Student debt
Filed Under: Politics

US grants student debt forgiveness to those with severe disabilities

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People with total and permanent disabilities are about to get a break when it comes to student loans.

The U.S. Department of Education announced Thursday more than 323,000 people who have what is known as a “total and permanent disability” will have their student loan debt wiped out.

“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. Secretary of Education Miguel Cardona said in a press release. “We’ve heard loud and clear from borrowers with disabilities and advocates about the need for this change and we are excited to follow through on it.”

The DOE said the change will take effect in September. It’s expected to forgive more than $5.8 billion in student debt by the end of the year.

This is not the only step the DOE took to help those with disabilities Thursday. The department said it will indefinitely extend a policy change first announced in March which stops asking borrowers with disabilities how much they make. Those borrowers could have their loans reinstated if they failed to respond. The new change was only supposed to last until the end of the national emergency due to the pandemic.

Tens of thousands of people have been dropped from the program because they failed to submit proof of their earnings. Back in 2016, the U.S. Government Accountability Office reported in 98 percent of cases in which loans were reinstated, it was because borrowers did not submit paperwork, not because their earnings were too high. Critics say complex rules deter some from applying.

Part of those complex rules include a three-year monitoring period borrowers have to go through in order to prove they’re not making a lot of money. The department said it will look to eliminate the requirement starting in October.

Advocates celebrated the changes as a victory. The president of the National Student Legal Defense Network called them a “life-changing” step.

“This is a huge moment for hundreds of thousands of borrowers with disabilities who can now move on with their lives and won’t be trapped in a cycle of debt,” Aaron Ament said.

People with total and permanent disabilities are about to get a break when it comes to student loans.

The U.S. Department of Education announced Thursday more than 323,000 people who have what is known as a “total and permanent disability” will have their student loan debt wiped out.

“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. Secretary of Education Miguel Cardona said in a press release. “We’ve heard loud and clear from borrowers with disabilities and advocates about the need for this change and we are excited to follow through on it.”

The DOE said the change will take effect in September. It’s expected to forgive more than $5.8 billion in student debt by the end of the year.

This is not the only step the DOE took to help those with disabilities Thursday. The department said it will indefinitely extend a policy change first announced in March which stops asking borrowers with disabilities how much they make. Those borrowers could have their loans reinstated if they failed to respond. The new change was only supposed to last until the end of the national emergency due to the pandemic.

Tens of thousands of people have been dropped from the program because they failed to submit proof of their earnings. Back in 2016, the U.S. Government Accountability Office reported in 98 percent of cases in which loans were reinstated, it was because borrowers did not submit paperwork, not because their earnings were too high. Critics say complex rules deter some from applying.

Part of those complex rules include a three-year monitoring period borrowers have to go through in order to prove they’re not making a lot of money. The department said it will look to eliminate the requirement starting in October.

Advocates celebrated the changes as a victory. The president of the National Student Legal Defense Network called them a “life-changing” step.

“This is a huge moment for hundreds of thousands of borrowers with disabilities who can now move on with their lives and won’t be trapped in a cycle of debt,” Aaron Ament said.

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