Student Loan Discharge Approved

cj1964
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Joined: 28 Jul 2015, 15:08

24 May 2016, 15:06 #41

blackdogbarks wrote:No trolling. You said you were working. Please see the following, especially paragraph (1) which is from the disabilitydis charge website:


How Do I Show That I’m Totally And Permanently Disabled?

Regardless of how you obtain a TPD discharge application, the information that you provide when you apply will assist the Department in determining if you qualify for discharge of your federal student loans and/or TEACH Grant service obligation on the basis of your total and permanent disability. You can show that you are totally and permanently disabled in one of the following three ways:

1 – If you are a veteran, you can submit documentation from the U.S. Department of Veterans Affairs (VA) showing that the VA has determined that you are unemployable due to a service-connected disability.


You're working.
I am working, so what? You should spend some time reading regulation or maybe even the application because you don't understand what you wrote. So lets break it down so that it is easily understandable. First you have to understand that your definition of something may not be a correct interpretation of a definition of something from a federal agency. You actually have to read the federal agency definition of something in each part of the regulation because yet again the definition of something can and does change throughout a regulation or from agency to agency. Bottom line is you need to make sure you are reading and understanding the definition written by the agency and not whether you agree with it or think it is ethical. If you don't agree with it petition the agency to have it changed, but that is not the discussion here so lets stay on task. 

Apparently the DOE defines "unemployability" differently or better yet the documentation requirements to meet their definition of "unemployability" because on the first page of the application (and also written in the regulation), which is also why I tell you to read all of something and not what seems to fit your argument you find what documentation you need to submit to meet the DOE definition of "unemployability". 


I applied for this program under #1 which you so nicely quoted, but here it is again from the first page of the application - "To qualify for this discharge, you must meet one of the following requirements: 1. You are a veteran who has been determined by the U.S. Department of Veterans Affairs (VA) to be unemployable due to a service-connected disability, and you provide documentation from the VA of that determination;" Now lets go a little further on the same page of the application and here are the documentation requirements to meet this requirement - "If you are a veteran applying for discharge under requirement #1, you must provide documentation from the VA showing that the VA has determined
that you are unemployable due to a service-connected disability. You do not meet this requirement if your disability is not service-connected. The
following two types of VA determinations meet this requirement: (1) a determination that you have a service-connected disability (or disabilities) that
is 100% disabling; or (2) a determination that you are totally disabled based on an individual unemployability determination." I used VA determination number one (1) to meet the DOE requirement for applying for this benefit. This isn't up for interpretation because NO WHERE in the sentence does it say I have to be unemployable to meet the documentation requirements and further the application requirements for approval. This isn't ethically challenged either, why you ask, well because I used the regulation the way it was written (applied ethics) to my advantage.


So going back to flawed logic I really shouldn't be working because I am 100% P&T even though by regulation I can work because I am not IU. This isn't about how you feel about something it is about applying the law correctly. If you don't like the law (implementing regulation in this case), then change it. Don't personally attack someone for applying the regulation appropriately because you "feel" that it isn't how you would define something. 
Keep doing what you are doing. Myself and others appreciate the information. It seems that others are just waiting for someone to say anything that they may be able to challenge whether they are right or wrong. I don't think this site was created for that purpose. I see no one responded regarding any of the other benefits that come with being 100% P&T. I wonder why!!
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Cavmedic
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Joined: 13 Aug 2009, 06:19

24 May 2016, 16:28 #42

Totally missed the point.
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RetiredInVet
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Joined: 18 May 2016, 00:05

24 May 2016, 16:29 #43

Congrats. Love hearing all the Vets complain about illegal. As most lie during their C&P exams on range of motion at the time of the exam or try to get sleep apnea as if it is service connected....right! If you are entitled to the benefit then go for it as you would with VA SCD. If you worked for IBM and had issues associated with working there so long you would get anything special...so why do you/we believe we should be special compensation from VA...because its law!!

So I wonder if we are entitled to cancelling our childs debts. Now that would be a racket if they could.
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2502DOC
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Joined: 02 Jul 2016, 17:44

01 Sep 2016, 02:55 #44

Just learned about this program via getting to 100%, and looked it up on here out of curiousity. Looked at the official regs and it does seem to use the word unemployability alot, but then it states it differently in other places as the main requirement to use it is "If you are a veteran, you can submit documentation from the U.S. Department of Veterans Affairs (VA) showing that the VA has determined that you have a service-connected disability (or disabilities) that is 100% disabling or that you are totally disabled based on an individual unemployability rating;". Therefore, if you are 100% then you are good to go. I think it is hard to see ill or unethical intent via what someone is saying through text, so I think we should stop with the follow up questions of do you work, why do you work, etc. Just answer the specific question that they are asking, or if you don't want to then just don't answer it. No need to try to call people out. It can be hard to find accurate information on the web sometimes so vets come here, and rightly so as I love it. People will always want to know all of the information, and the classic post that people go crazy on is if someone gets IU yes they will want to know if they can still work , as some of it may be curiousity, or perhaps they don't want to live in a hole with a check and die but would like to have a part time shift to stay active. It is hard to know why people are asking or telling something, so just take it for what it is and continue to try to help the veteran community. Good luck to everyone that applied for this. If the government tries to help you, you should let them, as it won't happen too often or won't last for too long but thats just my opinion. 
U.S. Army (Ret)Iraq 2007-08
Afghanistan 2010
100% P&T 
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Nick
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Joined: 27 Feb 2011, 02:04

01 Sep 2016, 04:16 #45

The ethical concerns raised by some of our learned and knowledgeable vets above hinges on interpreting the intent of the law -Did Congress intend for loan forgiveness to be extended only to veterans who were unable to maintain employment?

