1 May 9 , 2013

U.S. Department of Education’s R esponses to N ational Consumer Law Center ’s 60

- Day

C omments o n Discharge Application: Total and Permanent Disability

, Total and Permanent Disability: Applicant Representative Designation , and Total and Permanent Disability: Post

Discharge Monitoring (78 FR . 14083)

Discharge Application: Total and Permanent Disability

1. Use of Social Security Administrative Notice for TPD Determination

We applaud the De partment’s decision to use SSA notices for TPD Determinations. However, the current language on the form regarding use of SSA notices is unclear. In several places, the form states that SSA determination will be used if: “the Notice of Award states that your next scheduled disability review will be within 5 to 7 yea r s...” However, few borrowers apply for discharge of their student loans immediately after receiving a SSA determination. In our experience, many borrowers receive SSI or SSDI payments for several years before applying for a TPD discharge on their student loa ns. Therefore, a borrower’s next review may be in less than 5 years even though they are in the medical improvement not expected category and have a continuing disability review period of 5 to 7 years or more.

To that end, we recommend that this language b e amended to read:

“your disability review period is 5 to 7 years or more from the date of your last disability
determination... ”

R esponse:
We have added the recommended language with one minor change:

“ ...5 to 7 years or more from the date of your last SSA disability determination...”

Additionally, the application currently r equires that borrowers submit a Notice of Award to demonstrate their disability review period. However, in our experience, SSA Notices of Awards do not consistently provide recipients wit h the disability review period. Therefore, we urge the Department to explore other possible documents for borrowers to provide to the Department to prove their disability review period and to list those documents on the application form.

Finally, it is cri tical that borrowers get information about how to determine if they are in the eligible SSA category. As already mentioned, the Notice of Award often does not state the disability review period, therefore many recipients do not know when their next medical review will take place. At a minimum, the “Read This First” section of the application should include information about how borrowers can get this information.

Response:

We have added language to the form explaining that if the SSA notice of award does not clearly show the timeframe for the next scheduled disability review, applicants may con tact the SSA office that issued the award and request a Benefits Planning Query (BPQY) that will include the necessary information an d that may be submitted as evidence that the applicant meets the required standard to qualify for discharge based on SSA
documentation.

2. “Read This First”

In order to streamline this section, we recommend that the form combine the fourth and2 seventh bull ets. Their content is substantively similar and therefore redundant as two
separate parts.

Response:

We agree and have combined these two bullets.

Also, the “Read This First” section must contain some mention of the post

- discharge monitoring

process. Although the application does include information regarding this process on page 6, this is an important process that borrowers should be aware of and may overlook if not placed
in the “ Read This First” section. To that end, we recommend adding the followi ng language:

• “If you are granted a discharge, the Department will monitor your status for a 3

- year post

- discharge monitoring period. Your loans may be reinstated if you no longer meet the requirements listed on page 6.”

Response:

We have added the followi ng new bullet to the “Read This First” Section:

“If you are granted a discharge based on requirement #2 or requirement #3, we will monitor your status during a 3

- year post

- discharge monitoring period. Your discharged loans or TEACH Grant service obligation may be reinstated if you do not meet certain requirements during this period, as explained in Section 6 of this
form. ”

3. Page 2 of Application Form

This is the only page that the borrower actually needs to complete. However, it is confusing and
cluttered . We offer the following suggestions to streamline this page.

• Remove Date of Birth from Section 1. This is not required on any other Department forms and takes up unnecessary space.

Response:

The applicant’s date of birth is collected in Section 1 because the Department’s TPD
servicer needs this information to search applicant loan history information in the National Student Loan Data System (NSLDS).

• Section 2 is misnamed, includes too many different concepts, and is disorganized. We offer the following suggestions:

o The very basic instructions (i.e. use dark ink) should be in or above Section 1.

o The address to send the application is already on the first page and is unnecessary.

o Se ction 2 should focus on VA and SSA information exclusively. We
recommend th at it be changed as follows:

S ECTION 2: VETERAN AND SOCIAL SECURITY APPLICANTS

1. Are you a veteran who has received a determination from the VA that you are unemployable
due to a service

- connected disability?

 Yes

-- Attach documentation of the VA determination and complete Section 3.

 No3 2. Have you received an SSA notice of award for SSDI or SSI benefits stating that your next scheduled disability review will be within 5 to 7 years?

 Yes

-- Attach a copy of the SSA notice of award and complete Section 3.

 No

If you check “Yes” to Items 1 OR 2 above, complete section 3. You do not need to complete Section 4. All other applicants must have a physician who is a doctor of medicine or osteopathy complete and sign Section 4.

Response:

The placement o f the basic instructions in Section 2 is consistent with the format used on other forms. However, we believe that some of the instructions can be moved to
the “Read This First” section or deleted. Accordingly, the revised Section 2 contains only 3 bulleted instructions (compared with 6 bullets in the previous draft).

We believe it will be helpful to discharge applicants if we repeat in Section 2 the address to which the completed form should be sent, in case the “Read This First” page becomes separated from the rest of the application.

We do not agree with the recommended changes to the two questions in Section 2.
We believe that the “skip logic” used in the Department’s draft pro vides clearer instructions to applicants. We have retained the original text with modifications to incorporate revised language related to acceptable SSA documentation.

• Section 3 could be much easier to read by removing the representative contact and
relat ionship information. This is redundant since it is also on the required representative form. Rather, there should be a simple instruction for representatives to complete the representative
authorization form.

Response:

We agree and have removed the represe ntative contact and relationship information. In the space created by the removal of these data elements we have added instructions for completion of the representative designation form.

