Starting today, any individual already declared disabled by the Social Security Administration will be automatically entered in to the U.S. Education Department's process of total federal student debt forgiveness for disabled individuals, without further proof or monitoring required. The Education Department says it expects all disabled individuals with federal student debt to have it erased by the end of this year. Today's move is expected to affect 300,000 disabled borrowers with $58 million in debt.
The U.S. Education Department, together with the U.S. Justice Department, is reviewing the legality of canceling federal student loan debt en masse. Advocates say it would jumpstart a U.S. economy currently being held down by a generation of students overburdened by student debt at predatory interest rates. Opponents worry about the lending institutions and the legality of canceling their loan agreements.
As the issue unfolds, the Education Department is focusing on debt relief for specific classes of borrowers. Today's announcement affects federal loan borrowers who are disabled.
Previously, disabled borrowers applying for federal student loan debt forgiveness had a cumbersome process to follow within the Total and Permanent Disability (TPD) program, to establish their disabled status. It included proof of income and three years of income monitoring. Those requirements are halted effective immediately.
“This is a life-altering announcement for hundreds of thousands of student loan borrowers with disabilities,” said Student Defense Vice President and Chief Counsel Dan Zibel