Student Loan Forgiveness: Biden Lays Out Plan to Cancel $5.8 Billion in Student Loans
Yesterday on August 19th, the Department of Education under the Biden administration has announced a relief of over $5.8 billion to 323,000 student loan borrowers through their TPD (Total and Permanent Disability) program.
After years of mounting pressure, Biden Administration has finally made it easier for an eligible student with a total and permanent disability to access the loan forgiveness.
Even though student loan forgiveness was long due, Biden Administration fails to ensure the complete process smooth for borrowers.
Many student loan borrowers can’t work because of their physical or psychological medical impairment and despite all this, why make them go through the application process that can be a bit challenging for them.
Moreover, in many cases, borrowers with a disability had to give up on their SECURITY DISABILITY BENEFITS because of their defaulted student loans.
When announcing this initiative via a conference call, Secretary of Education Miguel Cardona claimed to provide a smooth process for the borrowers.
He was quoted saying, “This process is going to be a smooth process for our borrowers, they’re not going to have to be applying for it and getting bogged down with paperwork.”
Recommended Read: IRS Sending Refunds: Check Your Bank Account NOW
Government Strategy to Automatically Cancel Loans of Student Borrowers
- The government will not ask the borrowers to raise their hands for total and disability discharge this time. Instead, everything rests on the shoulder of the Department of Education. The department will then use the data submitted to the social security administration and identify borrowers who’re eligible under the total and permanent disability program.
- The borrower identification process will take place in September and if you’re identified as an eligible match, you’ll receive an official discharge notification after a few weeks.
- As a borrower, you even get an opportunity to opt-out of the discharge without facing income tax on the total debt relief.
Except for the VA, the government is also planning to eliminate the three-year income monitoring requirement for borrowers who received a total and permanent disability discharge through any valid process. Therefore, once eliminated, you no longer have to provide your earnings to the government.
This process of using social security data isn’t anything new.
Before the Obama administration in 2016 & the Trump administration in 2019, used the same data match approach to partial/full cancellation of loans for students and army veterans.
Moreover, advocates were urging the department of education to make the loan forgiveness program easy for those eligible to receive total and permanent disability discharge for many years.
At the moment, I can’t say how smooth this data match process will be, but one thing is sure, the department is finally listening to the voices of student loan borrowers.
Do you agree with the decision of the Biden Administration to Cancel $5.8 Billion in Loans 323,000 for student borrowers?