The appropriate section of USC code is 20 USC 1087 (a). Subparagraph (1) gives the Secretary of HEW certain authority ..."The Secretary may develop such safeguards as the Secretary determines necessary to prevent fraud and abuse in the discharge of liability under this subsection. Notwithstanding any other provision of this subsection, the Secretary may promulgate regulations to reinstate the obligation of, and resume collection on, loans discharged under this subsection in any case in which-

(A) a borrower received a discharge of liability under this subsection and after the discharge the borrower-
(i) receives a loan made, insured, or guaranteed under this subchapter and part C of subchapter I of chapter 34 of title 42; or
(ii) has earned income in excess of the poverty line; or

(B) the Secretary determines the reinstatement and resumption to be necessary."

20 USC 1087 (a)(2) reads:
(2) Disability determinations

"A borrower who has been determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected condition and who provides documentation of such determination to the Secretary of Education, shall be considered permanently and totally disabled for the purpose of discharging such borrower's loans under this subsection, and such borrower shall not be required to present additional documentation for purposes of this subsection."

So current law appears to envision this forgiveness to be extended to veterans specifically determined to be unemployable and also gives the Secretary of HEW the authority to reinstate loans if the forgiven borrower has income above the poverty line. Among The regulations the HEW secretary has published is 34 CFR 685.213 and in the section on disabled veteran eligiblity, we find the following:
"To qualify for a discharge of a Direct Loan based on a total and permanent disability as described in paragraph (2) of the definition of that term in § 685.102(b), a veteran must submit a discharge application to the Secretary on a form approved by the Secretary. The application must be accompanied by documentation from the Department of Veterans Affairs showing that the Department of Veterans Affairs has determined that the veteran is unemployable due to a service-connected disability. The Secretary does not require the veteran to provide any additional documentation related to the veteran's disability. Upon receipt of the veteran's application, the Secretary - "

'...total and permanent disability as described in paragraph (2) of the definition of that term in § 685.102(b)' - that section reads "(2) Has been determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected disability."

So both the underlying United States Code section and the Code of Federal regulations describe Direct loan forgiveness for totally disabled veterans only in terms of unemployability.

Finally, newly introduced legislation would change the provision to include those assigned a combined disability rating of 100%. Would such a change be introduced if the current law already included those vets?

H.R.4845 - Disabled Veterans Student Loan Protection Act of 2016, currently in the House Education committee ( where it will likely die) would replace paragraph (2) above with new language - part of which would read:

'A borrower who has been determined to be unemployable by the Secretary of Veterans Affairs or has been assigned a disability rating of 100 percent (or a combination of ratings equaling 100 percent) by the Secretary of Veterans Affairs or the Secretary of Defense for a service-connected disability (as defined in section 101 of title 38, United States Code), regardless of whether such borrower provides documentation of such rating to the Secretary of Education, shall be considered permanently and totally disabled for the purpose of discharging such borrower's loans under this subsection, and such borrower shall not be required to present any additional documentation for purposes of this subsection. '

I do not fault any 100% scheduler disabled veteran who applies for and is awarded student loan forgiveness for doing so based on the ambiguity found in the descriptions of this program. But the underlying law and published CFR regulation clearly envisions this forgiveness only for veterans with a TDIU rating.
Nick
USAF RETIRED
100% P&T
100% CRSC

Complete layman - not a VSO and not a VA employee.
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cici30045
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Joined: 17 Jul 2014, 20:29

10 Sep 2016, 03:57 #46

I been on SSDI and they sent me a letter saying I was approved for discharge for my student loans, which were quite a few. Nelnet said it would show pay on my credit report but takes a few months. I didn't reach out to Nelnet they reached out to me since I was SSDI. I am 70% w/ IU

Cici
Sister In Arms
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gaboy
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Joined: 25 Jul 2013, 13:32

10 Sep 2016, 15:16 #47

cici30045 wrote:
I been on SSDI and they sent me a letter saying I was approved for discharge for my student loans, which were quite a few. Nelnet said it would show pay on my credit report but takes a few months. I didn't reach out to Nelnet they reached out to me since I was SSDI. I am 70% w/ IU

Cici
Sister In Arms
The loans will show as paid as agreed with a zero balance. For credit purpose it will show as you took out a student loan and paid every dollar back. You will also see a bump in your credit score as your debt to credit will decrease 
100% P&T
SSDI
DAV Life Member
VFW Life Member
OEF/OIF
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Hil
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Joined: 03 Jun 2016, 12:08

12 Sep 2016, 20:56 #48

I applied last week for discharge of my student loans because of my 100% T&P award in August 2016. I never missed a payment for over 20yrs. Also, they are starting to discharge most but not all loans in 2017 if you made 120 payments prior to 2017 without missing a payment and worked for Public Service Entity and other qualifications. I worked for a state college for over 22 years. So, I would have gotten the discharge anyway. Can you COMPLAINING VETS understand english? NELNET and the GOVERNMENT set up these policies not the VA Vets with 100% disability.

