The Department of Education, announced Thursday, that it will Automatically Cancel about $5.8 Billion worth of Federal Student Loans, for over 323,000 Borrowers with Severe Disabilities.
The Department of Education has previously provided Student Loan Relief to Americans with a "total and permanent disability" (TPD) that Prevents them from Maintaining Gainful Employment. To obtain such a Discharge, though, Borrowers had to submit Documentation of their Condition, their Income, and were Subject to a Three-year Monitoring Period to ensure they continued to Meet Requirements. Failure to meet Income Requirements could result in a Borrower's Loans being Reinstated.
Advocates and Lawmakers alike have Criticized the Program for being Confusing and Disorganized.
A 2016 Report by the Government Accountability Office (GAO) found that 98% of Reinstated Loans were Restored because Borrowers did Not Submit the Right Paperwork, Not because their Earnings were Too High.
Starting in September, the Department of Education will Automatically Erase Student Debt, for over 323,000 Borrowers who are Identified as having a TPD in their Social Security Records, and Extend a Policy, announced in March, to No longer require those Borrowers to Report their Income.
The Federal Government is also planning to Phase-Out the Program's Three-year Monitoring Period.
Americans currently Owe about $1.7 Trillion in Debt.
Since March 2020, Borrowers have been given the Option to Defer their Payments without Accruing any Interest on Debt. That Pause was set to Expire in September, however, the Biden Administration, announced earlier this month, that the Moratorium would be Extended through January 2022.
Dan Zibel, Vice President and Chief Counsel of the Student Defense Network, called Thursday's Announcement a "life-altering" Step for the Hundreds of Thousands of Borrowers with Disabilities. "We have long been calling on the Department to take this step and eliminate unnecessary red tape that has kept too many people caught in a cycle of debt," Zibel said in a Statement. "Today's step is another indication that the Department is listening to the voices of student loan borrowers."
With this New Action, the Biden Administration has Approved the Cancellation of about $8.7 Billion worth of Debt for some 455,000 Borrowers. Biden has also asked the Department of Education and the Justice Department to look into the Use of Executive Authority to Cancel Student Loans.
NYC Wins When Everyone Can Vote! Michael H. Drucker
No comments:
Post a Comment