Over half 1,000,000 student loan debtors could also be entitled to have their student debt cancelled below federal legislation, however the U.S. Department of Education has not acted.
The National Student Legal Defense Network (NSLDN) obtained information via a Freedom of Information Act request indicating that the Department has recognized greater than 517,000 debtors who’re eligible to have over $8 billion in student loans cancelled below the Total and Permanent Disability (TPD) discharge program. The TPD Discharge program permits student loan debtors who’re unable to take care of substantial, gainful employment resulting from a bodily or psychological medical impairment to get their federal student loans fully forgiven.
To acquire student loan forgiveness below the TPD Discharge program, nevertheless, disabled student loan debtors should submit a proper software. The software course of could be difficult, significantly for debtors that suffer from extreme bodily or psychological impairments that intrude with their skill to deal with routine duties. The Department of Education has authority to mechanically grant a TPD Discharge to disabled student loan debtors who’re receiving Social Security Disability advantages, if they’ve a incapacity overview interval of at the very least 5 to seven years. The Social Security Administration has recognized a whole lot of hundreds of disabled student loan debtors who would qualify for reduction below this system, and the company has shared that data with the Department of Education. But the Department has not acted. Many debtors could not even notice that they qualify.
“The Department has made the TPD discharge process needlessly cumbersome for borrowers with disabilities,” mentioned Alex Elson, NSLDN Vice President. “They know who these borrowers are, they know they are entitled to relief, and there is simply no good reason why they cannot provide it now.”
In April, student loan borrower advocacy organizations submitted a proper rulemaking petition to the Department of Education to stress the Department to streamline the TPD discharge program. The organizations included a letter urging the Department to behave.
“The Department’s red tape is preventing hundreds of thousands of borrowers with disabilities from receiving the relief they are entitled to under the law,” the letter from student, shopper, and incapacity rights advocates learn.
The Biden administration has taken some steps to deal with the troubled TPD discharge program. Earlier this yr, the administration introduced that it was loosening bureaucratic necessities for the TPD discharge program by briefly waiving post-discharge monitoring durations through the COVID-19 pandemic. And final month, the Department of Education introduced the start of a prolonged negotiated rulemaking course of to overview and probably overhaul main federal student loan packages, together with the TPD discharge program, in addition to different packages resembling income-based compensation and Public Service Loan Forgiveness.
Meanwhile, the administration is conducting a authorized overview to find out whether or not Biden has authority to go additional and cancel student loan debt on a broad scale utilizing government motion. The outcomes of that overview could possibly be launched within the coming months.
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