$5.8 billion in charges will be erased from over 300,000 people.
Some important news from Washington: Under the Biden Administration, thousands of Americans with disabilities will be relieved of student loan debt. On Thursday, the Department of Education announced their sweeping plan to automatically eliminate $5.8 billion dollars in charges from over 300,000 people experiencing total and permanent disabilities (TPD)—a win for disability rights advocates who say current regulations have burdened those unable to maintain a steady income as a result of their condition.
According to the department, the process will begin in September to identify those eligible under the Social Security Administration (SSA) and conclude by the year's end.
"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," U.S. Secretary of Education Miguel Cardona said in a press release.
A permanent disability, Ballentine's Law Dictionary says, is a condition that "will remain with a person throughout" their entire lifetime. This includes the loss of significant bodily appendages like limbs, eyes, or an illness that prevents one from being able to work.
The new change is two-fold. As well as erasing current charges for people with impairments, the policy will also bar income earnings requests to those with TPD and suspend a three-year monitoring period. A similar move was conducted in 2019 for those eligible under the Department of Veterans Affairs (DVA). Asking for income earnings result in lenders reinstalling loan payments if borrowers do not respond to the request—this was the reason for 98% of borrowers in a 2016 report by the Government Accountability Office, the department said.
Cardona also emphasized the department's role as a "service agency," that should assist the community in bolstering access to educational success.
"This change reduces red tape with the aim of making processes as simple as possible for borrowers who need support," he said.
The change will be exempt from federal income tax, but the department recommends checking state tax codes on an individual basis should their definition of income differ.
The White House has taken steps to ease the burdens faced by Americans during the pandemic. Earlier this month, they extended the pause on student loan payments and interest through the end of January 2022 and extended the eviction moratorium for areas with substantial community spread.
What do you think of this decision? Let us know down in the comments!