NELNET and TPD student loan discharge

[Anonymous]

There have been quite a few questions in relation to what happens:  on your credit report after the loans have been approved for discharge but you are still in the three year monitoring period.  I am confused myself about this and the sequence of events.  Could anyone that has been successful with the TPD and NELNET explain the process one more time.  I have been approved for the TPD due to permanent disability and want to know-- how long does the process take for the credit bureaus to get the updated information?  Also, if the loans have shown as closed and in collection status-- will that information stay on the credit file under the comments section-- or will the status change to "PAID AS AGREED."  Thank you for your feedback.  Heather

[Tazman81]

Hi Heather:

Welcome to the forums.  Unfortunately I do not have much experience with the TPD process.  I was trying to do some reading up on it through the below link which you may find helpful.

https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/disability-discharge#approval

Have you already been approved for a TPD discharge?  Was the date of your TPD prior to them sending your student loans to collections?  If you were current prior to the date of your TPD, then I think you may have a good chance of having the bad history reversed and removed from your credit reports.  This of course is only my opinion at the time based on what it sounds like is done during this process.  For example, part of the process requires the loan servicing provider to return any payments that you've made since the TPD date, so I think that we could losely interpret that in your favor if your account was current prior to TPD.

Otherwise, I think what would likely happen is any negative history after the TPD date can be removed.  The history prior to the TPD date will probably remain.  Please let us know what else you find out, as I'm interested to better understand this process as well so that we can help others in the future.

[Anonymous]

Thank you. I will keep you posted on this process.
Best,
Heather

[Anonymous]

How long did it take for your status to get approved? I'm in that process now and it has been close to 3 weeks.

[Anonymous]

About 30 days.

[Anonymous]

I'm so anxious since my mortgage approval depends on this being approved

[Anonymous]

I am wondering also what were the results of your question? I am wondering how long it will take for the credit bureau to recieve updated information that the loans have been discharged. Is the credit bureau notified immediately or after the 3 year monitoring? All of my loans are paid as agreed. Will it show as paid in full, $0 balance as someone advised me or will it show something else. 

[Anonymous]

I have went thru the process. When you apply it takes about 30 days for them to see if you qualify. For me I’m on disability and it’s expected to last longer than five years. I make under the two person amount to qualify. If you qualify they will send a letter after a month stated it’s been excepted. Then they take over your loans. Have your previous loans deleted. And they put the loans in Nelnet/dept of education name and bring everything current. You enter a 3 year period where they check your income and if you still meet the guidelines. Every year they send info checking your continued eligibility. After three years it becomes final and paid in full with no reversal. That’s all there is to it. Apply, approved, three year check in period, final discharged. One other caveat is you may get a 1099 of the forgiven amount to file with your taxes the first year it’s discharged. And unless you meet insolvency requirements you pay taxes on the discharged amount. Any questions just let me know via email on here.

[Anonymous]

Thanks for your response. How quickly is the credit bureau updates that the loans are balance of $0 Paid in Full? My loans were current before I applied for the discharge and status is showing as 3 year post monitoring period at this time.

[Anonymous]

The new Nelnet account shows up within the next 30 day update on the 3 credit beareaus. Sometimes can take up to 90 days for the old accounts to disappear.  With mine 30 to 60 days.