The Department of Education (DOE) announced it would eliminate the outstanding loans of over 32,000 borrowers with significant, permanent disabilities. It will also remove barriers that block future students from qualifying for this relief.
What We Know:
- The DOE’s declaration erases approximately $5.8 million in debt. In addition, NPR writes that it symbolizes a “significant step” toward improving a “troubled debt relief program meant to help borrowers with disabilities.” U.S. Education Secretary Miguel Cardona confirmed this statement when the Education Department revealed its decision, stating it would remove a major barrier for disabled students.
“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,” Cardona said.
- Despite the program’s intention to wipe student loans of those who cannot work due to disabilities, those who qualified for the program needed to apply for relief. Under the new plan, students will obtain automatic relief when identified through a data match with the Social Security Administration. The next match will take place in September.
- In addition, the Department of Education said it would propose to eliminate the three-year income monitoring period. Officials will stop sending requests to borrowers for income information during the aforementioned years. Furthermore, the DOE will consider removing it entirely during the upcoming negotiated rule-making.
- Disabled students and advocates believe this will bring change to the program. Persis Yu, a staff attorney at the National Consumer Law Center, said the vote is “long overdue.” However, Yu hopes the Education Department will review the eligibility criteria to determine when someone holds a disability discharge.
Yu added that Social Security’s match does not identify some qualified borrowers.