March 5, 2009

Revised Total and Permanent Disability Discharge Application Form

The U.S. Department of Education (ED) posted DCL GEN-09-01/FP-09-01/CB-09-01, announcing release of the revised Total and Permanent Disability Discharge Application form, on Feb. 9, 2009. This revised application is available for borrower use in the Federal Family Education Loan Program (FFELP), Direct Loan, Perkins loan and Teacher Education for College and Higher Education (TEACH) Grant programs.

The revised discharge application form reflects changes to the terms of total and permanent disability discharges enacted by the Title IV final regulations for the FFELP, Direct Loan, and Perkins loan program that became effective on July 1, 2008.

Veterans

The revised discharge application form also reflects a provision in the Higher Education Opportunity Act (HEOA) that establishes a new standard for determining if certain veterans are totally and permanently disabled for Title IV loan discharge purposes. Specifically, a veteran who has been determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected condition or disability and who provides documentation of that determination will be considered totally and permanently disabled for loan discharge purposes. The veteran will not be required to provide any additional documentation for discharge. This also applies to eligible veterans who request a discharge of a TEACH Grant service obligation based on total and permanent disability.

ED will issue a separate Dear Colleague Letter (DCL) that explains the new standard for veterans and provides detailed operational guidance to FFELP lenders, guaranty agencies and Perkins school lenders. This guidance will include additional information about documentation requirements and special procedures for processing total and permanent disability discharge requests from veterans who are covered by the HEOA provision. We anticipate more changes to the discharge application in the future due to additional HEOA provisions that require rulemaking.

Implementation

The revised form, with an expiration date of Dec. 11, 2011, is attached to the DCL. Program participants are urged to begin distributing the revised form to borrowers as soon as possible. Beginning July 1, 2009, only the revised form may be provided to borrowers; however, the previous version of the form, with an expiration date of May 31, 2008, may continue to be accepted after this date.

The revised Total and Permanent Disability Discharge Application form and other approved forms can be found in the Forms section for schools and lenders on OGSLP’s Web site. For more information about the revised form, contact OGSLP’s Policy, Compliance and Training department at 405.234.4432 or pct@ogslp.org.