On July 11, 2016 NPR had a discussion about student loans with journalists Eric Westervelt and Center for Investigative Reporting’s Lance Williams. Williams discusses how Sallie Mae plays a role in the current loan situation. He states, “Sallie Mae was a government-affiliated corporation whose board was made up in part of public officials. When it first came into existence, it was supposed to help create a market for the student debt that the feds were issuing. But after privatization, it became a full-service, for-profit corporation that really “verticalized” its involvement in the student debt industry, everything from issuing private college loans to running collection bureaus. The concern now is we replaced a program whose real purpose was to help people go to college with something where that’s kind of a secondary goal.“
If you find that you are impacted by the Sallie Mae fall out and have suffered a disability, you may find it interesting to note that several loans have a disability discharge participation program affiliation. This discharge is called a TPD or a Total and Permanent Disability. When you take out a loan, the last thing you expect to happen is that you will succumb to a disability. However, it is good to know your options if such a tragic event were to occur. You also need to know the newest changes with the TPD program, so you can align your compliance.
Loans Eligible in the TPD Program
If you have suffered a mental or physical disability, you will need to be aware of your options and whether your specific loan is a member of the participating groups. At this time, you have battles to face and need to turn to the experts to know what your options might be. The loans that participate in this discharge program include:
- William D. Ford Federal Direct Loan
- Federal Perkins Loan Program
- Teacher Education Assistance for College and Higher Education
- Federal Family Education Loan
Once you have assessed the situation, and discovered that your loan is in the program, you will have to meet a qualification process to participate in the plan.
Proof of Disability Process and Needs
There are three ways for you to provide the proof that you meet the criteria to be classified as a student with a mental or a physical disability. No one in the system wants you to be burdened with a debt if it is determined that you have suffered a mental or physical disability and will not be able to attend school or to pay the loan. The necessary steps are-
- Provide a certification document from a doctor that states you are permanently and totally classified as having a mental or physical disability. This certification covers that you are not able to participate in any activity because of the mental disability or the physical impairment. This impairment must-
- Have all ready lasted for a period of not less than sixty months, or
- Be expected to continue for a period of not less than 60 months
- May result in your death
- If you are a veteran of the United State’s military, you can provide proper documents from the United States Department of Veterans Affairs showing that the Veteran’s Affairs determined you to be unemployable due to the physical or mental disability or impairment. You will want to talk to the Veteran’s Affairs office at 1-800-827-1000 to update them.
- If you are getting Supplemental Income Benefits or Social Security Disability Insurance, you can provide your Social Security Administration notice of award for those benefits to begin the TPD program. It must state that you next award will be within five to seven years from the date of your disability classification and determination. You can contact the Social Security Affairs Office at 1-800-772-1213.
Changes to be Aware Of and Application Steps
As of July 2013, there were changes to the TDP criteria and the process. This article has the correct formats and procedures for the determination and application processes. If you meet the criteria stated here, you will next want to apply for the discharge. You can call the servicer and inform them of your desire to apply at 1-888-803-7818 during the hours of 8 am to 8 pm, EST.
If you have several loans, you will only need to complete the application one time, not a submission for each loan. When contacting the TDP service, called Nelnet, you will do the following things and be given the following information:
- Nelnet will personally contact your loan lenders and ask them to suspend any collections on the loans for the next 120 days. You are free of payment obligation during those 120 days.
- Nelnet will check its record and let you know if your loans indeed meet the criteria.
- Nelnet will provide to you all necessary application information for the discharge process.
Williams finishes his NPR interview on Sallie Mae by saying, “There’s been tremendous disinvestment in public higher education in our country. It peaked in the 1970s. Our reporting showed that if state legislatures had continued to support higher ed at the rate they were in 1980, they would have pumped an additional $500 billion, billion with a B, into state university systems. Interestingly, that’s just about how much outstanding debt is now held by people who attended public colleges and universities. You see the symmetry. As the states disinvest, the burden is picked up by the students, and the way they pay for it is they borrow the money.”
If you have suffered a mental of physical disability and are a victim of what Williams calls disinvestment through Sallie Mae, you can note that because of the TDP modifications in July of 2013, you do have options.