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Education Department to Erase Loans for Borrowers with Disabilities

On Thursday, August 19, 2021, the U.S. Education Department confirmed that the relief provided by the federal Total and Permanent Disability Discharge program will become automatic for those who are eligible. Instead of applying for the relief, qualifying individuals will now be identified by the Social Security Administration. This action removes a major barrier that has prevented far too many people in this community from receiving the discharges they are entitled to under the law.

The Total and Permanent Disability Discharge program

The program was created in order to eliminate the student loan debt of Americans who can no longer work due to a significant disability. However, until this latest announcement by the Education Department, many borrowers were unaware that they were eligible for the program and did not apply. Over the past two years, only a few borrowers availed themselves of the relief for which they qualified and were entitled to, as reported by NPR.

A much-awaited change

With relief being automatically given, the Education Department expects that more than 323,000 people will be able to collect a total of $5.8 billion. Additionally, the Department is working towards eliminating the three-year income monitoring period, which has resulted in many people having their loans reinstated unfairly

The response

Persis Yu, a staff attorney at the National Consumer Law Center, views this change as “a huge deal” that’s “very long overdue.”

Borrowers and advocates see this move as a first step toward fixing the discharge program. They hope that the Education Department will ensure that all borrowers with disabilities who merit loan changes are identified by the Social Security Administration’s system to receive the amounts to which they are entitled.

Further Reading:

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