What most people don't understand is that these loans did NOT work well to employ people with a degree after going in debt. So, they understand the hardship caused by flooding the market with degrees and the low wage earners (with a degree) not being able to pay full payments or not being able to pay at all. Now, they are willing to make it right not just with VETS. READ THE WEBSITE SITES INFO-----Nelnet.

The COMPLAINERS should go call NELNET or go to their website and get all of the info on discharges instead of making uneducated comments on what is NOT facts.

The Vets complaining about the discharge of loans should read the laws and forget the emotional BS. If you didn't have a student loan it is none of your business. It is the business of the US GOVERNMENT, VA, SS, Nelnet and MOST OF ALL THE VET THAT HAS 100% T&P.

So, the unethical argument doesn't hold water and never did.

End Of Story
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Hil
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Joined: 03 Jun 2016, 12:08

12 Sep 2016, 21:07 #49

Congrats!!! And, don't let those with misinformation and uneducated bias with no facts effect you. YOU ARE ENTITLED BY LAW AND MORALITY.

I applied recently because of my 100% T&P. But they were going to forgive mine whether I was a VET OR NOT.

So, the nay sayers need to read the facts on who can and who can't get the discharges. Vets are NOT the only ones entitled for discharges.

I still don't understand why it is someones business if they don't have a loan? 

MAYBE TOO MUCH TIME ON THEIR HANDS AND DRINKING TOO MUCH BEER WITH THIER VA DISABILITY CHECKS? MAYBE DRINKING WITH VA MONEY IS IMMORAL?
not not and not.

REMEMBER, THERE IS ALWAYS THREE POINTING BACK AT YOU WITH UNWARRANTED, UNEDUCATED, SPOUTS.
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cici30045
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Joined: 17 Jul 2014, 20:29

12 Sep 2016, 22:05 #50

This board should be about helping each other and being nice. We already are disable and don't need extra stress. If I have nothing nice to say, I try not to say anything.

Cici
Sister In Arms
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Hil
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Joined: 03 Jun 2016, 12:08

12 Sep 2016, 22:44 #51

Is one not to take advantage of Different gifts from different states like........property tax, license plates, state park fees, etc etc???????? I see the same ole trolls saying the same ole things on here over and over. I say; you're a VET TAKE ANYTHING YOU CAN GET YOUR GREEDY HANDS ON and ENJOY THE BENIFIT "YOU EARNED IT".
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blackdogbarks
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Joined: 07 Mar 2016, 00:13

12 Sep 2016, 23:46 #52

'Greedy hands!' Class act.
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Hil
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Joined: 03 Jun 2016, 12:08

24 Feb 2017, 13:01 #53

Got the discharge of my student loan in less than six months. They actually paid me back for five months payments from the date of filing. I had been paying on this debt for 20yrs and never did see an end in sight.

The discharge is considered Earned Income. It must be filed with the IRS. Tax time has come and gone and I gave them $1000 on a $13000 dollar debt. Paying this tax and the burden of student loan no longer exsist. I didn't mind paying them the tax.

I would NEVER recommend a student loan to anyone seeking an Ordinary Degree. High paying degress should not be a problem.
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JohnEboy
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Joined: 06 Feb 2014, 02:46

24 Feb 2017, 16:57 #54

blackdogbarks wrote:
I don't get it, either. You have debts and you're working and getting compensated. But you don't want to pay your obligations?
Because they don't have to??  Becaue the law permits it?? Because it's perfectly legal to work, get compensation and get your student loan discaharged if you are 100% P&T by the VA schedule!!!  That's why people get their student loans discharged under the law that is in effect right now.  Here is a good example of a law that probably wasn't written with this intent but as a consequence of the law this unexpected consequence of the law as enacted.  So until the law is rewritten and reenacted by Congress this is the way it is.  I have absolutely no regrets about people taking advantage of this law as written and enacted BECAUSE that are lots of other laws that do the exact same type of thing for special interests and special interest groups that I, and you, are not entitled to use because we are not a member of that special interest or special interest group.

So good for everyone who uses this law to get their student loans discharged.  When all the specail interest laws no longer exist, then I'll start worrying about this one.  But not until then.   
<br>


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candymanfb
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Joined: 13 Aug 2012, 17:08

24 Feb 2017, 22:33 #55

I agree with Hil and JohnEBoy!

