Total and Permanent Disability (TPD) Loan Discharge
If you are unable to work because of a total and permanent disability, or are a veteran who is unable to work
due to a service-related disability, you may qualify to have your federal student loans discharged. To learn
more about TPD Discharge, eligibility requirements, how to apply or check the status of your application,
please contact the Nelnet Total and Permanent Disability Servicer.
Tax Implications if Your Loans are Discharged
Beginning January 1, 2018, discharges due to Total and Permanent Disability are not considered income by the Internal Revenue
Service. Therefore, you will not have to pay federal income tax on your discharged loans. If you qualify for a TPD discharge based
on documentation from the VA, the date you are considered to have received the discharge for tax purposes is the date that we approve
the discharge. If you qualify for a TPD discharge based on documentation from the Social Security Administration or a physician’s
certification, the date you are considered to have received the discharge for tax purposes is the completion date of your three-year
post-discharge monitoring period.
The discharged loan amount may be considered income for state tax purposes. You may want to consult with your state tax office or a tax
professional before you file your state tax return.