Posted Date: March 5, 2014

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

Subject: TPD Discharge Information - Total and Permanent Disability Discharge Processing Reminders

In several electronic announcements posted to the Information for Financial Aid Professionals (IFAP) Web site, we provided policy and operational guidance about the new regulations related to Total and Permanent Disability (TPD) Discharge processing. A list of those announcements is provided in the "Previously Posted Guidance" section below.

In this announcement, we provide some key reminders for the community to help improve the processing of TPD discharge applications under the new regulations.

TPD Discharge Application Reminder – Borrowers Should Apply via Total and Permanent Disability Discharge Web Site

On July 1, 2013 the TPD Discharge Application (OMB No. 1845-0065, expiration date 6/30/2016) for borrowers applying for TPD discharge was introduced to the community. To allow for a transition period, previous versions of the application were accepted through December 31, 2013. At this time, the Nelnet Total and Permanent Disability Servicer is no longer accepting previous versions of the TPD discharge application. Borrowers in need of a TPD discharge application should be directed to the Total and Permanent Disability Discharge Web site at www.disabilitydischarge.com. Doing so will help ensure borrowers use the correct application and have direct access to assistance throughout the TPD discharge process.

We appreciate the community's assistance in directing borrowers to the Nelnet Total and Permanent Disability Servicer and www.disabilitydischarge.com when applying for a TPD discharge.

Note: The Nelnet Total and Permanent Disability Servicer continues to receive a large number of assignments for borrowers who submitted TPD discharge applications prior to July 1, 2013. If a loan holder still has TPD discharge applications received prior to July 1, 2013, it should forward those applications, even if they are not complete, to the Nelnet Total and Permanent Disability Servicer no later than Friday, May 30, 2014. Pre-July 1, 2013 applications received after May 30, 2014 will be rejected.

Key Reminders for Post-7/1/2013 TPD Discharge Processing - Loan Holder Responsibilities

The following reminders should help improve TPD discharge processing. Please ensure your organization's processes and procedures have been updated accordingly:

  • Processing of Refunds If a borrower is approved for a TPD discharge, the loan holder is responsible for sending any refunds due to the borrower as of the disability date. The refund(s) must be completed before submitting the assignment to the Department.

  • Reviewing National Student Loan Data System (NSLDS) Information The Nelnet Total and Permanent Disability Servicer uses the NSLDS to retrieve loan holder and contact information to send Loan Holder Notification (LHN) files. To ensure your organization receives LHN files timely, keep both loan holder information and contact information on the NSLDS Professional Web site current. Instructions to add or update this information is provided in an attachment to the May 24, 2013 Electronic Announcement.

  • NSLDS Status Codes NSLDS status codes should not be updated to DI or DS until after your organization receives the LHN file indicating that the borrower's application is approved. As a reminder, when the NSLDS status code is updated, it changes the contact codes used for the LHN files. As a result, if your organization updates the status code too early, it will not receive the LHN files with the updated information during the remainder of the TPD discharge process.

  • LHN files – The LHN file is the primary form of communication of TPD discharge information between the Nelnet Total and Permanent Disability Servicer and loan holders. For complete information about the LHN, refer to the May 24, 2013 Electronic Announcement. If your organization does not currently receive a LHN file, it should take the following steps to begin receiving it:

    • Ensure the NSLDS has the correct loan holder listed and/or has the correct contact information listed.
    • Once the information on the NSLDS is verified, contact the Nelnet Total and Permanent Disability Servicer by e-mail at disabilityinformation@nelnet.net or by phone at 888/303-7818. The Nelnet Total and Permanent Disability Servicer will need an e-mail address to send the encrypted manual file. Note: The request to receive LHN files must come from the loan holder.

    LHN Processing and Upcoming Changes

    Beginning in spring 2014, loan holders will be able to receive the LHN file via the Student Aid Internet Gateway (SAIG) instead of via e-mail. Loan holders will need to add a new service to their SAIG mailbox through the SAIG Enrollment Web site. We will notify the community when the new service is available and provide more information about the SAIG process, including the required steps to sign up for it, in a forthcoming communication.

Previously Posted Guidance

May 17, 2013: Information about the July 1, 2013 TPD discharge regulations

May 24, 2013: Information about the TPD LHN files

June 12, 2013: Updated TPD discharge assignment procedures for guaranty agencies

June 12, 2013: Updated TPD discharge assignment procedures for Perkins Loan schools

June 20, 2013 and July 3, 2013: Reminder guidance related to the July 1, 2013 TPD discharge regulations

Contact Information

We appreciate the financial aid community's participation in our implementation of the new TPD discharge process.

Assistance with TPD discharge processing is available as follows:

   

End of Page