and Permanent Disability Servicer to complete and submit the updated TPD discharge application through the new centralized process.

    • The Total and Permanent Disability (TPD) Discharge Web site at www.disabilitydischarge.com now reflects the new TPD discharge regulations and explains the TPD discharge procedures, eligibility criteria, post-discharge monitoring period, and conditions that may result in the reinstatement of a discharged loan or TEACH Grant service obligation. In addition, borrowers can access the TPD discharge application via the site.
    • As previously explained, there is an updated TPD discharge application. The updated TPD discharge application is now available on the Total and Permanent Disability (TPD) Discharge Web site at www.disabilitydischarge.com. To access the updated TPD discharge application, click on the Forms link located in the Resources area of the site's pages.
    • Despite the availability of the updated TPD discharge application, we know that some borrowers may complete and submit the previous TPD discharge application to their loan holders for a period of time. The Nelnet Total and Permanent Disability Servicer is prepared for this and will accept the previous TPD discharge application through December 31, 2013. Beginning January 1, 2014, however, the Nelnet Total and Permanent Disability Servicer will accept only the updated TPD discharge application. If a borrower submits the previous version of the TPD discharge application on or after January 1, 2014, the Nelnet Total and Permanent Disability Servicer will inform the borrower that he or she must complete and submit the updated TPD discharge application before the borrower's discharge request can be processed.
    • A borrower is allowed to have a representative complete and submit the TPD discharge application on the borrower's behalf, and assist the borrower throughout the discharge process. However, the borrower and his or her representative must complete an Applicant Representative Designation form. The Nelnet Total and Permanent Disability Servicer must receive and process this form before it can work with the representative. In addition, the borrower must submit this form even if he or she has a power of attorney for the representative. To access the new Applicant Representative Designation form, visit the Total and Permanent Disability (TPD) Discharge Web site at www.disabilitydischarge.com and click on the Forms link located in the Resources area of the site's pages.

Providing LHN File Contact Information to Nelnet Total and Permanent Disability Servicer

    • As explained in the second Electronic Announcement in the series (May 24, 2013), the Nelnet Total and Permanent Disability Servicer will use the TPD Loan Holder Notification (LHN) File to communicate information to FFEL Program guaranty agencies, FFEL Program lenders or lender servicers, and Perkins Loan schools about borrowers whose TPD discharge applications are received by us on or after July 1, 2013. Throughout the new TPD discharge process, there will be several points when the Nelnet Total and Permanent Disability Servicer will notify loan holders (as well as our team of federal loan servicers who assist us in the servicing of federally-owned loans and TEACH Grants) of actions the loan holder must take related to a borrower's account.
    • The Nelnet Total and Permanent Disability Servicer will send the TPD LHN File to FFEL Program lenders or lender servicers, FFEL Program guaranty agencies, and Perkins Loan schools in a comma separated values file format (*.csv).
    • FFEL Program guaranty agencies have the option of receiving the TPD LHN File through the Student Aid Information Gateway (SAIG) or via e-mail to a designated contact.

      Guaranty Agency SAIG Option – A guaranty agency that wants to use the SAIG option for receiving the TPD LHN File must inform the Nelnet Total and Permanent Disability Servicer via e-mail of the SAIG mailbox (TG number) to which the guaranty agency wants the notification file sent.

      Guaranty Agency E-mail Option – A guaranty agency that wants to use the e-mail option for receiving the TPD LHN File must designate its contact for receipt of the notification file through a new National Student Loan Data System (NSLDS) contact type.

    • FFEL Program lenders or lender servicers and Perkins Loan schools will receive the TPD LHN File via e-mail to a designated contact. Each entity must designate its contact for receipt of the notification file through the new NSLDS contact type.
    • Action Item Reminder: If a loan holder has not yet notified the Nelnet Total and Permanent Disability Servicer of the SAIG mailbox (TG number) or e-mail address to which Nelnet will send the loan holder's TPD LHN Files, the loan holder must follow the instructions outlined in the May 24th announcement as soon as possible. Action items that FFEL Program guaranty agencies, FFEL Program lenders or lender servicers, and Perkins Loan schools must complete are identified by
      "☑ ACTION ITEM” and explained to loan holders.

Contact Information

We appreciate the financial aid community's participation in our implementation of the new TPD discharge process.

Assistance with TPD discharge processing is available as follows:

Last Modified: 07/02/2013