4. Process and Definitions

Section 5 and 6 of the form contain very important information for borrowers. However, due to the large volume of information and the nature of completing forms, it is important to arrange these sections in a way so that information is more easily accessible. We offer the following suggestions t o achieve that goal:

• Section 6 (process) should come before section 5 (definitions) because it is more important for
a borrower to read.

Response:

We have retained the current ordering of these sections, as we believe the definitions should be presented before the sections in which the various defined terms are used.

• Within section 6, some sections should be displayed more prominently. Specifically:

o The post

- discharge monitoring and the reinstatement sections need to be more prominent. Because the consequences for failing to do this process are so high, these4 sections should come first and their importance should be highlighted.

Response:

We believe it is important to present the steps in the discharge process in chronological order. Therefore, it would not be appropriate to place the post

discharge monitoring and reinstatement sections first. Note that each step in the discharge process is numbered and has a heading in bold text to make it stand out.

o Separate the discharge process for people who use the SSA proces s from “all other applicants.” Although they are regulated with “other applicants,” their process more closely resembles the VA process. Therefore, its current placement is confusing.

Response:

The SSA process resembles the VA process only in that a physician’s certification is not required in Section 4 of the form. Otherwise, the SSA process is the same as the process for applicants who qualify based on a physician’s certification and therefore

s hould be covered in the “all other applicants” section.

• Remove the notification of intent section. This process is not required and if the borrower has the form, they have likely already done it. Alternatively, frame it so that borrowers know that they can notify the Department of their intent to apply and that if they do, collection efforts will cease and rename it: Ceasing collection while completing application.

Response:

We agree and have deleted this section.

• Section 5 states that all references to “you” throughout this application include the representative. This is problematic for two reasons. First, in some places, this reference does not make logical sense. For exa mple, the first question in Section 2 asks “Are you a veteran...” The representative’s status in this question is irrelevant. Also, the representative is often not in a position to certify the accuracy of information the borrower submits. As attorneys, for example, we are always careful to ask specific questions and advise our clients about providing truthful information, but only our clients know for sure in many cases if the information is true. Only the borrower should be responsible for certifying the ac curacy of information. This is true for information about disability as well as for other information such as address changes and income information for reinstatement purposes. We believe this must be clarified in the5 representative designation form and on the application.

Response:

We do not believe any clarification is needed . If a borrower designates a representative, the representative is acting on the applicant ’s behalf, and that would include making certifications on behalf of the applicant . However, we have deleted the sentence explaining that all references to “you” include the representative. Since the application (and the representative designation form) make it clear that a representative is acting on behalf of the applicant in all matt ers related to the discharge request, we believe the sentence is unnecessary.

Total and Permanent Disability: Applicant Representative Designation

This form indicates that representative designation can be revoked by the representative; however, the form only gives the option for the borrower to revoke the representative designation. Therefore, we recommend that a checkbox be added so that the representative can revoke the designation.

Response:

We do not believe that a separate check box is needed for thi s purpose. The form includes language explaining that th e representative may revoke his or her designation by notifying the Department verbally or in writing.

Also, in some circumstances a borrower will not be able to physically sign the Applicant

Re prese ntative Designation Form. This form should explicitly explain the process for borrowers in this

circumstance.

Response:

Because this is not common, we do not believe it is necessary to add special instructions to the
form. T hese circumstances will be handled on a case

- by

- case basis.

Total and Permanent Disability: Post

- Discharge Monitoring

We offer the following suggestions to make this form more user friendly for borrowers:

• Remove some or all of the definitions section on page 2. Many of the definitions in this part are irrelevant to the borrower completing the form. Borrowers completing this form have already qualified for a TPD discharge and therefore do not require the definitions used for the initial application. Delet ing this section will provide additional room to make the rest of the
form easier to read.

Response:

We agree. The definitions of “Total and permanent disability,” “Substantial gainful activity,” and “Federal Family Education Loan (FFEL) Program” have been removed.

• The directions on where to send the form should be larger, bold, and centered.

Response:

We have made the recommended change.

• Question 1 will likely be challenging for borrowers to complete. Few borrowers will know the required time period and w ill complete this question incorrectly. We recommend that the Department prepopulate the time period requested in Question 1 because it is in a better6 position to determine the relevant time period.

Response:

Although it is not specifically stated on the draft form, these dates will be prepopulated by the Department’s TPD servicer.

• Question 2 is confusing. We recommend changing it as follows:

Do you have income earned from employment during the period described in Item 1? Income from employment includes: (1) wages, tips, or other taxable employee pay, or (2) earnings generated from self

- employment. Do not include untaxed income such as SSI, child support, or federal or state public assistance or other income, such as income from interest or
dividends.

 Yes

– You must provide documentation of all income you receive from employment or self

employment. See Acceptable Documentation below.

 No

Response:

We agree that the revised presentation is clearer and have made the recommended changes,
with minor modifications. Note that we have also retained the original language that followed the “No” check box on the previous draft (“By si gning this form, you are certif ying that you had no earned income from employment for the period described in Item 1. Continue to Section 3.”). We assume that the deletion of this text was unintentional.

• Acceptable Documentation

o Move the “Acceptable Documentation” section to page 2 in the space created by deleting the definitions. This will create more space on page 1 and make it easier to complete.

Response:

We believe it is better to explain what constitutes acceptable documentation immediately below the question that asks whether th e applicant had any earned income from employment, so that the applicant does not have to refer to a separate page for this information.

o This form currently requires that documentation be less than 90 days old. However, these documents must cover a one ye ar period. A borrower may have had earnings in that period that did not fall within the last 90 days. Therefore, we suggest modifying this requirement to reflect this possibility.

Response:

We agree. The entire sentence that included the “no older than 90 days” requirement
has been removed.