Posted Date:October 31, 2016
|Author:||Sue O'Flaherty, Service Director, Program Management, Federal Student Aid|
Subject: TPD Discharge Information - Perkins Assignment Procedures due to Total and Permanent Disability Discharge
We are pleased to announce the posting of updated procedures that schools participating in the Federal Perkins Loan (Perkins Loan) Program will follow when submitting Total and Permanent Disability (TPD) discharge assignments to the Nelnet Total and Permanent Disability Servicer. In addition to re-formatting the document for improved flow and clarity, we have removed all outdated references and requirements. The updated procedures replace all previous operational guidance for Perkins TPD assignment processing.
The updated procedures are found on the Campus-Based Processing Information Page on the Information for Financial Aid Professionals (IFAP) website. From the IFAP website’s Home page, click on the Processing Resources box then click on the Campus-Based Processing Information link. Perkins Liquidation and Assignment information is highlighted in an orange box on the right side of the page.
The following are important reminders regarding TPD discharge assignments:
The Loan Holder Notification (LHN) file is the primary form of communication of TPD discharge information between the Nelnet Total and Permanent Disability Servicer and your school. To ensure schools receive LHN files timely, schools must keep both loan holder information and contact information on the NSLDS Professional Access website current.
Schools must ensure loans are assigned to the TPD Servicer after they receive the LHN file with the reason code “APPAPPR.” Schools should not assign loans prior to this approval reason code as the borrower has not yet been approved for TPD Discharge.
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 the school of the effective date of the VA determination. Upon receiving this notification, the school 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.
If a school is liquidating its Federal Perkins Loan Program portfolio and has TPD loan assignments that have not yet received approval from the TPD Servicer, the school should instead refer the loans through the “regular” liquidation and assignment process and submit them to the Department’s Perkins Loan Servicer, ECSI. In these cases, the reason for the assignment should be marked as “Liquidation.” Schools should refer to the Assignment and Liquidation Guide posted on the Campus-Based Processing Information page on the IFAP website.
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.