Student loans may become a major problem with regards to the amount of debt people carry. If anyone can get from underneath it - Bravo to them!
100% Schedular - SMC (s)



Don't Ask For Permission,  Ask For Forgiveness
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jumapili
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Joined: 22 Feb 2017, 06:11

28 Feb 2017, 14:58 #56

So I wonder did you get a 1099c yet.  See that is the kicker on this benefit... You have to pay tax on it as though it were income or at least that is what I understand.  So for someone like me who had 80k that is hefty IRS bill.  It is not 80k in loans but you know IRS is no joke.  I have not received the 1099C yet though they approved it last April.  Mine was not for the service connected though it was from a letter from my dr.  So I do have the 3-year monitoring.  I went back asked if i should change iit seems I would have to reinstate them and then reapply.  If I understood a tax guy though he said you can subtract insolvency from (other bills owed) at the time approval to bring that down.  I guess I am gonna have to see how that shakes out.

Jumapili
100 P/T UI
PTSD - 70
Migrains -50
Breast Cancer 100% Pension

 
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ACJ
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Joined: 25 Sep 2012, 17:43

01 Mar 2017, 00:43 #57

I asked the same question I got my SL Discharged . I asked in the tax forum if anyone had received a 1099c yet . No response, I discharged my loans last January. 
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Nick
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Joined: 27 Feb 2011, 02:04

01 Mar 2017, 01:39 #58

Underlining and bold added. The law requires that the veteran be unemployable. The Department of Education decided that a total award from the VA, not just a TDIU award, means that the veteran is unemployable. Note the date -more recent guidance may be available although I could not find any.


"Publication Date: May 15, 2009
DCL ID: GEN-09-07
FP-09-05
CB-09-04

Subject: Procedures for discharging Title IV loans based on a determination by the Department of Veterans Affairs that a veteran is unemployable due to a service-connected condition or disability

Summary: This letter explains the change made to §437(a) of the Higher Education Act by the Higher Education Opportunity Act that establishes a separate standard for determining whether certain veterans are totally and permanently disabled for Title IV loan discharge purposes. This letter provides implementation guidance to FFEL lenders, guaranty agencies, and Perkins school lenders on the procedures for processing total and permanent disability discharge requests for borrowers who are covered by the new statutory provisions.

Note: In a May 17, 2013 Electronic Announcement, we explained how the total and permanent disability (TPD) discharge regulations and process will change on July 1, 2013. Refer to this announcement for the updated guidance.

Note: The phone, fax, and mailing address information for the Department's Veterans Disability Discharge Unit provided in Section VI Mailing Address has changed since publication of this Dear Colleague Letter. The updated information is as follows:

Phone:


888/303-7818

Fax:


303/696-5669

Mailing Address:


Nelnet Total and Permanent Disability Servicer
P.O. Box 173904
Denver, CO 80217

For overnight delivery:

Nelnet Total and Permanent Disability Servicer
3015 South Parker Road, Suite 400
Aurora, CO 80014

Note: The physical street address for mailing assignments and referrals is in Aurora, CO, a suburb of Denver.

Dear Colleague:

This Dear Colleague Letter provides an overview of the procedures for processing total and permanent disability loan discharges for Federal Family Education Loan (FFEL) Program and Perkins Loan borrowers who have been determined by the Department of Veterans Affairs (VA) to be unemployable due to a service-connected condition. The Department of Education (the Department) will follow the same procedures for Direct Loan borrowers and other borrowers whose loans are held by the Department, and for Teacher Education Assistance for College and Higher Education (TEACH) Grant recipients who have applied for total and permanent disability discharge of their TEACH Grant service obligations.

I. Overview of Statutory Change

Section 437(b) of the Higher Education Opportunity Act (HEOA) amended §437(a) of the Higher Education Act of 1965, as amended (HEA) to provide that a FFEL loan may be discharged if the borrower-

. . .has been determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected condition and . . . provides documentation of such determination to the Secretary of Education, [such borrower] shall be considered permanently and totally disabled for the purpose of discharging such borrower's loans under this subsection, and such borrower shall not be required to present additional documentation for purposes of this subsection.

This same standard applies to the Direct Loan Program in accordance with §455(a)(1) of the HEA. In the Perkins Loan Program, §464(b)(1)(A)(iv) of the HEOA amended §464(c)(1)(F) of the HEA to provide that a borrower's liability to repay a Perkins Loan Program loan shall be cancelled "if the borrower is determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected disability." These provisions became effective August 14, 2008 for the FFEL and Direct Loan programs, and July 1, 2008 for the Perkins Loan Program.

II. Department of Veterans Affairs Determinations That Qualify a Borrower for a Disability Discharge Under the New Statutory Standard

To qualify for a total and permanent disability loan discharge under the statutory standard described above, a veteran must have received a determination from the VA that he or she is unemployable due to a service-connected condition or disability.

We have consulted with the VA and gathered information about its disability determination process. We have determined that a 100% or total disability rating from the VA represents a determination that the veteran has a total impairment in earning capacity, i.e., is unemployable. In addition, a veteran with a less than 100% disability rating may qualify for total disability based on an individual unemployability determination, if the VA determines that the veteran's service-connected disabilities are sufficient to result in unemployability.

