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:
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 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.
If you receive a Form 1099-C, you should keep the form for your records, but you do not need to include it when filing your federal tax return.
For additional information, visit irs.gov.
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.