According to a new regulation announced by the Ministry of Education on Thursday, student loan borrowers with total and permanent disabilities will now automatically release their loans, which will continue the Biden administration’s focus on targeted student debt relief.

It is expected that more than 323,000 borrowers will benefit, and the total amount of debt cancelled is approximately US$5.8 billion. Borrowers who qualify for the exemption have been identified by matching data with the Social Security Administration, and this will continue, but they will no longer be required to fill out an application form before receiving relief.

“For our borrowers, this process will be a smooth one, and they will not be bothered by paperwork,” Education Minister Miguel Cardona told reporters.

In 2019, the department ended the application requirements for borrowers who were determined to be fully and permanently disabled or eligible for TPD discharge through matching data with the Department of Veterans Affairs. However, it did not take the same measures for borrowers identified through the SSA, and only about half of the loans of borrowers deemed eligible were forgiven.

This change will take effect in September after the department matches SSA’s next quarterly data. It is expected that all emissions will occur before the end of the year.

“If the federal government already has data that can quickly track borrowers receiving benefits, [the Office of Federal Student Aid] Access to this information for automatic loan relief must be a top priority,” said Justin Dräger, president and CEO of the National Association of Student Financial Aid Administrators. “We applaud the FSA for putting this advantage into practice and making it permanent. We hope this sets a strong precedent for other groups of borrowers to do the same. “

The department also announced its intention to cancel the three-year revenue monitoring period through upcoming negotiation rules as part of the TPD emissions process. Currently, if the borrower’s income is above a certain threshold, or if they fail to respond to a request for income information during the three-year period, they may lose their dismissal. The latter is more common- 2016 Government Accountability Office Report It was found that 98% of the reinstatement was cancelled because the borrower did not submit the required information.

Persis Yu, director of the Student Loan Borrower Assistance Program at the National Consumer Law Center, said she was “encouraged” to see the department’s rulemaking process to make broader changes to TPD emissions.

“In addition to committing to cancel the three-year monitoring period during the upcoming rulemaking period, which prevents many borrowers from receiving relief under the disability discharge plan, we hope that the department can take this opportunity to expand the eligibility criteria to better comply with the law, and Find other ways to identify borrowers who missed relief due to our kafkaesque student loan system,” Yu said In the statement.

In recent months, organizations and legislators have been pushing the department to automatically grant loans to disabled borrowers. 17 organizations led by NCLC, Sent a letter Cardona was informed of this in June, and the bipartisan group of parliamentarians Urged the department earlier this month To “conveniently” advance this issue.

Cardona said the new regulations are in line with the Biden administration’s priorities for improving “our targeted loan relief program.” Since March, the department has provided approximately $8.7 billion in targeted student debt relief for nearly 500,000 borrowers.


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