Many veterans are aware of disability compensation available through the Department of Veterans Affairs (VA), but far fewer know that a qualifying VA disability rating may also make them eligible to have their federal student loans completely discharged. Through the federal Total and Permanent Disability (TPD) Discharge Program, many disabled veterans can eliminate eligible federal student loan debt, providing significant financial relief and one less financial burden to carry.
The TPD program is designed to assist borrowers who are unable to engage in substantial gainful employment because of a qualifying disability. In many cases, a veteran who has been awarded a 100% service-connected disability rating or found entitled to Total Disability based on Individual Unemployability (TDIU) by the VA may qualify to have eligible federal student loans discharged. The program generally covers federal Direct Loans, Federal Family Education Loans (FFEL), Federal Perkins Loans, and TEACH Grant service obligations. It is important to understand, however, that private student loans are generally not eligible for discharge under the federal TPD program.
Veterans who do not have a 100% disability rating or TDIU should not automatically assume they are ineligible. The Department of Education also permits borrowers to qualify based on certain Social Security Administration disability determinations or certification from a licensed medical professional establishing that the borrower has a severe physical or mental impairment expected to last at least five years, has already lasted at least five years, or is expected to result in death.
For many veterans, this benefit comes as a surprise. Countless former service members continue making monthly student loan payments despite already having a VA disability determination that could qualify them for loan forgiveness. Depending on the amount borrowed, a TPD discharge can eliminate thousands, or even tens of thousands, of dollars in federal student loan debt, easing financial stress and allowing veterans to focus on their health and families rather than monthly loan payments.
At Binder & Watson, we are committed to helping veterans understand not only their VA disability benefits but also other federal programs that may improve their financial well-being. Although our practice focuses on VA disability claims and appeals, we believe every veteran should be aware of benefits that may be available based on their service-connected disabilities. If you have been awarded a 100% disability rating or TDIU, or if you have questions about your VA disability benefits generally, we encourage you to contact our office at (813) 537-6060. We are always happy to discuss your options and help point you in the right direction.