Americans will have received the bad news that the Department of Education has closed applications for student loan forgiveness based on severe medical impairments, after over half a million applied to the program. So what do you do now?
However, the applications are not expected to be completed until Spring 2025 so there could be a waiting period to be accepted.
The Total and Permanent Disability Discharge program (TPDD) aimed to allow borrowers to wipe out their debt based on medical injury or ailment, provided it ensured they could not engage in substantial, gainful activity for the last five, or next five, years.
The suspension of the scheme comes as part of an aim from President Joe Biden’s departing government to make the federal student loans process smoother, but the real world impact is jeopardy for borrowers.
“We will be transitioning Total and Permanent Disability (TPD) discharges to ED through StudentAid.gov,” explains the Department of Education. “Previously, TPD discharges were managed by a designated servicer.
Can I still apply to the Total and Permanent Disability Discharge program (TPDD)?
The good news is the scheme, that has had over $16bn investment, is paused instead of cancelled, and the Department of Education are still accepting applications.