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Total and Permanent Disability Claim Issues Resolved

Representatives of the Federal Family Education Loan Program and the U.S. Department of Education (ED) recently resolved several issues involving the process of assigning loans to the Conditional Disability Discharge Unit for the conditional discharge process. The resolution of two of the issues affects how a lender or servicer determines if the Loan Discharge Application: Total and Permanent Disability form is acceptable for filing claims with the Louisiana Office of Student Financial Assistance.

To help ensure assignment acceptance by the ED for the conditional disability discharge process, lenders and servicers should implement the following changes, effective immediately, for any claim filed due to a borrower’s total and permanent disability:

· Any change or alteration to field 3.b (the date the borrower became unable to work and earn money) must be accompanied by documentation from the physician explaining the change or alteration.
· Changes to Section 1 (Borrower Identification) do not need to be initialed or explained.
· Any changes or alterations, other than those in Section 1 or field 3.b., must be initialed by the physician in close proximity to the item being changed.

For additional information, contact Gwen Johnson with the Louisiana Office of Student Financial Assistance by phone at (225) 922-1072 or by e-mail at gjohnson@osfa.state.la.us.