Accordingly, there are two types of VA determinations that qualify a veteran for a discharge of his or her Title IV student loans based on the statutory standard:

1. A determination that the veteran has a service-connected disability, or service connected disabilities, that are 100% disabling; or

2. A determination that the veteran is totally disabled based on an individual unemployability determination.

The VA grants individual unemployability only for service-connected conditions. Therefore, any determination of individual unemployability qualifies a veteran for discharge. In the case of a determination that a veteran is 100% disabled, the determination must specify that the disabilities are service-connected.

III. Processing Loan Discharge Applications for Veterans Who Have Been Determined to be Unemployable Due to a Service-Connected Condition or Disability

The following procedures must be followed when processing a disability discharge request for a veteran:

The borrower must apply to the loan holder (i.e., the current owner of the loan) for a total and permanent disability discharge. For Perkins Loans, the loan holder is the Perkins school lender. For FFEL loans, the loan holder is the lender or, if a default claim has been paid on the loan, the guaranty agency. For FFEL or Perkins Loans that have been assigned to the Department, the loan holder is the Department. To apply, a borrower who has received one of the VA disability determinations specified above completes only Sections 1 and 3 of the recently approved Discharge Application: Total and Permanent Disability (TPD application) [OMB No. 1845-0065, Expiration Date: 12/31/2011] and submits the application to the loan holder.

The borrower is not required to have a physician complete Section 4 of the TPD application. Instead, the borrower submits with the application documentation from the VA showing that the borrower has received a determination of individual unemployability or has been determined to be 100% disabled due to one or more service-connected disabilities. The borrower may provide a copy of the VA Rating Decision or a letter from the VA confirming that the borrower has received one of the qualifying ratings. As explained above, a rating of 100% disabled must specify that the borrower's condition is service-connected. After receiving the TPD application, the loan holder must suspend collection activity on the loan.

For FFEL borrowers, the loan holder (either the lender or the guaranty agency) must ensure that the TPD application has been completed and that the appropriate VA documentation has been provided and must make a preliminary determination of the borrower's eligibility. If the current loan holder is the lender and the VA documentation indicates that the borrower is eligible for a TPD discharge, the holder must then submit the application and VA documentation to the guaranty agency. At the same time the FFEL lender should file a TPD claim with the guaranty agency. For FFEL borrowers, both the FFEL lender and the guaranty agency will make preliminary determinations of eligibility. For Perkins borrowers, the Perkins school must ensure that the TPD application has been completed and the appropriate VA documentation provided and make the preliminary determination of eligibility.

The preliminary determination of eligibility is based on the VA documentation provided by the borrower. FFEL lenders, guaranty agencies and Perkins schools must carefully review the documentation provided by the borrower when making preliminary determinations of eligibility. If the documentation clearly demonstrates that the borrower does not qualify for a discharge under the new statutory standard for certain veterans, the TPD request must be rejected by the FFEL lender, guaranty agency or Perkins school. For example, if the VA documentation states that the borrower is 100% disabled, but also states that the borrower's disabilities are not service-connected, the TPD claim must be rejected.

If the borrower appears to be eligible for a total and permanent disability discharge based on the VA documentation, the guaranty agency or Perkins school must submit a copy of the TPD application and VA documentation to the Department, and notify the borrower that his or her disability discharge request has been submitted to the Department for further review. The guaranty agency or Perkins school does not need to assign the loan to the Department.

After receiving the TPD application and supporting documentation from the guaranty agency or Perkins school, the Department will review the VA documentation. The Department may also contact the VA for more complete information regarding the borrower's VA disability rating. If the Department determines that the borrower meets the eligibility criteria for discharge under the standard for veterans with service-connected disabilities or conditions, the Department will instruct the guaranty agency or Perkins school to discharge the loan. Borrowers who are granted a TPD discharge through this process are not placed in a three-year conditional discharge period and are not required to provide any additional medical or income information to qualify for the discharge. The outstanding balance on the loan is discharged immediately.

Upon notification by the Department that the borrower qualifies for a discharge, the guaranty agency must pay the discharge claim to the lender. If the guaranty agency is the loan holder, it must discharge the loan. The Perkins school discharges the loan upon notification by the Department. For both FFEL and Perkins Loans, the loan holder refunds any payments that were made on or after the effective date of the grant of disability by the VA. A Rating Decision from the VA will generally state the effective date of the grant of disability in the section of the Rating Decision titled "Decision." The effective date of the grant of disability is NOT the Date of the Rating Decision or the Effective Date of Payment. A letter from a VA Regional Office may simply confirm the borrower's VA disability status, without providing an effective date. If the documentation provided by the borrower does not include an effective date, the Department will obtain the effective date from the VA, and provide that information to the guaranty agency or Perkins school. Receipt of a Title IV loan after the effective date does not disqualify a borrower for a TPD discharge; therefore the Department will not review the borrower's National Student Loan Data System (NSLDS) records for this purpose.

