On April 12, the Department of Education announced it will forgive an estimated $7.7 billion dollars in student loans for 387,000 people with permanent disabilities. Starting next week, the Department of Education will send letters to Americans who have been identified as eligible for what is called a “total and permanent disability” loan discharge because they have a disability and are unable to work. The Department of Education and Social Security Administration worked together to identify borrowers who have been receiving disability payments and are eligible to have their loans discharged.
By law, anyone with a severe disability is eligible to have the government discharge their federal student loans. The administration took steps four years ago to make the process easier by letting people who have a “total and permanent disability” to apply for a discharge using their social security designation, but few took advantage.
This is why the Department of Education and Social Security Administration began to identify borrowers who have a specific designation of “medical improvement not expected.” Of the 387,000 people identified, about 179,000 of those people are currently in default on their loans, putting them at risk of losing their tax refunds and having their Social Security benefits garnished.
Starting next week, borrowers identified in the match will receive a letter form the government explaining the steps needed to receive a discharge. They will not be required to submit documentation of their eligibility. Notification letters will be sent over a 16-week period.