The Department of Education (ED) is paying off $ 5.8 billion in student debt from more than 323,000 federal student loan borrowers who are permanently and permanently disabled. defenders who called the Biden administration to make a move.
Education Minister Miguel Cardona told reporters that the move was “aligned with our strategies from day one to put our borrowers at the center of the conversation,” adding that ED is looking to make more improvements to this targeted loan assistance program, such as Government Service Loan Forgiveness and with regard to the huge backlog borrower protection applications for debt relief.
Alex Elson, senior advisor to the National Student Advocacy Network, which was part of a group, pushed ED to forgive loans, told Yahoo Finance that the latest event “has changed the lives of hundreds of thousands of people, and this is exactly what we have been calling the department for for a long time.”
Actions affecting TPD borrowers result in an estimated $ 8.7 billion in student loan write-offs accepted by the Biden administration. Federal government action in the face of a pandemic will lead to approximately $ 100 billion according to the Department of Education (ED) and expert analysis.
The surge in student debt relief has become a vital financial line for an estimated 45 million student loan borrowers with over $ 1.7 trillion in federal backed debt outstanding.
The “life-changing” move of the US government
Federal loan borrowers with TPD can usually apply for debt relief through a process set up by Congress in 1965… According to the program established by the Obama administration, the Social Security Administration (SSA) determines the eligibility of borrowers to receive a loan.
If an eligible borrower agrees, they will be subject to three-year monitoring period.
Since the inception of the SSA partnership, 818,074 borrowers have been identified as eligible for TPD payments, and 300,405 borrowers have received $ 8.8 billion. However, for another 517,669 people, the process stalled.
The new ED regulation will apply to those borrowers identified as eligible based on a comparison of existing data with the SSA. In addition, the process will also be automatic – borrowers will not need to fill out an application to receive assistance.
“This process will be smooth for borrowers without having to apply for it or get bogged down in paperwork,” Cardona said. “We recognize that these borrowers are eligible for assistance and we are committed to providing them with $ 5.8 billion in assistance.”
ED also noted that the agency will also “indefinitely renew the policy announced in March to stop asking these borrowers to provide information on their income.” ED expects affected borrowers to receive repayment approval notices “within weeks of the match” in September and “expects all payments to be made by the end of the year”.
The discrepancy persists: Previously released federal data said that as of May 2021, more than 517,000 people did not receive the benefit they are legally entitled to, while Thursday’s announcement only extended to 323,000 of those borrowers.
“As far as we understand, [517,000] in fact, these are numbers accumulated over several quarterly matches played over several years, – explained a senior adviser to ED during the call. – And so as a result. there are borrowers who may have applied, there are those who may have been double counted because they, in fact, appear in several matches. So that 323,000 is our tally of who we think will get fired, based on the last quarterly match we played in June, but who haven’t applied yet, so these will be the most comprehensive figures to date. ”
Aarti is a correspondent for Yahoo Finance. She can be contacted at firstname.lastname@example.org. Follow her on Twitter @aarthiswami…