July 2, 2019
Our Veterans who have a service-connected disability can apply for a total Federal Student Loan Forgiveness (TPD) based on their Disability Rating from the Veterans Administration. The disability rating from the VA has to be 100% service connected if the VA certification is used. The Application process is straight forward and the VA can issue a document indicating the VA Disability rating upon request.
What some military Veterans do not know is that loan forgiveness of their Federal Student Loans can still be obtained even if their VA disability rating is less than 100%. It is a slightly different process.
Here is how it works. Any Medical Doctor can certify that a Veteran is unable to work based on their medical condition and that the medical condition will prevail for the next 5 years or can be expected to result in death, and it will prevent them from obtaining substantial gainful employment. For an example, any Veteran who suffers from Post Traumatic Stress Disorder which has cause a VA Disability rating of 80%, can still obtain a Total and Permanent Disability Discharge of their Federal Student Loans. (TPD)
The Department of Veteran’s Affairs and the U.S. Department of Education are now working together to enable our Veterans more access to TPD process by cross referencing the data bases, much like they have done with the Social Security Disability system.
Attorney D.J. Rausa is a Veteran who served in the United States Navy. He has assisted dozens of military Veterans obtain their TPD. Sometimes the application is denied with no explanation and the Veteran is in need of the assistance of a Student Loan Lawyer. The Veteran has the right to have someone act on their behalf.
Military Loan Forgiveness Application Forms
Veterans with a service-connected disability may apply for student loan forgiveness at the link below. Forms are available in English and Spanish.
OMB No. 1845-0065 forms are available here.
Student Loan Forgiveness Veteran Disability Discharge Forms
An application has to be filled out and sent to the U.S. Department of Education, TPD Servicing, and Nelnet.
There is also a Third-Party Designation Form to be completed.
You may also apply by phone or ask questions by calling 888-303-7818.
Tax Consequences Under New Tax Law
As a result of a change in tax law, loan balances that are discharged due to TPD are not considered income for federal tax purposes if you receive the discharge during the period from January 1, 2018 through December 31, 2025.
If you are a Veteran or know of a Veteran who needs to exercise their right to take advantage of this benefit, then please share this information with them.
We here at Marshall & Associates are always available to assist our Veteran Community.
Additional details may be found in this Forbes Article on military veteran education loan forgiveness.