If a borrower's application for a TPD loan discharge based on VA documentation is denied by a Perkins school after its review or by the Department, the Perkins school must notify the borrower that the discharge request has been denied, and that the borrower must resume repayment on the loan. If the FFEL loan was held by a lender and the application is denied by a guaranty agency after its review or by the Department, the guaranty agency will return the claim to the lender. The FFEL loan holder will notify the borrower that the discharge request has been denied, and that the borrower must resume payment on the loan. The loan is deemed to have been in forbearance from the date collection activity was suspended. If the VA documentation suggests that the borrower may be totally and permanently disabled, but the borrower is not eligible for the total and permanent disability discharge process described in this letter because the borrower's disabilities are not service-connected, the FFEL loan holder or Perkins school must advise the borrower to re-apply for a TPD discharge through the standard TPD discharge process. To re-apply for a total and permanent disability discharge under the standard process, the borrower must have a physician complete the Physician's Certification Section of the TPD application and resubmit the TPD application to the loan holder. The borrower may include the VA documentation, as well as any other supporting documentation, along with the completed TPD application. The Department will take the VA documentation into consideration when conducting its medical review under the standard process for total and permanent disability discharges.

During the discharge process, loan holders must provide borrowers with a phone number they can call to speak with a loan holder representative if they have any questions about their discharge requests. The Department's Veterans Disability Discharge Unit (see contact information at the end of this letter) will assist loan holders in addressing questions about specific applications or processes for discharges on the basis of VA documentation. As with the current total and permanent disability discharge process, there is no formal appeals process for a borrower whose application for discharge has been denied.

IV. Application Availability and Effective Date For Use

We have revised the TPD application [OMB Number 1845-0065] to reflect changes to the TPD process made by final regulations that were published on November 1, 2007 [72 FR 61960], as well as the HEOA provisions described in this letter. The revised TPD application has been approved by the Office of Management and Budget and has been posted to the Department's Information for Financial Aid Professionals (IFAP) web site as an attachment to Dear Colleague Letters GEN-09-01, FP-09-01, and CB-09-01, which are available at this link:

http://ifap.ed.gov/dpcletters/GEN0901FP0901CB0901.html.

While the revised TPD application is being phased in, Perkins, FFEL, and Direct Loan borrowers may apply for TPD discharges based on VA documentation using the earlier version of the application. The borrower may leave the Physician's Certification Section of the form blank when applying for a TPD discharge based on a qualifying disability determination by the VA. The Physician's Certification is in Section 3 of the earlier version of the TPD form, and is in Section 4 of the recently approved version. In place of the information requested in the Physician's Certification Section of the TPD form, the borrower must submit to the loan holder a copy of the appropriate VA documentation as described in this letter.

V. Triggering Date for Implementation

The procedures for granting total and permanent disability discharges based on VA documentation are in effect as of the date of this Dear Colleague Letter.

For FFEL and Direct Loan borrowers, total and permanent discharge requests based on VA documentation received on or after August 14, 2008 must be processed using the new procedures described in this letter. For Perkins Loan borrowers, total and permanent disability discharge requests based on VA documentation received on or after July 1, 2008 must be processed using the new procedures. Applications that were submitted on or after these dates and that are currently being processed under the "regular" TPD procedures may now be processed under the procedures outlined in this Dear Colleague Letter, if the borrower provides the appropriate documentation from the VA.

In addition to providing for total and permanent disability discharges based on VA determinations, the HEOA also modified the criteria for qualifying for a total and permanent disability discharge under the standard procedures. These new criteria will be effective July 1, 2010, and will be addressed in regulations that the Department will develop as part of the negotiated rulemaking process.

VI. Mailing Address

Guaranty agencies and Perkins schools should send total and permanent disability discharge requests based on qualifying VA documentation to the Department at the following address:

U.S. Department of Education
FSA, Business Operations, Processing Division
Veterans Disability Discharge Unit
61 Forsyth Street, SW 19T89
Atlanta, GA 30303"
https://ifap.ed.gov/dpcletters/GEN0907.html
Nick
USAF RETIRED
100% P&T
100% CRSC

Complete layman - not a VSO and not a VA employee.
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candymanfb
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Joined: 13 Aug 2012, 17:08

03 Mar 2017, 22:15 #59

jumapili wrote:
So I wonder did you get a 1099c yet.  See that is the kicker on this benefit... You have to pay tax on it as though it were income or at least that is what I understand.  So for someone like me who had 80k that is hefty IRS bill.  It is not 80k in loans but you know IRS is no joke.  I have not received the 1099C yet though they approved it last April.  Mine was not for the service connected though it was from a letter from my dr.  So I do have the 3-year monitoring.  I went back asked if i should change iit seems I would have to reinstate them and then reapply.  If I understood a tax guy though he said you can subtract insolvency from (other bills owed) at the time approval to bring that down.  I guess I am gonna have to see how that shakes out.

