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FAQ: What is the process for a loan discharge due to a disability in the Direct Loan program?

August 23, 2011

As a direct loan servicer, Nelnet’s Partner Solutions team receives questions from the school financial aid and borrower community on a regular basis.  In an effort to share the information and educate our school partners, Partner Solutions is posting to its blog some of the more relevant and well-timed questions that we receive.

Q:  What is the process for a loan discharge due to disability in the Direct Loan program? With FFELP, the student and physician completed a certification form and then sent it to the lender (or servicer) or guaranty agency.

A:  The borrower should complete his or her section of the Total and Permanent Disability application located at http://disabilitydischarge.com/Pages/Users.aspx?id=35, and then have a physician complete the designated section of the form.  The completed application, along with any supporting documentation, should be forwarded to the servicer assigned to the borrowers’ Direct (or PUT) Loan.  If there is more than one servicer for the borrower’s loans, he/she should be sure to send a copy of the application and supporting documentation to each servicer.  The servicer(s) will make a determination of the completeness of the application and documentation and then forward to Nelnet, the Total and Permanent Disability (TPD) servicer, who then works with the Department of Education (ED) for final approval.  More information about Total and Permanent Disability is available at www.disabilitydischarge.com/Pages/General.aspx.

If you have a question, please let us know.  We will get it answered for you ASAP!

Alan Ishida - Regional Director, Nelnet Partner Solutions (CO, HI, Guam, IA, WI, WV)

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