U.S. waives student loan payments for disabled
The Biden administration moved Thursday to grant 323,000 people who are severely disabled automatic federal student loan forgiveness to the tune of $5.8 billion, setting the stage for reforms to a process that is widely criticized as cumbersome and onerous.
“The Department of Education is evolving practices to make sure that we’re keeping the borrowers first and that we’re providing relief without having them jump through hoops,” Education Secretary Miguel Cardona said on a call with reporters Thursday. “I’ve heard from borrowers over the last six months that the processes are too difficult, so we’re simplifying it.”
By law, anyone who is declared by a physician, the Social Security Administration or Department of Veterans Affairs to be totally and permanently disabled is eligible to have their federal student loans discharged. The benefit has never been widely publicized, so few have taken advantage. And when they do, many are met with tedious paperwork and requirements.
There is a three-year monitoring period in which borrowers must submit annual documentation verifying their income does not exceed the poverty line. The requirement routinely trips up people who wind up having their loans reinstated. To ease the burden, the Biden administration in March waived the paperwork requirement during the coronavirus pandemic, retroactive to March 13, 2020, when President Donald Trump declared a national emergency.
On Thursday, Mr. Cardona said the Education Department will indefinitely extend the income waiver. The department will also pursue the elimination of the requirement altogether through the negotiated rulemaking process in October. The federal agency is proposing new rules to provide automatic disability discharges for anyone identified as eligible through data matching initiatives with Veterans Affairs and the Social Security Administration.
In 2016, the Education Department partnered with the two other agencies to identify eligible borrowers. While the department removed the application requirement in 2019 for veterans, it did not do the same for people identified through the SSA match. Only half of the people identified through the SSA match have received the discharge, according to the Education Department.