Throughout 2024, the U.S. Department of Education’s office of Federal Student Aid (FSA) began implementing changes to improve how borrowers manage and repay their federal student loans. These changes are part of a new loan servicing environment, known as the Unified Servicing and Data Solution (or USDS), that will improve the experience and repayment outcomes for approximately 38 million federal student loan borrowers. A summary of these changes was provided in an April 2, 2024 Electronic Announcement.
Total and Permanent Disability (TPD) Discharge Program Transition Coming in 2025
In addition to the overall changes to the loan servicing environment, FSA began implementing changes to how the Public Service Loan Forgiveness (PSLF) Program, the Teacher Education Assistance for College and Higher Education (TEACH) Grant Program, and the Total and Permanent Disability (TPD) Discharge Program are managed. As of the end of 2024, the PSLF and TEACH Grant programs are no longer managed through designated servicers. Instead, FSA has updated our systems and contact centers to streamline and fully manage these programs through StudentAid.gov.
The transition for the TPD Discharge Program will occur in early 2025. Once the transition is complete, borrowers will be able to submit their TPD forms and track their progress to forgiveness on StudentAid.gov.
As the TPD Discharge program is transitioned, there will be impacts to how TPD processing will occur beginning Dec. 20, 2024, and those impacts will continue until the full transition, planned for early March 2025, is complete. In the coming months, FSA will be communicating more information about the transition. This will include information on StudentAid.gov for borrowers and the Knowledge Center for loanholders (i.e., guaranty agencies, lenders, and schools participating in the Federal Perkins Loan Program that are servicing their Perkins Loan portfolio). In the meantime, the information below is a high-level summary of key processing dates and immediate actions that loanholders will need to take.
Key Dates and Processing Impacts Beginning Dec. 20, 2024
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Dec. 20, 2024 – Nelnet TPD will no longer send “APPAPR” in the Loanholder Notification File (LHN); TPD manual assignments no longer accepted.
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ACTION ITEM: Loanholders should HOLD sending all manual TPD assignments to Nelnet TPD until further notice. Nelnet TPD will reject any manual TPD assignments received after Dec. 20, 2024.
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Jan. 17, 2025 – Nelnet stops accepting all electronic TPD assignments.
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ACTION ITEM: Loanholders should HOLD all TPD assignments (both manual and electronic) to Nelnet TPD until further notice. Nelnet TPD will reject any electronic TPD assignments received after Jan. 17, 2025.
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Feb. 9, 2025 – All work-in-process with Nelnet TPD will end and LHN files, and loanholder communications from Nelnet TPD will no longer be sent. For TPD assignments submitted prior to Dec. 20, 2024, loanholders will continue to receive communications, if applicable, from Nelnet TPD until Feb. 9, 2025.
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ACTION ITEM: Loanholders will need to communicate with borrowers who call in regarding TPD that there is a pause on TPD processing. Loanholders may offer a 120-day forbearance to the borrower similar to how they provide a forbearance to borrowers if they received a notification from Nelnet TPD.
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ACTION ITEM: We encourage all loanholders to retain all correspondence received from Nelnet TPD through Feb. 9, 2025. This is particularly important for any TPD assignments rejected after Dec. 20, 2024, as these assignments will need to be resubmitted once processing resumes in March.
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March 2025 – TPD assignment processing resumes; we will provide more information about changes to the TPD assignment process in early 2025.
We appreciate your support and understanding as we work through the transition of TPD Discharge processing.