More than 323 thousand borrowers with disabilities will receive automatic student loan forgiveness



On Thursday, the Biden administration announced it will provide more than 323,000 full and permanent disability (TPD) borrowers for $ 5.8 billion in automatic federal student loan forgiveness.

The Department of Education announced that it will no longer force individuals classified by the Social Security Administration (SSA) as completely and permanently disabled to apply for their federal student loans. Instead, TPD borrowers will be able to receive automatic forgiveness thanks to a new rule that allows student loan officers to match client data to SSA.

“Today’s measures remove a major barrier that has prevented too many borrowers with disabilities from receiving the full and permanent disability benefits to which they are entitled under the law,” the Minister of Education said. Miguel CardonaMiguel CardonaOvernight Medical Assistance: Revaccinations to Begin in the United States on September 20 | Biden Will Demand COVID-19 Vaccination For All Nursing Home Staff | Democrats Support COVID Mandates in Gubernatorial Election Biden calls on governors to oppose school mask demands Teacher unions split over approval of vaccination requirements MORE said in a statement.

Federal law allows student borrowers with TPDs to claim forgiveness for their federal student loans on the grounds that they will not be able to earn enough to repay them. Those with TPD may be eligible for Social Security Disability Income (SSDI) or Supplemental Insurance Income (SSI), which means the SSA will likely have the information it needs to determine if they are eligible for student loan forgiveness.

The Department of Education previously set up a similar automatic loan forgiveness regime with the Department of Veterans Affairs, but Thursday’s new rule will allow non-TPD veterans to avoid the application process.

“We have heard clearly and clearly from borrowers with disabilities and advocates about the need for this change, and we are delighted to implement it. This change reduces red tape to make it as easy as possible for borrowers who need support. “

Cardona said the change will take effect next month during the upcoming quarterly data alignment with SSA.

The Department is also indefinitely suspending the process of sending automatic requests for income information to recipients of TPD loan payments. If a borrower with TPD does not respond to this request, the Department of Education may order them to repay their loans.

The department will also propose canceling the three-year earnings survey after the TPD loan is disbursed.

Cardona’s announcement is a move by the Biden administration to pay off the student debt of the most vulnerable borrowers, including those who are being defrauded by commercial colleges and borrowers who were eligible for a public service loan forgiveness but did not receive it.

But Biden also faces strong pressure from liberal legislators and activists to write off up to $ 50,000 in federal student loans for every borrower regardless of income level or economic status.

Proponents of broad-based student loan forgiveness insist that Biden has the power to pay off most of the $ 1.6 trillion federal debt owed to an estimated 43 million borrowers.

While progressive proponents have promoted an ambitious pre-pandemic student loan write-off as a means of narrowing the racial wealth gap and inequality, they say the cause is even more pressing in the wake of the economic crisis.

Biden explicitly ruled out a forgiveness of up to $ 50,000 per borrower, but suggested that it was open to a unilateral order to forgive a loan with a lower amount and restrictions on income. The White House said the president also expects the Justice Department to review his legal mandate.


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