The U.S. is erasing student loan debt for people with severe disabilities

The Biden administration will cancel the student loan debt of what it estimates as more than 323,000 Americans with severe disabilities, and plans to remove the complex process to qualify for this debt relief going forward.

The Department of Education announced Thursday that this move will erase more than $5.8 billion in student loan debt, as well as make its debt relief program more accessible to those unable to earn significant income due to disability.

“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 law,” U.S. Education Secretary Miguel Cardona said in a press release.

The United States already had a loan discharge program for Americans with disabilities, but until Thursday’s announcement, qualified applicants underwent a three-year income monitoring period. The Education Department temporarily halted the income monitoring period during the pandemic, and it will now move to stop it entirely so that those identified as permanently disabled by the Social Security Administration will automatically see debt relief.


Student debt isn’t just a young person’s problem

NPR reported in 2019 that just a fraction of eligible Americans were receiving the debt relief they’re entitled to under the Total and Permanent Disability Discharge program, which started in 1965. In 2016, the Government Accountability Office found that 98 percent of reinstated debt was reinstated because borrowers didn’t submit paperwork, not because they made too much. Before the Education Department’s announcement, the GAO found that tens of thousands of eligible Americans had been dropped from the program for failing to submit proof of income, and disability advocates have argued that the stringent process discourages people from applying at all.

Instead of placing the burden of applying on those with disabilities, the department will now automatically identify eligible Americans through Social Security data. If the Social Security Administration identifies someone as permanently disabled, their student debt will be automatically erased. The next such data match will occur in September.

“This is going to be a smooth process for our borrowers,” Cardona told reporters. “They’re not going to have to be applying for it or getting bogged down by paperwork.”

National Consumer Law Center staff attorney Persis Yu told NPR that the administration needs to make sure the program’s eligibility criteria is expanded as well, as some borrowers with disabilities aren’t being properly identified by the Social Security Administration.

It’s unclear whether people suffering from the long-term effects of COVID-19 will qualify for this debt relief. Long COVID symptoms include fatigue, malaise, shortness of breath, chest and stomach pain, joint and/or muscle pain, cough, and rapid heart rate that persist long after initial infection. President Biden moved to categorize long COVID as a disability under federal law so that people with lingering, debilitating effects can qualify for Social Security benefits and receive appropriate accommodations at work or school. Though some have already been awarded disability benefits, according to CNBC the majority of claimants had complications from being put on ventilators, and weren’t classified as having long COVID-related disabilities.

Canceling student debt entirely is a long way off; Cardona said Thursday that conversations regarding mass debt cancelation for all Americans are “still underway.” In the meantime, the Department of Education is working to “improve targeted loan relief” for specific groups of borrowers, like borrowers with severe disabilities. Cardona previously stated that supporting those with student loan debt “would be a priority.”

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