Administration wipes out student loan debt for 350,000 borrowers with disabilities

The Biden administration has cancelled $7 billion in federal student loan debt for certain disabled borrowers through a data-sharing initiative.

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The announcement about the initiative, which allows the Social Security Administration to share data with the Education Department about borrowers who were receiving Social Security Disability benefits, came last week.

Through data sharing, the administration will be able to identify borrowers who would qualify for the Total and Permanent Disability discharge program. If a person qualifies, their student loans would be automatically discharged.

The program cancels debt for about 350,000 borrowers.

The program can wipe out federal student loan debt for borrowers who are unable “to maintain substantial, gainful employment due to a medical impairment.”

The Biden administration announced the plan last year. On Friday, the administration said that about $7 billion in student loan debt for disabled borrowers had been canceled.

Another 15,000 to 20,000 borrowers may receive TPD discharges every quarter going forward via the same data sharing program.

Previously, for a debt to be canceled, a person had to submit proof of a military service-connected disability, a signed physician’s certification form, or proof of receiving Social Security disability benefits, with a benefits review period of at least five to seven years.

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