Of the millions of veterans who’ve served our country, many are disabled as a result of their service. In fact, according to the Bureau of Labor Statistics, 20% of veterans have a service-connected disability. On top of other challenges, keeping up with student loan payments while disabled can be impossible.
The Trump administration announced Monday a new initiative to help disabled veterans with their student loans. It aims to streamline the loan forgiveness process and proactively reach out to veterans about their options.
The Trump administration’s plan for student loan forgiveness for disabled veterans
The Department of Education and the Department of Veterans Affairs (VA) have partnered to make federal student loan discharge more accessible for veterans.
“Our nation’s veterans have sacrificed much for our country. It is important that, in return, we do all we can to give them the support and care they deserve,” Secretary of Education Betsy DeVos said in a press release from the Department of Education. “Simplifying the loan forgiveness process and proactively identifying veterans with federal student loans who may be eligible for a discharge is a small but critical way we can show our gratitude for veterans’ service.”
Under this new initiative, the Department of Education will use the National Student Loan Data System and VA database to identify veterans with federal student loans. It will then send those veterans a customized letter explaining total and permanent disability (TPD) discharge and its eligibility criteria as well as an application for discharge.
By proactively reaching out to veterans, the Department of Education and VA hope to raise awareness about TPD discharge and help more disabled veterans qualify for loan forgiveness.
What is TPD discharge?
Under TPD discharge, the government will forgive the remaining balance on your federal student loans.
To qualify for TPD discharge, you must be able to prove you are totally and permanently disabled. There are three ways you can do so:
- If you’re a veteran, you can submit documentation from the VA showing you’re unemployable because of a service-related injury.
- If you receive Social Security Disability Insurance or Supplemental Security Income, you can submit a notice of your benefits to the government.
- Your physician can submit a certification that you’re totally and permanently disabled. They must certify that you’re unable to work because of a physical or mental impairment.
Keep in mind that TPD discharge has tax implications. When the government forgives your loans, the balance is considered taxable income. So, if the government discharges a large amount of your student loan debt, you could face a hefty tax bill.
How to apply for TPD discharge
Besides receiving an application under the new initiative, there are a few other ways you can obtain an application for TPD discharge:
- You can download and print a blank application.
- You can request an application by phone at 888-303-7818 or by email at firstname.lastname@example.org.
- You can start an application online.
Once you’ve filled out the application, you must either attach supporting documentation that proves you’re permanently and totally disabled or have your physician fill out Section 4, depending on your situation.
Then, you’ll mail your application and any supporting documentation to the following address:
U.S. Department of Education
P.O. Box 87130
Lincoln, NE 68501-7130
What to do if you have private student loans
It’s important to know that only federal student loans are eligible for TPD discharge. If you took out private student loans, they won’t qualify.
However, some private loan lenders do offer loan forgiveness if you have a disability. For example, Sallie Mae, Discover, and Wells Fargo will waive your loan balance if you’re totally and permanently disabled. To find out if your lender offers loan discharge, contact your loan servicer directly.
Managing your loans
The Trump administration’s new initiative might help more disabled veterans learn about TPD discharge and provide them with much-needed student loan relief.
However, if you think you could qualify for TPD discharge, you don’t have to wait for the VA or Department of Education to reach out to you. You can complete the application and start the process on your own, which might help you get student loan forgiveness sooner.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.24% – 7.24%3||Undergrad & Graduate|
|2.47% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|