Do you know someone who may be eligible for a student loan discharge based on total and permanent disability (TPD)?

Many of our clients are eligible for student loan discharges based on total and permanent disability (TPD). Currently, the student loan debt being discharged is not taxable. If you or a client qualify for a TPD discharge based on documentation from the Social Security Administration or a physician’s certification, the date you are considered to have received the discharge for tax purposes is the completion date of your three-year post-discharge monitoring period. However, be aware! The tax provision that states these types of student loan discharges are not taxable is scheduled to expire at the end of 2025. Borrowers subject to the three-year monitoring period who have their initial discharge approved after December 31, 2022 could be subject to the tax unless the provision is extended or made permanent. We will keep you updated on whether this provision is extended or made permanent.