The U.S. Education Department recently announced that it would discharge $5.8 billion in student loan debt for some individuals who the agency has deemed to have significant, permanent disabilities in qualifying for the debt relief program meant to assist borrowers who suffer from disabilities.
National Public Radio reported the news and indicated this should be just the beginning of identifying Social Security disability beneficiaries who qualify for discharge of their student loans due to long-term impairments that will prevent the beneficiaries from working.
“Today’s action removes a major barrier that prevented far too many borrowers with disabilities from receiving the total and permanent disability discharges they are entitled to under the law,” U.S. Education Secretary Miguel Cardona was quoted in the story released by NPR.
The debt relief should impact more than 300,000 student loan borrowers who have struggled to maintain debt payments after being identified as being disabled and have an inability to maintain fulltime employment due to impairments.
Unfortunately this is something that should have been happening years ago, but according to reporting by NPR, only a small percentage of eligible borrows who have be deemed disabled within the last few years have been able to get debt relief from the Education Department. There is a federal Total and Permanent disability loan discharge program, which dates back more than 50 years, but many individuals who have been found disabled are unaware of the program according to NPR.
Under the direction of new President Joe Biden, the Education Department is going to work at identifying many more individuals who may qualify for additional debt relief. Below is a portion of the NPR story that identifies how the loan relief program is going to identify eligibility and how it plans to offer more debt relief to disabled individuals in the future.
Now, relief will become automatic for those who are identified through a data match with the Social Security Administration. The next match is in September, and based on those who were identified in June, the department expects more than 323,000 people to receive relief amounting to $5.8 billion.
The department also said it will propose eliminating a significant hurdle for those borrowers who have been approved for loan discharge: a three-year income monitoring period, during which many people have seen their loans reinstated through no fault of their own.
The department said it will permanently stop sending requests to these borrowers for income information during this period — a decision it made temporarily during the pandemic — and will pursue doing away with the monitoring period entirely during upcoming negotiated rule-making.
Borrowers and advocates see this move as a first step toward fixing the discharge program. “This is a huge deal for the hundreds of thousands of borrowers who are entitled to this relief and frankly, it’s very long overdue,” said Persis Yu, a staff attorney at the National Consumer Law Center.
To learn more about the student loan forgiveness program and its requirements click here.
