Posted Date: June 20, 2013

Author:  Jana Hernandes, Service Director, Operations, Federal Student Aid

Subject: TPD Discharge Information - Reminder of July 1, 2013 Effective Date for Changes to Total and Permanent Disability Discharge Regulations

This is the fifth in a series of Electronic Announcements that we have published relating to the changes to the total and permanent disability (TPD) discharge regulations that are effective July 1, 2013. As explained in our previous announcements, there will be a new TPD discharge process beginning July 1, 2013, for those who apply on or after that date. The new TPD discharge process will apply to all of the Title IV loan programs—William D. Ford Federal Direct Loan (Direct Loan), Federal Family Education Loan (FFEL), and Federal Perkins Loan (Perkins Loan)—and the Teacher Education and Access to College and Higher Education (TEACH) Grant Program. Under the new process, individuals seeking a TPD discharge will submit a single TPD discharge application directly to the U.S. Department of Education (the Department) rather than to their individual loan holders.

Note: For ease in reading, we use “borrower” to refer to the disabled individual who applies for discharge. We refer to FFEL Program guaranty agencies, FFEL Program lenders or lender servicers, and Perkins Loan schools collectively as “loan holders.” We use “we,” “us,” and “our” to refer to the Department. The Nelnet Total and Permanent Disability Servicer will continue to assist us in administering the TPD discharge process; we refer to the servicer by its name.

In this announcement, we remind the financial aid community of our previously posted guidance and highlight information that is critical to the July 1, 2013 start.

We present the information in this announcement as follows:

  • Previously Posted Guidance

  • Directing Borrowers to Nelnet Total and Permanent Disability Servicer Beginning
    July 1, 2013

  • TPD Loan Holder Notification File – Action Required

  • Contact Information

Previously Posted Guidance

Below is the list of previously posted communications in the “TPD Discharge Information” series, along with a brief description of each communication.

Directing Borrowers to Nelnet Total and Permanent Disability Servicer Beginning July 1, 2013

As explained in the first Electronic Announcement in the series (May 17, 2013), if a borrower informs a loan holder that he or she is totally and permanently disabled and wants to apply for discharge, the loan holder must direct the borrower to the Nelnet Total and Permanent Disability Servicer. If the borrower submits a TPD discharge application to the loan holder on or after July 1, 2013, the loan holder must forward the application to the Nelnet Total and Permanent Disability Servicer.

The Nelnet Total and Permanent Disability Servicer’s contact information for borrowers is available on our borrower-focused Total and Permanent Disability Discharge and Veterans Disability Discharge Contact Information page. This page provides phone, e-mail, and Web site information for the Nelnet Total and Permanent Disability Servicer. The current phone, e-mail, and Web site information will not change; however, on July 1, 2013, we will update the language on the page to reflect the new TPD discharge process.

While the Nelnet Total and Permanent Disability Servicer’s phone and e-mail contact information should be shared with borrowers, we strongly encourage loan holders to direct borrowers to the Total and Permanent Disability (TPD) Discharge Web site at www.disabilitydischarge.com for general information about the TPD discharge process. Beginning July 1, 2013, this site will reflect the new TPD discharge regulations and explain the TPD discharge procedures, eligibility criteria, post-discharge monitoring period, and conditions that may result in the reinstatement of a discharged loan or TEACH Grant service obligation. In addition, borrowers will be able to access the TPD discharge application via the site.

Note: As previously explained, there will be an updated TPD discharge application for use beginning July 1, 2013. The updated TPD discharge application is the only version of the TPD discharge application that will be available on the Total and Permanent Disability (TPD) Discharge Web site from July 1, 2013 forward. Despite the availability of the updated application, we know that some borrowers may complete and submit the previous TPD discharge application to their loan holders for a period of time. The Nelnet Total and Permanent Disability Servicer is prepared for this and will accept the previous TPD discharge application through December 31, 2013. Beginning January 1, 2014, however, the Nelnet Total and Permanent Disability Servicer will accept only the updated TPD discharge application. If a borrower submits the previous version of the TPD discharge application on or after January 1, 2014, the Nelnet Total and Permanent Disability Servicer will inform the borrower that he or she must complete and submit the updated TPD discharge application before the borrower’s discharge request can be processed.

TPD Loan Holder Notification File – Action Required

As explained in the second Electronic Announcement in the series (May 24, 2013), the Nelnet Total and Permanent Disability Servicer will use the TPD LHN File to communicate information to FFEL Program guaranty agencies, FFEL Program lenders or lender servicers, and Perkins Loan schools about borrowers whose TPD discharge applications are received by us on or after July 1, 2013. Throughout the new TPD discharge process, there will be several points when the Nelnet Total and Permanent Disability Servicer will notify loan holders (as well as our team of federal loan servicers who assist us in the servicing of federally-owned loans and TEACH Grants) of actions the loan holder must take related to a borrower’s account.

Key information about TPD LHN File transmittal that loan holders need to understand in preparation for July 1, 2013 is as follows:

  • The Nelnet Total and Permanent Disability Servicer will send the TPD LHN File to FFEL Program lenders or lender servicers, FFEL Program guaranty agencies, and Perkins Loan schools in a comma separated values file format (*.csv).

  • FFEL Program guaranty agencies will have the option of receiving the TPD LHN File through the Student Aid Information Gateway (SAIG) or via e-mail to a designated contact.

    Guaranty Agency SAIG Option – A guaranty agency that wants to use the SAIG option for receiving the TPD LHN File must inform the Nelnet Total and Permanent Disability Servicer via e-mail of the SAIG mailbox (TG number) to which the guaranty agency wants the notification file sent.

    Guaranty Agency E-mail Option – A guaranty agency that wants to use the e-mail option for receiving the TPD LHN File must designate its contact for receipt of the notification file through a new National Student Loan Data System (NSLDS) contact type.

  • FFEL Program lenders or lender servicers and Perkins Loan schools will receive the TPD LHN File via e-mail to a designated contact. Each entity must designate its contact for receipt of the notification file through the new NSLDS contact type.

Action Item Reminder: Before July 1, 2013, each loan holder must follow the instructions outlined in the May 24th announcement to ensure that the Nelnet Total and Permanent Disability Servicer knows the SAIG mailbox (TG number) or e-mail address to which it will send the loan holder’s TPD LHN Files. Action items that FFEL Program guaranty agencies, FFEL Program lenders or lender servicers, and Perkins Loan schools must complete between now and July 1, 2013 are identified by “☑ ACTION ITEM” and explained to loan holders.

For complete information about the TPD LHN File, please refer to the May 24th announcement and its two attachments titled “TPD Loan Holder Notification File Overview” and “TPD Loan Holder Notification File Layout.”

Contact Information

We appreciate the financial aid community’s participation in our implementation of the new TPD discharge process. If it is necessary to provide additional information after the July 1, 2013 implementation, we will do so through subsequent “TPD Discharge Information” Electronic Announcements.

Assistance with TPD discharge processing is available as follows:

   

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