Jumapili
100 P/T UI
PTSD - 70
Migrains -50
Breast Cancer 100% Pension

 
A member on this board has mentioned that you owe taxes only if you get a 1099c form. I got a 1099c and went through the insolvency process. Attached below is a link to the process and the form to calculate your liabilities vs. assets - it is on page 6. You would be considered insolvent if you owe more that your assets. Going through the process myself, I can't imagine why someone with student loan debt wouldn't be considered insolvent.
Please make sure you talk specifically with a CPA or a tax lawyer and not just a person at HR Block. No disrespect to HR Block type places, but I don't think anyone wants to get audited because of a seasonal employee's error. 


https://www.irs.gov/pub/irs-pdf/p4681.pdf  Page 6 for Insolvency Worksheet
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MACMACred1
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Joined: 14 Feb 2013, 19:21

03 Mar 2017, 22:57 #60

Are you insolvency if your income is over $3000.00 plus a month, just asking because I vet rated 100% plus receiving SSDI would be getting close to 5K per month.
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DDDman
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Joined: 12 Aug 2008, 01:54

04 Mar 2017, 02:45 #61

Just want to make you all aware, I got my Loan Discharge and I also got the Tax Bill for that.  You will pay taxes on that discharge.  Do your research.
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Hil
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Joined: 03 Jun 2016, 12:08

04 Mar 2017, 12:55 #62

Some people just DO NOT understand benifits and entitlements.
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Nick
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Joined: 27 Feb 2011, 02:04

04 Mar 2017, 17:36 #63

MACMACred1 wrote:
Are you insolvency if your income is over $3000.00 plus a month, just asking because I vet rated 100% plus receiving SSDI would be getting close to 5K per month.
Apparently insolvency does not matter -

The Education department letter,  found in my post above, reads in part:

"We have consulted with the VA and gathered information about its disability determination process. We have determined that a 100% or total disability rating from the VA represents a determination that the veteran has a total impairment in earning capacity, i.e., is unemployable. In addition, a veteran with a less than 100% disability rating may qualify for total disability based on an individual unemployability determination, if the VA determines that the veteran's service-connected disabilities are sufficient to result in unemployability.

Accordingly, there are two types of VA determinations that qualify a veteran for a discharge of his or her Title IV student loans based on the statutory standard:

1. A determination that the veteran has a service-connected disability, or service connected disabilities, that are 100% disabling; or

2. A determination that the veteran is totally disabled based on an individual unemployability determination"



 
Nick
USAF RETIRED
100% P&T
100% CRSC

Complete layman - not a VSO and not a VA employee.
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cici30045
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Joined: 17 Jul 2014, 20:29

04 Mar 2017, 18:14 #64

Thank you for letting others know about getting there student loan forgiven. I was able to do that also. I got approved for IU and was on Worker Comp at the time. Many on the board said I wouldn't. I believe you do what you have to do for you. If others don't agree that's there issue not yours. I do again agree with what you did. You serve your country, you were given service connected at 100% so you deserve it. Bottom line!!!!

There better things to do in life than beat up Veterans that already have issues. Come on folks really!!!

Cici
Sister In Arms
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Silo711
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Joined: 22 Jan 2015, 18:07

05 Mar 2017, 03:08 #65

If your 70% or higher in ILLINOIS you don't have to pay property tax. I could afford my property tax of 8000 per year so does that mean I shouldnt file for it since I can afford it? I think NOT! I don't make the laws, but I do follow them. I want everything I'm entitled to.
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candymanfb
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Joined: 13 Aug 2012, 17:08

05 Mar 2017, 03:18 #66

MACMACred1 wrote:
Are you insolvency if your income is over $3000.00 plus a month, just asking because I vet rated 100% plus receiving SSDI would be getting close to 5K per month.
The amount of documented debt someone has is the key! Income really doesn't matter, unless it all goes to savings and that savings amount is significant.

Someone making $1,000,000 a year with assets (bank accounts, home equity, home furnishing, cars) of $500,000 may be insolvent with $600,000 of debt (student loan, credit cards, court judgements). The monthly or yearly salary doesn't help because they still owe more than they have - even if they saved that entire monthly salary of $83,333. 


Someone making $12,000 a year with a house (an asset) paid off may be solvent with $5,000 of debt. The house as a asset is greater than the debts, assuming the house is worth more than $5k.


---------


The day before the discharged is approved is the date used to calculate assets and debts/liabilities. I'm no accountant but I got 2 As on the two 5 unit college accounting courses I had taken. The knowledge I have from those accounting courses would be pointless if it wasn't for this board letting me know about the ability to not owe taxes through insolvency - that wasn't taught in college. 
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82djumper
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Joined: 10 Dec 2016, 16:23

05 Mar 2017, 14:37 #67

Thank you for the information. I'm not P&T yet but I am not working either. 
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ldbac365
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Joined: 07 Jul 2014, 14:44

06 Mar 2017, 18:44 #68

Thank you candymanfb, this is the exact information that I needed to move forward. I am PT and decided not to apply for loan forgiveness for last year taxes, because I wasn't comfortable with not knowing everything about what I would have to pay back. I was wondering, do you apply for the insolvency before, during, or after you do your taxes? 
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candymanfb
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Joined: 13 Aug 2012, 17:08

08 Mar 2017, 02:01 #69

ldbac365 wrote:
I was wondering, do you apply for the insolvency before, during, or after you do your taxes? 
It is during tax season.

