Disabled student-loan borrowers are eligible for debt relief. They're not getting it.

By Jillian Berman

Changes have made the Total and Permanent Disability discharge process a 'byzantine system'

Nicole Coe had always planned to go to college, find a job in her desired field, make a career out of it - and work to repay her student loans.

But then one day a few years ago, that path became less predictable. She was suddenly hit with intense pain and fatigue and ultimately diagnosed with lupus, a chronic autoimmune disease, as well as two other autoimmune diseases. At age 39, Coe now takes medication and gets monthly infusions to manage her symptoms. But the disease impacts her ability to work steadily.

"I go to the ER a lot," Coe said. "I'm in a lot of pain, always. I'm always fatigued. It's one that you can't get out of bed, you can't even really go to the restroom if you wanted to."

So last year, Coe reached out to the Legal Aid Foundation of Los Angeles to try to get her $68,000 in student loans canceled. Federal student-loan borrowers can have their loans wiped out through a program called Total and Permanent Disability discharge, or TPD, if they have a severe disability that's lasted for at least five years or can result in death. One of the ways borrowers prove they qualify is by having their healthcare provider sign a form.

Coe's attorney helped her submit the application in November 2024. The servicer handling the program acknowledged receiving Coe's paperwork. But then Coe and her attorney waited for months without any update on the status of her application. Finally, in the summer, a staffer at the Legal Aid Foundation called the U.S. Education Department and was told over the phone that Coe would have to resubmit her application because the form with her doctor's signature was more than 90 days old.

Now, Coe has to go through the process of getting her doctors' sign-off again, even though her application was in the hands of the government and its contractors for months. "It didn't have to happen this way at all, we've been in the queue for a long time," she said.

It's hard to know how many people are in Coe's position, but lawyers across the country who work with student-loan borrowers on the disability-discharge process are reporting stalled TPD applications, poor communication and demands that borrowers resubmit their paperwork, even when they've been in the queue for months.

The challenges come after the Education Department introduced changes in early 2025 to the system for processing TPD applications. While these changes predate the Trump administration, advocates say the severely diminished staff at the Education Department has exacerbated borrowers' and lawyers' challenges, because there's no one helpful or knowledgeable about the program they can turn to in the government to escalate their complaints.

Severely disabled student-loan borrowers have historically struggled to access relief. In some cases, they may not even know they are eligible. In others, they apply, but are met by paperwork challenges.

"I would describe them as the same type of administrative burdens that are on every government program, period," said Bradley Custer, who handled complaints from borrowers trying to access TPD when he worked at the Education Department's Office of Federal Student Aid. "But this population literally, by definition, is going to have a harder time with that process."

In the past few years, politicians on both sides of the aisle have recognized the challenges that borrowers with disabilities face in getting their debt cancelled. They made some progress in improving the process by automating it in certain cases, particularly for borrowers who are receiving Social Security disability benefits or disability benefits through the Department of Veterans Affairs. The obstacles to relief that borrowers have experienced in recent months mark a new setback for a group that is particularly vulnerable to the consequences of administrative hurdles.

Behind-the-scenes changes creating obstacles for borrowers

For disabled student-loan borrowers seeking debt relief, the recent challenges start with changes the Education Department implemented in early 2025 to the process they must navigate - including moving responsibility for the program away from one contractor that had handled it for years. Instead, different contractors hired by the government are now responsible for the program.

The change has created issues around the transfer of borrowers' records, according to a recent letter from the National Consumer Law Center, an organization that does advocacy and litigation on behalf of low-income consumers, as well as a backlog of TPD applications following a pause in processing that ended in March 2025, leaving borrowers in limbo about their status. It has also meant that people who have less experience with the program are being tasked with responding to borrowers' TPD applications and inquiries. What's more, the government is asking a population who has accessibility challenges to collect forms and chase around providers multiple times in order to get the relief they're entitled to.

"I'm seeing tons and tons of emails about this - it's a huge problem. I don't know what is going on," said Robyn Smith, a senior attorney at the Legal Aid Foundation of Los Angeles who is working with Coe. "We're dealing with people that have limited capacity. To do this to them is not only difficult for them to comply with, it also creates additional anxiety and health issues."

She described one client as so concerned about the process that he is constantly calling his attorneys and the Education Department, to no avail. "He is completely stressed out and it's not helping his condition."

Alpha Taylor, a staff attorney at NCLC, recently wrote to the Education Department outlining the challenges borrowers and attorneys are facing with the program, asking the agency to "take immediate action to address escalating problems with" Total and Permanent Disability discharge.

The Education Department did not respond to a request for comment on the challenges borrowers are facing.

Adam Minsky, a Boston-based lawyer who works with student-loan borrowers, called the process "a mess in every way."

"It seems to be a comically byzantine system," he said. He sent forms through mail and fax to the government's contractors, who said they didn't receive them. Minsky said he has an active case where he submitted a form and the government's contractor said it was submitted too late, even though he was able to prove that it was received in the allowable time frame.

'We're dealing with people that have limited capacity. To do this to them is not only difficult for them to comply with, it also creates additional anxiety and health issues.' Robyn Smith, senior attorney, Legal Aid Foundation of Los Angeles

Servicers are required to place borrowers in a forbearance while their TPD application is processed - but Smith said she's had to ask for this provision for her clients, which is supposed to be automatic. In some cases, the new contractors handling TPD for the Education Department are telling borrowers to ask their servicers for the forbearance, according to the NCLC's letter, and borrowers and their advocates are struggling to get through to loan servicers by phone.

Call-center staffers hired by the government and its contractors to manage the program also aren't honoring representative forms that allow lawyers to get information about their clients' loans on their behalf, Minsky said.

"I've had people hang up on me as a designated representative," he said. Minsky added that in some cases, call-center representatives seem to have no idea what the Total and Permanent Disability discharge program even is.

A 'disastrous' move

For years, Nelnet, one of the government's student-loan servicers, was responsible for processing TPD applications. While borrowers and advocates sometimes had complaints, overall attorneys say the application process run by Nelnet went smoothly and they could get answers to questions when they arose.

"That was the one program that administratively we loved," said Carolina Rodriguez, the director of the Education Debt Consumer Assistance Program, which works with borrowers in New York state.

The government's decision to transfer responsibility for TPD away from Nelnet was part of a broader plan to bring more student-loan functions under the umbrella of the Education Department's Office of Federal Student Aid. Borrowers now apply through the government's financial-aid website, StudentAid.gov, and when they call and ask questions about the program, they're calling an Education Department-branded call center. In reality, contractors hired by the government are overseeing the process of tracking and evaluating claims and staffing the call center.

"The move to FSA has been disastrous," said Rodriguez, whose organization hasn't had an application processed successfully since the system changed. "You have clients just confused," she noted, and asking questions like, "What does your response mean? What am I doing wrong?"

The new contractors hired to handle the TPD program are struggling to work through a backlog of applications that accumulated when the government paused the program in early 2025 while implementing the transition to the new platform, according to the NCLC's letter. In many cases, they haven't updated borrowers about their status, the letter said.

Since some documents haven't been transferred successfully from Nelnet to the new contractors handling TPD, the companies processing the relief now don't have access to medical forms submitted months ago - even though they can see that Nelnet received the forms, according to the NCLC letter. New contractors are asking borrowers to resubmit these medical forms, which can often be logistically challenging and costly to secure.

"I haven't heard from anyone that has been approved since the system was transitioned," Minsky said.

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09-18-25 1248ET