US Education Department Withholding Debt Discharges for Over 500,000 Student Borrowers, Organization Says

student loans

More than half a million student loan borrowers in the United States could have their student debt canceled under federal law, but the Department of Education is not undertaking any actions, the National Student Legal Defense Network (NSLDN) has pointed out.

NSLDN obtained new data through a Freedom of Information Act request which revealed that the Department has identified more than 818,000 borrowers who are eligible for a discharge under the Total and Permanent Disability (TPD) program since Social Security Administration began identifying borrowers in 2016. Whereas, since June, more than 517,000 of these borrowers who have over $8 billion student debt did not receive any discharge.

“The Department has made the TPD discharge process needlessly cumbersome for borrowers with disabilities. 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,” NSLDN Vice President Alex Elson said.

Under the TPD Discharge program, student borrowers who are not employed due to a physical or mental impairment could also have their federal student loans fully canceled. Nonetheless, in order to get their student loans forgiven, disabled student loan borrowers are required to submit a formal application.

The Education Department has the power to automatically grant a TPD discharge to disabled student loaners who have a disability review period of five to seven years and who are receiving Social Security Disability benefits.

According to the Social Security Administration, there are hundreds of thousands of disabled student loan borrowers who are eligible for relief under the program, while these data have also been shared with the Department of Education.

Student loan borrower advocacy organizations, including Student Defense, filed a petition in April this year, asking the Biden administration to provide automatic cancellation to hundreds of thousands of disabled student loan borrowers who may be uninformed that they are eligible for the relief.

“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 read.

By the end of March, the Department said that student borrowers who received discharges due to a total and permanent disability would be granted debt relief, aiming to ensure the latter that it is not necessary to have their debt reinstated if they did not manage to provide income information amid the COVID-19 pandemic.

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