Biden's administration will cancel student loans owed to more than 323,000 Americans with severe disabilities. It also plans to simplify the process for obtaining debt relief.
The Department of Education announced Thursday the elimination of more than $5.8 Billion in student loan debt. It also made its debt relief program more accessible for those with disabilities.
In a press release, U.S. Education Secretary Miguel Cardona stated that "Today's actions remove a major hurdle that prevented far too many borrowers who have disabilities from receiving the total or permanent disability discharges to which they are entitled under law,".
Although the United States had an existing loan discharge program for Americans living with disabilities, until Thursday's announcement qualified applicants were subject to a three-year income monitoring period. The Income Monitoring Period was temporarily stopped by the Education Department during the pandemic. It will now be stopped completely by the Social Security Administration, so those permanently disabled will receive debt relief.
NPR reported that only a small percentage of eligible Americans received the debt relief they were entitled to under the Total and Permanent Disability Discharge program. This program was established in 1965. The Government Accountability Office discovered that 98% of the reinstated debt was reinstated by borrowers who didn't submit enough paperwork in 2016. The GAO had previously reported that thousands of Americans were dropped from the program due to failure to provide proof of income. Disability advocates argue that this discourages people from applying.
Instead of putting the burden on people with disabilities to apply, the department will automatically identify eligible Americans using Social Security data. The Social Security Administration will automatically erase student debt if someone is permanently disabled. The September data match will be the next.
Cardona stated that the process would be easy for borrowers. They won't have to apply for it or get bogged down with paperwork.
Persis Yu, a National Consumer Law Center staff attorney, told NPR that the Administration needs to expand the eligibility criteria for the program as some borrowers with disabilities are not being correctly identified by the Social Security Administration.
It is not clear if people who are suffering from long-term COVID-19 effects will be eligible for debt relief. Long-term COVID symptoms can include fatigue, nausea, vomiting, stomach pain, pain in the chest, abdomen, joints and/or muscles, and rapid heart beat that lasts long after an initial infection. President Biden proposed to make long COVID a federal disability so that those with debilitating, lingering effects can receive Social Security benefits. Although some claimants have been granted disability benefits, CNBC reports that most had complications after being placed on ventilators. They are not considered to have long COVID-related disabilities.
It is still a long shot to completely cancel student debt. Cardona stated Thursday that discussions regarding mass debt cancellation for all Americans are "still ongoing." The Department of Education continues to work on "improved loan relief" for borrowers who are more vulnerable, such as those with severe disabilities. Cardona stated previously that student loan debt support would be a priority.
