Veterans who are totally and permanently disabled due to a service-connected disability or veterans who receive VA disability benefits at the 100 percent-level are eligible for the Total and Permanent Disability Discharge (TPD). This program eliminates student loan debt.
Approximately 42,000 disabled veterans meet the eligibility requirements, but only 18 percent of them have applied for the program, according to the Department of Education. When 25,000 disabled veterans have already defaulted on their loans, the program becomes even more vital.
During Spring 2018, the Department of Education and the Department of Veterans Affairs began a data-sharing initiative. This initiative cross-checks the VA’s records for total and permanent service-connected disabilities against the Department of Education’s database of student loan borrowers. When they find a match, a simplified TPD application is mailed to the veteran.
Mike Saunders, the director of military and consumer policy at the non-profit organization, Veterans Education Success, commented: “These people can’t work. They’re 100 percent disabled. Of course they’re going to have problems paying back student loans. It’s up to the administration to take proactive action to go out and help these people. To that end, we believe that automatic forgiveness should be something that the administration should be considering.”
As it stands now, veterans who are flagged by the data-sharing as eligible for loan forgiveness under TPD are contacted directly by Nelnet, the federal government’s loan servicer. The company explains the program, sends an application to the veteran, and gives the veteran 120 days to respond.
While the application is being processed, the veteran does not need to make loan payments. If the veteran has not responded by 120 days, Nelnet sends him or her a reminder. If the veteran still does not respond, the government can begin collecting on the debt.