Student Debt to Be Erased for Many With Severe Disabilities, Low Incomes

FRIDAY, Aug. 20, 2021 (HealthDay News) -- More than $5.8 billion in student loan debt will be erased for over 300,000 Americans who have severe disabilities and low incomes, the Biden administration said Thursday.

"We've heard loud and clear from borrowers with disabilities and advocates about the need for this change and we are excited to follow through on it," Education Secretary Miguel Cardona said in a statement.

The student debt relief program for disabled people has been widely criticized for having complex rules that have resulted in tens of thousands of people being disqualified and having their loans reinstated.

Currently, applicants must submit documentation of their disability and go through a three-year monitoring period to prove they have low incomes, the Associated Press reported.

"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," said U.S. Secretary of Education Miguel Cardona. "This change reduces red tape with the aim of making processes as simple as possible for borrowers who need support."

Advocates welcomed the change.

Aaron Ament, president of the National Student Legal Defense Network, called it a "life-changing" step.

"This is a huge moment for hundreds of thousands of borrowers with disabilities who can now move on with their lives and won't be trapped in a cycle of debt," he told the AP.

As well as now providing automatic debt relief to people whom the Social Security Administration already identifies as permanently disabled, the Education Department will eliminate the three-year monitoring period.

Borrowers will be notified once they have been approved for relief. All of the loans are expected to be forgiven by the end of the year, the AP reported.

"This is going to be a smooth process for our borrowers," Cardona said in a call with reporters. "They're not going to have to be applying for it or getting bogged down by paperwork."

More information

Visit the U.S. Education Department for more on the student loan forgiveness program.