I provided documents related to my student loan insolvency to our CPA - with all other tax records for the year. He plugged the information into the year's taxes - in the appropriate section!

My student Loan forgiveness occurred in May and I then provided everything to our accountant in Feb of the next year. I would recommend having documents to back up your debts and assets - your accountant wouldn't need it, just for your personal records (credit card statement are sometimes hard to get after 12 months).

In California, our CPA charges us $300-400 yearly for our taxes, which is deductible for the following year's taxes. Initially, I needed an accountant to handle a large transaction that was taxable - I knew my accountant socially before he got his degree/CPA and he was able to give me an estimate with no obligation in July of what I would owe the IRS during the next tax season. His communication style matched well with mine, he is knowledgeable with a CPA designation, and I knew him before paying him to do taxes (I could find him if he effed up). Call around and talk to several accountants, and go with one that can confirm something you already know (i.e. Property Tax exception, VA disability not being taxable, ...) and explains it well to you! I say this because - it is important to feel comfortable with someone that has access to your a lot of your personal info.

Good Luck!
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ldbac365
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Joined: 07 Jul 2014, 14:44

08 Mar 2017, 22:24 #70

I appreciate this thank you so much, one last thing, and I apologize in advance for asking so many questions, its just amazing to get some specific answers after looking for months. I was wondering should I just apply for the discharge now or wait until I find a CPA, I did the insolvency chart and I would be insolvent, from the numbers I tallied up?
Last edited by ldbac365 on 08 Mar 2017, 22:26, edited 1 time in total.
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candymanfb
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Joined: 13 Aug 2012, 17:08

09 Mar 2017, 01:48 #71

ldbac365 wrote:
I was wondering should I just apply for the discharge now or wait until I find a CPA, I did the insolvency chart and I would be insolvent, from the numbers I tallied up?


I would apply for the discharge now/soon (which may pause your current payments and give you a refund of some past payments when discharge is finalized). The process for filing for discharge is mostly simple... just really depends on when you want to stop those loan payments (you should get an official letter that confirms this). My process took two months - from start to finish.

Finding a tax professional can be done in the Fall (or before the end of this year) at your own pace/convenience. If you are confident and comfortable with determining insolvency then I'll only use a professional only when filing taxes in 2018. Please note: someone could possibly do this on their own without a CPA, but I personally get anxiety with tax forms - I don't want to piss off a bored/vengeful IRS employee with a mistake on my taxes!

No need to apologize, just please pay it forward to other vets when your process is done!
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SeabeesRock
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Joined: 22 Oct 2017, 09:32

04 Nov 2017, 14:45 #72

candymanfb wrote:
ldbac365 wrote:
I was wondering, do you apply for the insolvency before, during, or after you do your taxes? 
It is during tax season.

I provided documents related to my student loan insolvency to our CPA - with all other tax records for the year. He plugged the information into the year's taxes - in the appropriate section!

My student Loan forgiveness occurred in May and I then provided everything to our accountant in Feb of the next year. I would recommend having documents to back up your debts and assets - your accountant wouldn't need it, just for your personal records (credit card statement are sometimes hard to get after 12 months).

In California, our CPA charges us $300-400 yearly for our taxes, which is deductible for the following year's taxes. Initially, I needed an accountant to handle a large transaction that was taxable - I knew my accountant socially before he got his degree/CPA and he was able to give me an estimate with no obligation in July of what I would owe the IRS during the next tax season. His communication style matched well with mine, he is knowledgeable with a CPA designation, and I knew him before paying him to do taxes (I could find him if he effed up). Call around and talk to several accountants, and go with one that can confirm something you already know (i.e. Property Tax exception, VA disability not being taxable, ...) and explains it well to you! I say this because - it is important to feel comfortable with someone that has access to your a lot of your personal info.

Good Luck!
Which lawyer did you use? Could you send his information? I am in California as well.


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algomaspur
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Joined: 10 Jan 2015, 18:12

04 Nov 2017, 17:22 #73

Anonymous wrote:
blackdogbarks wrote:
I don't get it, either. You have debts and you're working and getting compensated. But you don't want to pay your obligations?
Interesting logic as the obligation ended when I was approved. I did nothing illegal or unethical. I read the regulation, filled out the application and submitted it with my VA letter showing my 100% P&T. I am a bit perplexed as I was sharing information about a potienal and often overlooked benefit but then chastised for being approved. Based on this flawed logic maybe I should continue to pay my property tax, not apply for my national park pass or lifetime fishing license either because I can afford to pay for them as well? I should also pass on applying for free college based on my combat related disabilities for my children or chapter 35 benefits for them as well because I can afford to pay for it myself. Maybe I should just tell them I don't need my compensation either because I am not obligated to take that and it should go to someone more deserving.
Cause thats the issue if u dont fit in there box they chatice you its annoying i agree

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