Final Regulations on Total and Permanent Disability Loan Discharges

Publication Date
August 23, 2021
Subject
Final Regulations on Total and Permanent Disability Loan Discharges
FR Type
Final
Effective date
July 1, 2022

The Department is issuing Final Regulations that expand the automatic discharge process to borrowers who are eligible for a Total and Permanent Disability (TPD) loan discharge through Social Security Administration (SSA) data. Borrowers are eligible if they qualify for Social Security Disability Insurance (SSDI) and/or Supplemental Security Income (SSI) benefits and whose next scheduled disability review is no earlier than five nor later than seven years. The Rule also describes the process by which the Secretary will automatically discharge the Federal student loans of a borrower who is determined to be eligible for a TPD discharge based on data obtained from either the Department of Veterans Affairs (VA) or SSA, unless the borrower notifies the Secretary by a specified date that the borrower does not wish to receive the discharge. Further, it provides for the return of payments to the person who made payments on the loan on or after the effective date of the determination by VA or SSA for borrowers who receive the automatic TPD discharge.

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