Wednesday, October 27, 2021
HomePolicyUS to Automatically Wipe Out Student Debts of Those With Disabilities

US to Automatically Wipe Out Student Debts of Those With Disabilities

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The Biden administration has announced that it will now automatically erase student loan debts of more than 320,000 Americans who have severe and permanent disabilities.

According to Education Secretary Miguel Cardona, eligible borrowers will no longer need to apply for the relief as they will already be identified through a data match with the Social Security Administration. Based on the data collected in June, there are over 323,000 people whose student loans totaling $5.8 billion will be wiped out.

The change in policy comes in response to sentiments of borrowers and advocates about the relief having “overly burdensome rules.” Cardona assured that the department hears those voices and that it is committed to reducing the burden of disabled people who are struggling to repay debts.

“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,” the secretary explained in a press release.

In addition to automatically cancelling student debts, the department said it will work on eliminating the “three-year income monitoring period” policy, in which qualified people need to prove that they are earning little pay. This policy has reportedly caused many former students to see their loans reinstated for failing to submit necessary documents.

‘Long Overdue’

Several advocates commended the Biden administration for finally implementing a change in student loan debts policy. Student Defense Vice President and Chief Counsel Dan Zibel told Forbes that the recent development is “life-altering” for hundreds of thousands of student loan borrowers with disabilities.

He also revealed that many advocates have been calling on the government to “eliminate unnecessary red tape that has kept too many people caught in a cycle of debt.”

Meanwhile, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project, Persis Yu, admitted that he is excited to see the education department lessen the burden of disabled adults who still have student debts.

Although she considered the action long overdue, Yu believes that the latest announcement will make a huge difference in the lives of borrowers trapped in unnecessary student debt.

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