Education Department Eases Paperwork for Disabled Student-Loan Borrowers

The U.S. Department of Education announced on Monday it would restore student-loan forgiveness for 41,000 students who are disabled and fell behind on paperwork.

After students are determined to have a “total and permanent” disability, they must submit information to the department about their income for three years before their federal student loans can be discharged.

The loans affected by Monday’s announcement, totaling $1.3 billion, belong to borrowers who didn’t complete that income-reporting requirement during the pandemic, and so had their student-loan debts reinstated. In addition to discharging those debts, the department will waive income reporting for the remainder of the pandemic, officials said.

Some 190,000 other borrowers who have qualified for loan forgiveness under the disability requirements will also not have to report their earnings during the pandemic, the agency said.

The department is also considering ways to simplify the procedure, such as automating it, as was done for disabled military veterans in 2019, officials said. That change, however, would require a new rulemaking process and a data-sharing agreement with the Social Security Administration, a senior department official said.

Some advocates for student-loan relief, however, said the Biden administration’s announcement fell short of the borrowers’ need. The department could speed the process by waiving the rulemaking requirement, said a news release from the National Student Legal Defense Network. “Even the Trump administration automated debt relief for veterans determined to be totally and permanently disabled,” the group said.

Responding to demands from progressives, the department is proceeding with other steps to aid student-loan borrowers, including halting collections for students who have defaulted on privately held loans that are backed by the government, Politico reports.