Sallie Mae Launches Initiative to Educate Customers, Medical Professionals on Loan Cancellation Process for the Disabled

RESTON, Va., Dec. 16 /PRNewswire/ -- Sallie Mae today announced the creation of a new customer service initiative to better help borrowers with disabilities or debilitating illnesses -- and their physicians -- fully comply with federal regulations pertaining to the cancellation of loans issued through the Federal Family Education Loan Program (FFELP). These resources will assist borrowers as they navigate the FFELP loan discharge process and complete the forms required by the U.S. Department of Education in an efficient and effective manner.

"While disability discharge affects a very small number of individuals, it affects them profoundly. Our goal is to make this process as easy and hassle- free as possible for those who need this federal student loan benefit," said June McCormack, executive vice president of servicing, information technology, and sales marketing. "This is just one example of how every day we try to be flexible and responsive to all of our customers' needs."

By law, certain qualified borrowers who become totally and permanently disabled or whose disabilities worsen over time are permitted cancellation or "discharge" of the borrower's (and if applicable, any endorser's) obligation to repay the remaining loan balance. Unfortunately, filling out the paperwork required by the federal government to participate in the disability discharge process can be a complicated and burdensome task, particularly for individuals who are struggling with severe health problems. Inaccuracy or incompletion are the major causes of unnecessary -- and avoidable -- delays and rejections.

As part of this disability discharge educational campaign, Sallie Mae has created a disability discharge Web site for borrowers and physicians, http://www.salliemae.com/manage/disability.html. This free tool is designed to walk borrowers step-by-step through the application process, and help physicians complete the required documents in an accurate and timely manner. The Web page provides users with answers to the most commonly asked questions regarding the federal disability discharge process. Borrowers and doctors can go to the page to download the Department's official Loan Discharge Application for Total and Permanent Disability, and to view a sample form that has been completed properly.

Sallie Mae has also updated and clarified the correspondence it issues to borrowers who contact the company for guidance on this issue, and the company's customer service staff has received in-depth training on the federal disability discharge process and on the best way to counsel borrowers who call with questions.

"The financial aid office sometimes receives questions from student borrowers who believe they may qualify for loan discharge due to disability, and guiding them through that process can be confusing," said Linda F. Bell, director of financial aid at Lehigh University in Bethlehem, Pa. "I'm pleased Sallie Mae has developed this free resource for disabled borrowers that provides guidance as well as the appropriate forms."

Potential beneficiaries of a federal disability discharge should be aware that the Department of Education has its own rules and applications for disability benefits; meeting the eligibility criteria for Social Security benefits does not automatically qualify a borrower for discharge of his or her student loan. To be eligible for this discharge, the borrower must provide certification of his or her total and permanent disability (defined as "a condition that keeps you from working or earning money because of an injury or illness that is expected to continue indefinitely or result in death") from a doctor of medicine or osteopathy licensed to practice in the U.S. One major reason that applications for discharge are rejected is that doctors fail to fully and accurately complete the application. Therefore, the Web site also provides a detailed instructional checklist of issues for physicians to take into consideration when filling out the Department's official loan discharge application. In particular, it is important that a doctor state not only the patient's diagnosis, but also provide a detailed explanation of how the illness prevents the patient from working.

Borrowers should note that to be eligible for discharge under federal regulation, his or her condition must not have existed at the time the loan was made, unless the condition has substantially deteriorated so that he or she is now totally and permanently disabled.

Borrowers in need of additional assistance are encouraged to contact Sallie Mae directly at 888/272-5543, visit the company's disability discharge Web site at http://www.salliemae.com/manage/disability.html, or log on to the Manage Your Loans section of http://www.salliemae.com/ to review loan status and email questions to Sallie Mae.

SLM Corporation (NYSE: SLM) , commonly known as Sallie Mae, is the nation's No. 1 paying-for-college company, managing nearly $121 billion in student loans for 8 million borrowers. Sallie Mae was originally created in 1972 as a government-sponsored entity (GSE) and terminated all ties to the federal government in 2004. The company remains the country's largest originator of federally insured student loans. Through its specialized subsidiaries and divisions, Sallie Mae also provides debt management services as well as business and technical products to a range of business clients, including colleges, universities and loan guarantors. More information is available at http://www.salliemae.com/. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.

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